There's never been a worse time to reverse course on DEI

In a recent interview, Reddit co-founder Alexis Ohanian made a sharp prediction. Companies that have scaled back their diversity, equity, inclusion, and belonging (DEIB) commitments will soon reverse course. The reason, he said, is not just about optics or ideals. It is about competitiveness:

“I think you have an opportunity right now for the leaders who understand the real why,” he explained. “Which is your organization is going to be better off if you're creating the broadest funnel for talent you can, and they're actually going to do really well right now.”

Ohanian is not alone in seeing the retreat from DEIB as shortsighted. At a time when labor markets are tightening and talent pipelines are shrinking, pulling back on DEIB does not simply risk reputational damage. It directly threatens business performance. Target has experienced consistent week over week declines in store traffic since announcing their rollback of DEI initiatives in late January.

The talent crunch is real

The numbers are hard to ignore. According to Forbes, 81 percent of recruiters say that filling roles is particularly difficult right now. And the long-term picture is even more concerning. By 2030, it is estimated that over 80 million jobs could go unfilled due to talent shortages. The cost of this global shortfall is expected to reach $8.4 trillion in lost revenue.

Faced with this kind of pressure, narrowing your hiring funnel is more than a mistake. It’s a self-inflicted wound. Removing DEIB efforts from the equation means turning away qualified candidates who might not follow conventional career paths or present in familiar ways. It means ignoring people with valuable life experience that does not fit neatly on a resume.

Recruiting and retention are interconnected

These decisions do not just impact who applies. They also affect who stays. Culture is not a side note in today’s hiring market. 76% of job seekers factor company culture into their decision about where to apply. For highly skilled talent who have their pick of great companies to go to, whether or not a company values inclusion can often be a deciding factor.

If DEIB is treated as disposable, that message reaches candidates before they even submit an application.This has borne out already: in a survey of companies that rolled back DEI policies, 35% of companies reported having a more difficulty recruiting diverse talent.

It also reaches your existing workforce. The same research that shows diverse and inclusive companies attract more talent also shows that they retain it more effectively. Organizations that fail to prioritize inclusion and belonging experience higher turnover, and with each departure they lose institutional knowledge, morale, and momentum. In fact, 40% of companies that rolled back DEI reported decreased employee morale.

It also compounds the recruiting challenge as hiring teams have to simultaneously fill new roles while backfilling vacant roles. Perhaps that’s why 1 in 7 companies that have rolled back DEI have said it was a mistake, and 1 in 3 companies are reinstating their DEIB initiatives.

DEIB is not a trend. It’s a strategy.

The business case for DEIB has been established through more than a decade of data. McKinsey has found that companies in the top quartile for ethnic and gender diversity on executive teams are significantly more likely to outperform financially. That pattern holds across industries, and the correlation between inclusive leadership and profitability continues to grow.

Diverse teams do not just check boxes. They ask better questions, develop better products, and reach more customers. They also help organizations respond faster in moments of change. In an era where uncertainty is a constant, that kind of agility is not optional. It is essential.

Companies that are reconsidering their DEIB programs may see it as a return to normal. In reality, it is a retreat from progress. Inclusive hiring is not about compliance or checking a box. It is about accessing a broader range of skills, perspectives, and potential.

When companies invest in inclusion, they are not only signaling their values. They are strengthening their workforce and preparing for the challenges ahead. DEIB is not a distraction from performance. It is a driver of performance.