Diversity, Equity and Inclusion (DEI) has been a hot topic in 2025 for good reason. At the start of the year, Trump ordered the termination of all “diversity, equity, inclusion and accessibility” (DEIA) mandates, policies, and programs within the U.S. Federal Government to “end radical and wasteful” employment practices. Since then, Walmart, Disney, Meta, McDonald’s, Pepsi, Google, Amazon and so many more U.S. based corporations have scrapped or scaled back DEI initiatives in response to the changing political landscape.
Our own federal election crept up in May 2025 with the Coalition promising to end working from home for public servants, and repealing laws surrounding the right to disconnect and casual conversion rights. Additionally, the Coalition’s inclusion of a Trump-inspired “government efficiency” portfolio focusing on cost-cutting and the potential targeting of specific DEI programs raised questions about the future of DEI in Australia.
Current Climate
Resistance within the DEI space is nothing new. In the Diversity Council Australia (DCA) ‘Inclusion@Work Index 2023-2024’ which surveyed 3,000 Australians, it was identified that:
- Workers from marginalised backgrounds reported much greater experiences of exclusion;
- Non-inclusive teams and managers are more common than ever;
- Support for D&I action is decreasing, with 7% of workers now opposing or strongly opposing D&I action (compared to 3% in 2017).
At a moment in time where DEI initiatives are on the radar, it can be helpful to recap what DEI is, what it aims to achieve, and what outcomes the research points to. 
DEI as an Organisational Framework
Diversity: Refers to the ways in which people differ from each other (e.g. age, gender, disability status, cultural background, religious affiliation, LGBTIQA+, neurodiversity etc). These unique identity elements shape the way individuals view and interact with the world, and how others view and interact with them.
Equity: Equality refers to the same resources and opportunities for all individuals regardless of their situation. Equity on the other hand, is recognising that every individual has different circumstances and that we do not all start from the same place. In order to address the imbalance, adjustments are made in the distribution of resources and opportunities to ensure equal outcomes that are fair and just. The Australian Human Rights Commission uses a great analogy to distinguish the two:
- ‘Equality’ would be giving everyone the same type of ladder to pick mangoes at the top of a tree
- ‘Equity’ is understanding that not everyone can use the same type of ladder and providing another way for them to reach the mangoes at the top of the tree.
Inclusion: refers to an integrated environment where every person is accepted, valued, respected, supported, and included regardless of their unique identity elements. It is about creating a space where information, services and opportunities are fully accessible to all individuals, enabling equal opportunity to actively participate and contribute.
The Rise of DEI
DEI has evolved from a focus on compliance (laws surrounding discrimination, harassment and equal opportunity for example) to workplace initiatives designed to extend beyond the minimum standards to embrace, promote and protect individuality. DEI initiatives might include things like targeted recruitment from marginalised groups, flexible work arrangements, acknowledgement of religious and cultural celebrations, ensuring diverse interview panels, as well as training and education around DEI and biases.
With DEI, critics are often concerned about meritocracy, reverse discrimination, declining standards, ineffectiveness and the ethical impact of political ideology forming the basis of workplace policy. Supporters on the other hand, argue that because organisations run within the context of a larger world, they cannot operate in isolation from the issues that exist in society. Organisations need to have a positive impact on all stakeholders, which not only includes employees and shareholders, but those external to the business including customers and consumers, future investors, prospective employees and community groups for sponsorship/advertising/philanthropy. While not a new concept, DEI is gaining momentum and prominence and has become more mainstream. It is likely that the debate will develop further as awareness and research grows, new insights emerge, and societal needs and expectations fluctuate and evolve over time.
Linking the Business Case for DEI
One of the most frequently cited reports in the DEI field is the research conducted by McKinsey & Company. Every three years since 2015, this consulting firm makes enquiries into the business case for diversity. Their fourth report, titled ‘Diversity Matters Even More,’ was released in December 2023 and included data from 1,265 organizations across 23 countries in six global regions.
One of the most oft cited research in the DEI space is the work done by McKinsey & Company every three years since 2015. McKinsey & Company released their fourth report in December 2023 titled ‘Diversity Matters Even More’ which drew on 1,265 organisations, 23 countries across six global regions. In summary, they found:
- A 15% greater likelihood of financial outperformance versus their peers where organisations were in the top-quartile for the representation of women on executive teams was found in the 2015 report. That figure grew to 39% in the 2023 report.
- A 35% greater likelihood of financial outperformance versus their peers where organisations were in the top-quartile for ethnic diversity representation on executive teams was found in the 2015 report. That figure also grew to 39% in the 2023 report.
- A 27% greater likelihood of financial outperformance versus their peers where there is greater gender diversity at board level.
- A 13% greater likelihood of financial outperformance versus their peers where there is greater ethnic diversity at board level.
McKinsey & Company also found that where there was greater diversity in leadership roles, there was also greater diversity overall across the organisation. Practices that enable individuals from underrepresented backgrounds to obtain top roles indicates an environment where diversity, equity, and inclusion
has been successfully embedded to make it possible for all to succeed.
In terms of where the financial outperformance comes from, the DCA ‘Inclusion@Work Index 2023-2024 demonstrates that workers within inclusive teams are:
As we know, innovation, collaboration, employee satisfaction, healthy turnover rates and psychological safety are all factors that are directly linked to higher organisational performance.
The Future of DEI in Australia
Despite increasing scrutiny and backlash of DEI in the workplace in the current climate, Australian legislation limits the possibility of scaling back DEI efforts, and in some cases, there may be legal repercussions for doing so. For example, some organisations are legally obligated to maintain policies on DEI, and report on how they achieve targets to improve gender equality in the workforce.
Criticism is not necessarily a terrible thing either. It can offer valuable insight, identify areas for improvement and lead to greater evolution of a concept or strategy as a natural step in the change process. For example, one concern raised by commentators is around the effectiveness of DEI initiatives. A 2022 study by the Australian Human Resource Institute found that while 84% of HR professionals believe that DEI is important to the future success of their organisation, only 50% reported that their leaders see DEI as a priority. Where embedding strategy across the business leads to greater effectiveness but requires the buy-in and drive from leaders, this might be an area we still need to do a bit more work.
Overall, the research is still pointing towards DEI being a competitive advantage for organisations so it’s not likely that we will see any note-worthy steps backward in this space here in Australia. In today’s rapidly changing work environment driven by stakeholder expectations and a fast-growing knowledgebase, DEI initiatives need to be reviewed regularly and adapted to be current and outcomes driven for the most meaningful impact.