DEI programing stalled in 2022—how that could 'alienate' young workers in the future

Emotionally stressed young woman crying while looking away sitting with friend during psychotherapy in classroom at university
Klaus Vedfelt | Digitalvision | Getty Images

As forecasts of a potential recession persist, many companies are starting to reorganize and find ways to cut costs, leaving progress toward diversity, equity, and inclusion on the back burner.

According to new research from Glassdoor, in September 2017, 27% of companies reviewed on the site indicated corporate investment into DEI programs like Employee Resource Groups. Access to DEI programs surged to 39% in 2020 before peaking to 43% in 2021. This year, however, that number has reduced to 41%.

For Aaron Terrazas, chief economist at Glassdoor, this stall isn't all that surprising.

"It's natural that after such dramatic advances in 2020, and 2021, investment took a breather this year with businesses grappling with inflation, high employee turnover and fears about the economic outlook," Terrazas tells CNBC Make It. "Business leaders have so many burning fires right now, it's normal in some way that they turned their attention from this issue after the past couple of years."

Where are DEI programs thriving?  

Despite the largely stagnant state of DEI programming, there are some areas where it is more accessible. According to Glassdoor, 60% or more of benefit reviews indicate access to Diversity Programs in the New England, Middle Atlantic, and Pacific parts of the country.

The East South Central (Alabama, Kentucky, Mississippi and Tennessee), West South Central (Arkansas, Louisiana, Oklahoma and Texas), and Mountain regions (which includes states like Nevada, New Mexico, Utah and Wyoming) generally have the lowest number of reviews indicating access.

In addition, the report shows that every major industry has seen an increase in reviews indicating diversity programs, except government and public administration. Terrazas says this is more than likely due to this industry already being a leader in diversity "historically."

"At least for the past 50 years, [working in government and public administration] has been this kind of foothold to the middle class for a lot of underrepresented groups. Certainly, the federal government has provided that access to upward mobility for a lot of Black, Hispanic and women workers. And because of that legacy, it's natural that it would be harder for them to continue to make progress and continue that momentum."

Who cares about DEI the most?

Young people have been very vocal about their desire to work for companies that care about diversity, equity, and inclusion — and Glassdoor reviews prove it. 

When employees and job seekers aged 18-34 are considering a new job, 80% say that diversity, equity, and inclusion are very or somewhat important to them. This a huge difference compared to the number of individuals aged 55-64 (67%) and 65-plus (61%).

"We know that younger generations are more interested in having a workplace that reflects their values. We've seen that repeatedly over the past couple of years," Terrazas says. "For younger workers, a job is not just a source of income, it is part of their identity. And they want their workplace to align with who they see themselves as."

Black women, and people of color collectively, are also more likely to say diversity, equity, and inclusion are important than their white counterparts. 

How does this impact businesses seeking young talent?

According to Terrazas, this DEI stall could turn younger generations away from pursuing certain companies and industries.

"It's something that can alienate younger workers, and particularly younger workers from underrepresented groups, like women and people of color," he explains. "The labor market has been tight for a long time, and perhaps it'll soften in the first part of next year. But sooner or later, that pendulum is gonna swing back. It always does."

"The real risk for businesses who don't continue to focus on this or who focus on it in an insincere or half-hearted way, is that once the pendulum of the labor market swings back, they're gonna risk losing a lot of workers who notice these things."

Check out:

Student loan payment pause extended 'one final time' by Biden administration

10 common phrases that make you sound passive-aggressive in the workplace

These are the 10 highest paying global cities for interns, according to a new report

Sign up now: Get smarter about your money and career with our weekly newsletter

Bethenny Frankel: This major 'red flag' can ruin a job interview
Bethenny Frankel: This major 'red flag' can ruin a job interview