We are experiencing a deliberate, and often quiet, roll back of diversity, equity and inclusion (DEI) initiatives within UK businesses which will have long-term damaging effects for the tech sector and wider economy. The implications of these roll backs are, put simply, a reversal in progress and a reinforcement of deep systemic inequality.
With pressure to reduce costs and stay afloat in challenging economic times many businesses cite the cost of DEI initiatives and policies as being prohibitive to doing business. This is short sighted. A 2020 study by McKinsey which gathered data from 1,000 organisations revealed that gender-diverse businesses are 25% more likely to have higher profits, with that number increasing to 36% for ethnically and culturally diverse businesses.
The risk of turning away
So, what are the actual implications of the roll back in DEI initiatives? If you are experiencing a change in DEI activities within your organisation it’s useful to consider whether this is because DEI is being de-prioritised or whether the organisation is re-framing what DEI means within the context of its organisational strategy. If efforts are being de-prioritised then potential implications include:
1. A shift in workplace culture
When DEI is no longer a priority the risk is that some employees become more vulnerable to discrimination, micro-aggressions and systemic disadvantages. They may lack the structures and mechanisms to ensure their voices and perspectives are heard, in the worst-case scenario they may be actively silenced.
Practically, you might see this in meetings where the same people contribute regularly, and the same people struggle to contribute their ideas and perspectives. Over time you may notice your teams becoming more homogenous. There is an active disadvantage in having a team where all members come from a similar background, have a similar thinking style, are of the same gender, race or education background. You create an echo-chamber which inhibits creativity and innovation. This can erode the deep cultural fabric of an organisation.
2. Loss of Innovation and Competitiveness
A BCG study suggests that increasing the diversity of leadership teams leads to more and better innovation and improved financial performance. In today’s economic climate, coupled with the opportunities and risks artificial intelligence (AI) brings to the way we do business, businesses need to stand out and continue to truly innovate to remain competitive. This requires resilience and a commitment to building and nurturing loyal talent within organisations.
3. Damage to Employer Brand and Talent Retention
As Gen Z, and eventually Gen Alpha, enter the workforce businesses will need to consider the expectations of a younger workforce. Gen Z is the first generation to grow up in a fully digital world with ready access to a wealth of information to shape their perspectives. Emerging research shows that their expectations are to find employment which is financially secure, supports overall well-being, and aligns to their values. For many individuals who represent Gen Z within the workforce DEI is not optional, it is a necessity. To remain relevant businesses need to consider how they will meet the expectations of the younger generations and their future leaders.
4. Widening Societal Gaps
Businesses influence our society, employers can promote and sustain upward mobility, economic empowerment and equitable opportunities. Stalling or stopping DEI initiatives will entrench existing inequalities particularly with regards to race, gender, disability, sexuality, and socioeconomic background. This is harmful to our societal values and norms and will have a ripple effect to our social services and societal structure.
Protecting the progress so far
Whilst it’s key to maintain and protect progress which has been made in business as a result of successful and thoughtful DEI initiatives it might be time for a reframe. Creativity, innovation and diverse perspectives are key to a business being resilient and adaptable in today’s world. Responsible businesses will not only prioritise DEI they will also consider their approach to the climate emergency and their ethical values in the way they do business. As a result there’s an opportunity for businesses who want to remain relevant to reshape how DEI initiatives are funded and delivered.
Here’s what can be done:
1. Integrate DEI into the overall strategy
DEI should not sit within one department, rather it should be embedded across all functions of the organisations from recruitment, marketing, leadership and service and/or product design. In this way DEI approaches should influence the day-to-day practices within an organisation, shaping culture and behaviour without requiring high investment.
2. Transparent leadership
If it matters, it should be measured. Leadership teams and company boards should be measuring their progress on inclusion alongside their bottom line. The numbers will start to speak for themselves. Leaders who prioritise transparent and open communication, including public reporting on workforce diversity and the gender pay gap are more likely to develop loyalty both internally and with their clients.
3. Build a network of strong allies
Organisational behaviours and practices that lack inclusivity are often inherently discriminatory and can contribute to a toxic and unproductive workplace culture. Build alliances and find allies. It’s extremely challenging for one individual to speak out however building a constructive case as a group could contribute to significant change and impact within your organisation. DEI initiatives are inherently hard because they challenge the status quo, therefore it makes sense to co-create solutions and share the load.
What might the future hold?
In uncertain times it’s easy to lose heart and lose sight of the bigger picture. The seismic shift we saw in 2020 of businesses pivoting resources and focus to support DEI came at a significant moment during the peak of the COVID-19 pandemic alongside the Black Lives Matter movement. Five years on we can see that the journey for successful DEI initiatives is not linear, it’s often experimental, fraught with tension (at least at the start) and take time to mature.
A key enabling factor is the current approach of the UK Government. The Mission Led Government framework deeply embeds diversity, equity and inclusion by calling for a fairer and more equal society. The cross cutting nature of DEI across the five national mission areas identified in the framework signals that DEI is foundational to societal progress. Businesses should take a lead from this.
This is not the moment to roll back from DEI, doing so is short-sighted and damaging to long-term business resilience, innovation and ethical responsibility. Now is a moment to galvanise progress to date and evolve how we understand DEI and how we deliver it. This is a critical moment, a crossroad for businesses tempted to retreat from previous DEI commitments. Whilst the economic pressures are real the answer is not drawing back from an approach which ultimately impacts the bottom line. The research is clear, organisations that prioritise diversity are more creative, more adaptable, and more profitable. Beyond the numbers, inclusive companies foster greater loyalty, collaboration, and innovation all essential qualities in an uncertain economy and a fast-evolving tech sector.
DEI is an essential component of a business strategy, now is the time for organisations to embed it deeply and strategically. The focus should shift from performative gestures to meaningful, measurable, and systemic change. This means aligning DEI with business goals, integrating inclusive practices across functions, and embedding accountability at every level of leadership.
There is also an opportunity to reframe DEI within a broader commitment to ethical and sustainable business practices. Gen Z and Gen Alpha are entering the workforce with high expectations for fairness, transparency, and impact. If businesses wish to attract and retain top talent, they must be able to practically demonstrate how they are building inclusive cultures and equitable opportunities.
Whilst UK business is inevitably influenced by governments and policies overseas there is a risk that our very values, the values which make UK businesses unique and attractive to investors and employees, are being slowly eroded. To stand out and take a stand is to hold true to the positive values which take time and focus to cultivate. Ditching a focus on DEI is a disappointing outcome, but all is not lost. The real opportunity lies in reaffirming our commitment to fairness, innovation, and integrity—even when it’s difficult. UK businesses can lead not by following reactive trends, but by setting a clear, values-driven example of what responsible, future-ready leadership truly looks like.
In closing, it’s always important to remember the words of Robert Reich, former U.S Secretary of Labour: “Change threatens those who benefit most from the status quo.”