As President Donald Trump aims to end diversity, equity and inclusion initiatives at the federal government level and several major companies have announced rollbacks of their DEI policies recently, experts say there is still a strong business case for employers to continue their efforts. “There was some backlash when DEI initiatives were put into place,”
As President Donald Trump aims to end diversity, equity and inclusion initiatives at the federal government level and several major companies have announced rollbacks of their DEI policies recently, experts say there is still a strong business case for employers to continue their efforts.
“There was some backlash when DEI initiatives were put into place,” said Margaret Hughes-Morgan, Ph.D., associate professor of management at Marquette University. “That (backlash) quickly went away because, at the time, it was considered the right thing to do. Over time, empirical results have proven that it is the right thing to do.”
A Reuters poll released in January 2025 showed that 44% of respondents supported Trump’s goals of closing all federal DEI offices and firing all federal employees working on DEI initiatives.
Despite some doubts from the workforce, DEI initiatives continue to drive strong business outcomes, according to Hughes-Morgan.
In her research, she’s found that DEI initiatives account for a nearly 30% decrease in turnover rate, which is one of the biggest expenses incurred by companies.
Companies that do away with their DEI initiatives could also have problems down the road finding future leaders.
“Where will future leaders come from? The people you hire today. If you do away with DEI and the leadership of the future, it could have a negative impact on stock returns,” said Hughes-Morgan.
[caption id="attachment_616530" align="alignnone" width="300"] Margaret Hughes-Morgan[/caption]
Major brands roll back DEI
Motorcycle brand Harley-Davidson, based in Milwaukee, announced last September it had revised some of its employee training and corporate partnership policies related to DEI.
The company said the revisions were due to an internal stakeholder review launched at the start of 2024.
Harley’s policies also drew the attention of online conservative activist Robby Starbuck, who launched a campaign in July 2024 aimed at “exposing” the brand.
The company argued it had not operated a “DEI function” since April of 2024 and that it did not have hiring quotas or supplier diversity spending goals.
Harley also said that in the future, all business employee resource groups will have executive management to ensure each group is solely focused on professional development, networking and mentoring.
Hughes-Morgan believes the cost of running DEI-related programming could be part of the reason for Harley-Davidson’s decision.
“Companies don’t see the capital inflows until several quarters down the road, so it gives them an excuse to not invest in these types of initiatives,” she said. “Social media is also out there saying it’s a terrible thing to do, so it gives them kind of a cover.”
Rolling back DEI policies can signal to investors that a company is closely examining how to spend its existing capital wisely, explained Hughes-Morgan.
Not having to allocate capital to DEI efforts can improve certain figures like a company’s return on assets.
The long-term impact of Harley-Davidson’s new policies remains to be seen. In May, the company said first quarter revenue was down 23% but cited economic uncertainty due to tariffs.
Another large national brand, Minneapolis-based Target, announced in January that it was ending its DEI initiatives.
The company reported a 2.8% decrease in earnings in the first quarter of 2025. A recent Fortune report also found that Target’s foot traffic has continually fallen over the past four months.
[caption id="attachment_616528" align="alignnone" width="300"] Beth Ridley[/caption]
Local companies stand firm
The Metropolitan Milwaukee Association of Commerce’s Region of Choice initiative, launched in 2019, aims to bolster the recruitment, training and advancement of Black and brown employees.
More than 130 employers in the region joined the initiative, working toward a collective five-year goal of increasing overall Black and brown employment by 15% and increasing Black and brown representation among management-level employees by 25%. Through 2021, ROC companies had 12.3% growth in Black and brown talent and 26% growth in Black and Brown management. The Region of Choice program, in its original form, ran through 2023; MMAC is currently working on its next iteration, to be announced in the coming months.
MMAC leadership said employers’ commitment to the cause is unwavering.
“Many ROC participants continue to pursue inclusive talent strategies, recognizing that diverse workplaces are essential to attracting top talent,” MMAC told BizTimes in a statement. “In light of the current climate, some companies have adapted their language or messaging to reflect their values in ways that resonate more broadly.”
These adjustments are being made for clarity and alignment and are not about companies stepping back from inclusion, according to MMAC.
The organization said its members have shared stories of “improved employee engagement, deeper pipelines and greater internal awareness” since joining the ROC initiative.
Local leadership expert and workplace culture consultant Beth Ridley said her clients are also standing firm in their beliefs on inclusion.
Most companies have concluded that they cannot build their workforce around one type of person, Ridley explained.
“Now that these employees are here, how do we keep them highly engaged and continue to have a strong pipeline of the best talent?” said Ridley. “These are fundamental, evergreen values that none of my clients are abandoning.”
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