New DDI Report Shows Companies are Failing to Deliver on DEI Promises

PITTSBURGH, PA—April 19, 2023—DDI, a global leadership consulting firm, today released its 2023 Diversity, Equity, and Inclusion Report that shows many companies are regressing in their DEI progress, which is having a direct negative impact on talent retention, the ability to meet customer needs and their overall business success.

The report, based on DEI-specific analysis of 2023 Global Leadership Forecast results, found an 18% decrease in leaders’ endorsement of their company’s overall DEI efforts in the last two years. In addition, there’s been a 33% increase in the number of companies that do not have a DEI program in place.

“With the stress of economic uncertainty and labor challenges, companies have turned their attention away from DEI toward these urgent issues, but that has left many leaders, especially those who are women and from minority racial and ethnic backgrounds, questioning their company and role,” said Stephanie Neal, Director of DDI’s Center for Analytics and Behavioral Research. “If companies don’t act now to rekindle and reinvest in their DEI programs, the loss of talent will have a profound impact on future business success.”

The report highlights additional findings on DEI efforts and business results:

• Letting DEI slip impacts business performance. Organizations with greater leadership diversity are 2.4X more likely to outperform their competitors. Companies that rank in the top 10% among their peers in financial performance have at least 5% more leaders who are women and from minority racial/ethnic backgrounds than below-average performers, showing that even a modest increase can have significant results.
• Generational divides influence DEI perception. While leaders under age 35 are the most optimistic about their organization’s commitment to DEI, their Gen X counterparts (age 46-55) are the most disappointed. This could be an indicator of experienced leaders’ frustration with slow progress, or a feeling of being overlooked as many programs target younger workers.
• Inclusion doesn’t require an office. DDI’s data shows that 34% of women and minority leaders who work remotely feel a much stronger sense of inclusion than their in-person or hybrid-working peers. In fact, women who work in-person are significantly less likely to rate their organizations as inclusive.
• Preparing the next generation of diverse leaders remains a top concern. Burnout is soaring across all ages and demographics with over 75% of minority leaders and 72% of women leaders under age 35 feeling “used up” at the end of each day. The combination of childcare responsibilities coupled with pressure for younger leaders to portray perfection is likely driving this trend. To overcome this heightened risk of burnout, leaders should prioritize showing empathy, acknowledging their own vulnerability and shortcomings, and inquiring about employees’ wellbeing.

“A key question posed by these findings is how companies can create an inclusive remote work culture and embrace diversity in all aspects,” said DDI CEO Tacy Byham. “Gender, racial, and ethnic diversity in leadership is a clear business advantage, and you could be pushing away these highly talented leaders by taking away flexible work options. Options like remote work empowers them to do their best work for the organization while meeting personal goals and family obligations.”

In addition to revealing these urgent trends, DDI’s DEI Report provides insight into what companies can do to reduce the risk of diverse talent loss and how quality DEI programs drive bottom-line performance. The full report also details the five crucial components of DEI success to help companies implement best practices that drive engagement, inclusion, retention and performance.

For more information, download the full 2023 Diversity, Equity, and Inclusion Report at https://www.ddiworld.com/glf/diversity-equity-inclusion-report-2023.

About DDI

DDI is a global leadership consulting firm that helps organizations hire, promote and develop exceptional leaders. From first-time managers to C-suite executives, DDI is by leaders' sides, supporting them in every critical moment of leadership. Built on five decades of research and experience in the science of leadership, DDI's evidence-based assessment and development solutions enable millions of leaders around the world to succeed, propelling their organizations to new heights. For more information, visit ddiworld.com.

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