In the month of January 2025, an executive order was signed by Donald Trump in the USA, putting an end to “illegal discrimination” and setting in motion “merit-based opportunity.”

The aforementioned version of meritocracy, however, falls short. One thing that meritocracy assumes is that of a level playing field where everyone has the same resources and chances to succeed. In reality, however, systemic biases (in hiring practices and workplace culture) are commonly disadvantageous for marginalized groups, thus going beyond the aforementioned assumption. Although not stated explicitly as a freestanding concept, the Constitution of India is where DEI indirectly lies at the very core. For example, the Transgender Persons (Protection of Rights) Act of 2019, Articles 15 and 16 of the Constitution, as well as the Equal Remuneration Act of 1976 (replaced by the Code on Wages, 2019) are a few examples of social and legal provisions that safeguard individuals in terms of diversity and inclusion (Society for Human Resource Management, 2023). Therefore, to say the very least, DEI has not been a foreign concept.

In regard to the implications for businesses, DEI brings in a lot of benefits. Multiple studies have provided scientific evidence that reflects that inclusive teams make more effective business decisions. 87 per cent of the time, it is 43 per cent more plausible for organisations with diverse and inclusive managements to make higher profits, and it is 1.7 times more plausible for firms that are diverse to be the flag bearers for innovation in their respective industries (Watts, n.d.). A report from Harvard Business Review (HBR) in particular has provided empirical evidence that reflects the benefits of cognitive diversity, such as in helping prevent groupthink (Watts, n.d.). Acquired diversity (traits someone acquires from experience) is also a crucial aspect to look at. Research has revealed that businesses that embrace 2-D diversity (which includes both demographic differences and diverse perspectives) are 45% more likely to experience market share growth and 70% more likely to break into new markets than those with less diversity (Hewlett et al., 2013). Thus, the opportunities and benefits related to DEI make it a strategic imperative for organizations worldwide.

For individuals and employees, DEI also plays a very crucial role. With DEI initiatives in place, individuals and employees feel valued and seen; they are provided with opportunities for both personal and professional growth, and they know and understand that there are measures that will safeguard them, all of which help them boost their morale and drive innovation and creativity (Boyles, 2023). Even when it comes to mental health, DEI plays a crucial role. For instance, research suggests that supportive environments and trust at the individual level have an inverse correlation with depression (The Barthwell Group, 2024). Apart from these, DEI also encourages better work-life balance for employees, encourages diverse mentorship programmes for employees, and has other such innumerable benefits.

It is important to recognize that though DEI has been gaining momentum, it still has a way to go. Despite the fact that 62 percent of employees appreciate their company’s approach to gender pay equity, 82 percent of young workers (18-24) are of the opinion that wage gaps based on gender still prevail, and 85 percent believe that there continues to be a lack of appropriate DEI policies (India Brand Equity Foundation, 2023). The same report by the Automatic Data Processing (ADP) Research Institute underscores the need for greater accountability and transparency from organizations, as though 88 percent of them conduct pay equity analyses, only a few share their findings openly (India Brand Equity Foundation, 2023). This sheds light on the fact that though DEI sounds good in theory, it also comes along with a bouquet of challenges and resistance (as the reality of its practical implementation falls terribly short).

With executives of some of the major companies in the world making a lot of blatant and derogatory remarks even to date, how can one begin to think about DEI when its very essence is dismissed? Insensitive comments reflect that companies even today don’t even acknowledge or recognize the very need for DEI because of strongly embedded prejudice, biases, and hierarchies (Changeincontent Bureau, 2024). Many firms even fall into the tokenism trap, i.e., they try to hire diverse individuals just because it becomes a checkbox that they can tick off for their CSR, which in itself is a major issue, as after such individuals are hired, the support and growth systems that the companies may have in place for them are inadequate and fall short in many ways (Changeincontent Bureau, 2024). Thus, addressing these core issues is equally, if not more, important than discussing the benefits of DEI.

While DEI initiatives hold immense potential, their effectiveness depends on the strategies that are set in place to help deal with the barriers in regard to their implementation. Research has also proposed strategies for companies, such as introspecting and revising the recruitment process (where unconscious biases may seep in), offering resource groups that support and guide under-represented individuals, supporting under-represented individuals and giving them opportunities to take up leadership roles, offering internships and training to develop a diverse talent pool, and constantly tracking and regulating demographic data in the company (Kiradoo, 2022). Companies must ensure that there is DEI accountability at all levels in the organisation; they should ensure that there are timely, tangible results that are seen; companies should tailor DEI strategies to their own needs and requirements, etc. For instance, TCS has successfully increased female representation in leadership through targeted mentorship programmes and structured career development initiatives and has implemented gender equity policies that promote fair pay and career advancement (Majumdar & Vashishth, 2024). The success of such companies serves as a model for other organisations aiming to embed DEI as a strategic priority rather than a compliance checkbox.

When it comes to the future of DEI, there is still a lot of scope to improve. The future relies on third-party audits, artificial intelligence (AI)-driven analytics, frameworks that emphasize accountability and transparency, and inclusive and engaging leadership for fostering a diverse and equitable workplace (Change in content Bureau, 2024). Addressing DEI challenges is not just a strategic advantage but also an ethical imperative. Ultimately, by making DEI a fundamental part of corporate strategy, businesses can create more equitable workplaces, drive innovation, and contribute to a more just and inclusive society.

Authors: Kairav Negi, Undergraduate Student, FLAME University &  Prof. Moitrayee Das, Faculty of Psychology, FLAME University.