Global DEI: Think Globally, Act Locally

Top (L-R): Lisa Salas, GE Vernova; Fred Melkey, Emerson; Melanie Hache, Oracle. Bottom (L-R): Gregory Hoff, HRPA; Wenchao Dong and Alan Wild, HR Policy Global.

HRPA Global held a webinar bringing together representatives from transnational companies to discuss how to balance approaches to DEI both in the US and globally.

Why it matters: The United States’ 180-degree shift on corporate DEI has placed US companies in a delicate position. Companies must determine how to implement their DEI-related programs on a global scale and how to assuage employee anxiety about change in the workplace.

By the numbers: Among the approximately 70 webinar participants, 56% indicated their company is rolling back DEI to some extent in their US facilities but only 21% planned to roll back DEI initiatives in facilities outside the US.

Evidencing their global viewpoint, the vast majority of webinar participants indicated that the US headquarters leadership was fully, or to some extent, on the same page with international branch leadership on how to approach DEI. Only 2% indicated that significant differences exist between countries.

DEI divergence on global scale: As the US is backing away from DEI-related mandates, other countries continue to pursue gender pay transparency, quotas for disability and older worker hiring, and diversity requirements for Boards.

• Yes, but: Cultural expectations and definitions of diversity have always differed from country to country. Panelists noted that even as the US situation changes, the effect on operations outside the US may be minimal since they are already operating differently based on their legal context.

Operating in a gray zone: Panelists discussed managing the feeling of being caught between a rock and a hard place—contending with legal and cultural expectations outside the US while trying to discern the limits imposed by US policy.

• While the Trump administration’s executive order 14173 on ending unlawful DEI does not change existing law, the lack of guidance on what could be considered unlawful DEI forces companies to operate in a deliberately murky environment. The forthcoming report, due in May, listing the “worst offenders” on DEI may provide the first clues as to how the administration plans to define unlawful practices, if published.

• Meanwhile employees outside the US are expressing anxiety about what repercussions could flow from the US’s “America first” approach. Global companies are reassuring employees that they are committed to following the rules and regulations of countries where they operate and that their inclusive operating cultures will not change as they comply worldwide.

Takeaways for CHROs:

• Refine your approach to DEI to ensure that it is an integral part of your business, rather than a siloed operation. Many regions outside the US have taken this approach resulting in these concepts becoming part of the fabric of business success.

• Review your company’s DEI management approach – does headquarters set policy for all facilities and regions or is your approach more localized? If the former, evaluate whether a less HQ-driven approach makes sense in certain situations.

• Consider whether scaling back DEI in the US could affect global investment, resources and funding for DEI overseas. Many of the global legal requirements, for example, pay transparency and Board membership, are the tip of the iceberg and cannot be achieved without first investing in talent acquisition, performance reviews, total rewards, and building an underlying culture.