The Rise and Retreat of DEI: Navigating the Uncertain Future of Workplace Culture

Over the course of just five years, we’ve witnessed dramatic shifts in workplace attitudes on diversity, equity, and inclusion (DEI) initiatives. In 2020, following widespread protests and public outcry for change related to the police killing of George Floyd, support for DEI initiatives surged to a seeming all-time high. At that time, corporate America, including certified public accounting (CPA) firms, publicly pledged their commitment to create more inclusive workplaces for marginalized groups.

Today, however, that commitment has seemingly taken a 180-degree turn, with some of the world’s largest companies—Amazon, Boeing, Meta, Target, and Walmart, among others—rolling back or completely abandoning their DEI programs. In Illinois, Moline-based John Deere announced that it would no longer sponsor “social or cultural awareness” events, and McDonalds, headquartered in Chicago, concluded after a civil rights audit that it would end “aspirational representation goals.”

Unsurprisingly, CPA firms are also questioning their next move on DEI initiatives and programs. Some firms have fired their DEI leaders without replacing them, some are continuing quietly, and others are re-energized and doubling down on their commitments.

So, What’s Changed?

The reality of today’s changing DEI landscape can likely be attributed to several key events taking shape in the United States over the past couple of years. In June 2023, DEI support suffered a major blow following the U.S. Supreme Court ruling that colleges can’t consider race as a factor in admissions. Though not directly targeted, some businesses faced legal challenges that claimed their diversity programs were in fact discriminatory. Other organizations preemptively backed off, perhaps in fear of what could come next.

Notably, worries surrounding DEI ratcheted up during the U.S. 2024 presidential campaign, when then-candidate Donald J. Trump made it clear he would target these initiatives and programs if elected. Soon after his inauguration in January 2025, the Trump administration terminated federal DEI programs, required only male and female gender options on federal forms, and tasked government agencies via executive order to “enforce our longstanding civil rights laws and to combat illegal private sector DEI preferences, mandates, policies, programs, and activities.” Additionally, the Trump administration’s recent action requiring federal employees to report any colleagues they believe are furthering DEI efforts in disguise under a different name has heightened fear.

“People are scared—pure and simple,” says Bonnie Buol Ruszczyk, a DEI consultant and president of the Accounting MOVE Project, which works to advance women and people of color in accounting. “What started as an effort to even the playing field and expand opportunities to those who haven’t traditionally had them has been turned into a political flashpoint, weaponized by opponents who frame DEI as a form of preferential treatment rather than its true purpose—creating equitable opportunities for all.”

Andrés Tapia, senior client partner and global diversity and inclusion strategist at Korn Ferry, anticipated this outcome: “I’ve been telling my audiences since the election to get ready for DEI—both the words and the most visible programs around it—to be decimated, and they’re being decimated.”

Flaws Enhancing the Backlash

Some of the backlash against DEI may be a result of miscalculated messaging early on, Tapia suggests. For example, many DEI efforts were built on the foundation of social justice, but corporations aren’t social justice organizations, they’re for-profit businesses. “Diversity programs should’ve been promoted as the means to an end—a more innovative workforce—not an end in itself because it’s ‘the right thing to do,’” Tapia says.

Donny C. Shimamoto, CPA.CITP, CGMA, founder and managing director of IntrapriseTechKnowlogies LLC, authored a comprehensive study on DEI in the accounting profession. Shimamoto admits that even he felt that some of the early DEI programs he encountered in his research missed the mark: “It started to not make sense, not just the business sense, but it started to not make common sense to me in the way a lot of these things were being pushed through.”

To put it frankly, initiatives that negatively focused on majority populations or alienated those in leadership positions were ripe for creating rifts.

Support, Not an Embrace

Overall, research has found that most organizations still support DEI but an outward embrace of it is faltering due to the current political and social climates.

A 2024 corporate DEI study by executive search firm Bridge Partners, which surveyed 400 C-suite and HR executives, showed widespread support of DEI, with 72% of respondents expecting to expand their DEI programs in the next 24 months. However, more than half of the C-suite executives surveyed said the political climate has had some impact on their DEI efforts. The study also showed that one in four executives aren’t on board with DEI, as they have questions about its fairness, value, and longevity.

Additionally, a 2024 study by global asset management firm Ariel Investments reports similar findings, including declines in directors’ willingness to boldly champion DEI in the boardroom, the number of directors of color appointed to boards, how often boards are focusing on race in operational and risk discussions, and the amount of corporate capital committed to diversity initiatives.

Bucking the Backlash

On the other side of the divide, there are notable organizations who are expressing unwavering support and commitment to their DEI programs. More than 98% of Costco shareholders in January 2025, for example, shot down an anti-DEI proposal, with the board stating that the programs “enhance our capacity to attract and retain employees who will help our business succeed.” Apple and Microsoft have also steadfastly defended their DEI programs.

Among the Big Four accounting firms, Ernst & Young has expressed its continued dedication to DEI practices in recruitment and hiring—at least for now. Notably, however, the Financial Times reported that PwC US dropped some of its stateside diversity goals and altered its criteria for internships and scholarships following the Supreme Court’s ruling against affirmative action and a request by conservative activist group America First Legal for the U.S. Equal Employment Opportunity Commission to investigate the firm’s race-based practices. Further, Deloitte US dropped its broader diversity and inclusion programs and asked employees working on government contracts to remove gender pronouns from their email signatures. As reported to the Financial Times, Deloitte’s change is “to align with emerging government client practices and requirements.” Yet, despite the shift in policy, Deloitte says it’ll continue some initiatives, including heritage month events, internal ethnic networks, inclusion councils, and improving hiring practices to make them fair and nondiscriminatory. Additionally, in February 2025, KPMG rolled back its DEI commitments, including ending its Accelerate 2025 program—an initiative that aimed to have half of its partners and managing directors be from underrepresented groups by this year.

The Consequences of Abandoning DEI in Accounting

Support for increasing DEI in the accounting profession, particularly among the CPA population, has long been part of stakeholder discussions. For decades, the profession has encouraged minority groups to study accounting, join public accounting firms, earn the CPA credential, and strive to move up the ladder to partnership. In fact, the AICPA has been working on diversity initiatives since the 1960s, and many state-based associations and CPA firms alike developed programs decades ago. The Illinois CPA Society (ICPAS) has long advocated for greater intentional DEI efforts in the profession, citing it as a business imperative to address the declining CPA talent pipeline. Additionally, ICPAS has advocated for expanding the discussion on DEI, noting that it’s about more than just race and gender.

Nevertheless, representation of marginalized groups in accounting remains stubbornly low, especially as it relates to racial background. For example, only 2% of CPAs in U.S. accounting firms are Black as of 2020, according to the AICPA’s “2021 Trends” report released in spring 2022.

On the corporate level, board diversity is also slowing. A 2024 Conference Board study showed that while boards of directors have become more diverse than ever, racial representation declined significantly. From 2022-2024, the share of new Russell 3000 directors who are non-white dropped from 48% to 31%. The share of new directors who are Black fell from 26% to 12%.

Shimamoto’s research has revealed similar findings. According to a 2024 study he wrote for the Center for Accounting Transformation, all ethnic categories showed considerable improvements on representation from 2010-2020. However, when looking at the same time period, diverse hires didn’t reach partner level at the same rate as their white colleagues.

“Based on the analysis, there appears to be a significant lack of equity in the CPA firm pipeline,” Shimamoto writes in the study. “We can’t keep improving our ability to draw students into the pipeline if they end up hitting glass ceilings or other roadblocks that cause them to leave CPA firms.”

Like Shimamoto, other experts warn there are consequences to the accounting profession pulling back on DEI initiatives, including:

• Fewer Recruits and Lower Retention: According to a Glassdoor survey, 76% of job seekers and employees report that a diverse workforce is an important factor when evaluating companies and job offers. Additionally, a May 2020 McKinsey & Company report found that companies who invest in DEI training see an 18% boost in employee retention rates.
  
  
• Less Innovation and Profitability: Multiple studies have shown that organizations with diverse leadership teams and boards financially outperform their peers. “If we don’t have diversity of background and experiences, we’re not going to be able to innovate because we’re not going to be able to think outside the traditional boxes,” Tapia warns.
  
  
• Lost Connections: It’s difficult and time-consuming to rebuild networks of prospects and ties to underrepresented communities if they’re neglected, says Mary Bennett, CEC, CIA, MBA, owner of MLBennett Consulting LLC, who consults with accounting firms on DEI and organizational behavior. She recalls the 2008 financial crisis when firms hunkered down, pulling back on recruitment, hiring, and talent development. “For many of those organizations, it took 10, 12, 15 years to recover.”

Where Does the Profession Go From Here?

No doubt, the complexities of navigating DEI in today’s landscape will continue to evolve. But experts say there are steps leaders in the accounting profession should consider before deciding on what their next move should be.

• Remember Your Why: Leaders need to be crystal clear on why they embarked on DEI programs in the first place and communicate it throughout the organization. It’s unlikely those reasons have changed.
  
  
• Manage Risk: “The most successful organizations—not just accounting firms—have risk management and governance practices that help them in any business strategy, and if a firm is involved in anything related to DEI, it should be aligned and structured as part of the organization’s overall business strategy,” Bennett says.
  
  
• Consult With Legal Counsel: Request legal reviews of DEI programs, especially if federal contracts are involved, Ruszczyk says. “Of course, it’s crucial to monitor any changes in the law to ensure you don’t put yourself at risk of legal action from disgruntled employees too.”
  
  
• Keep What’s Working: Ruszczyk says if firms and organizations are seeing the benefit of using a resume anonymizer to eliminate conscious bias, for example, there’s no reason to discontinue it. The same goes for a DEI committee—if it’s doing good work, keep it.
  
  
• Don’t Argue With Demographics: Regardless of race, the pool of accounting graduates is rapidly evaporating. The number of students who earned a bachelor’s degree in accounting in the 2021-2022 school year was down 7.8% from the previous year, according to the AICPA’s “2023 Trends” report. What’s more, the U.S. population is becoming more diverse, and U.S. Census Bureau estimates that white people will become the minority by 2045.
  
  
• Remember the “I” in DEI: Without creating safe workplace cultures where everyone is welcomed, recruitment and retention will continue to be a challenge for organizations. For example, in 2022, ICPAS surveyed graduates of its Mary T. Washington Wylie Internship Preparation Program, which is designed to ready minority college students for their first internships or full-time jobs in the accounting profession. Many survey respondents said they see the profession’s overall lack of DEI as a barrier, they believe they received inadequate feedback and development, and they felt their personal backgrounds and life experiences put them on unlevel ground.
  
  
• Revisit the Business Case: Understand why DEI matters to your business and diagnose what your organization does well and where it falls short. Bennett suggests looking at performance management processes as one very relevant area. Are they equitable in the way staff access information to succeed? Is anyone lost in the system? Are we playing favorites due to natural unconscious affinities?
  
  
• Take the Long View: “I think we have to wait and see what shakes out here on the legal front and practical application front,” Ruszczyk notes. “Let’s look at what DEI really means and the benefits it has for individuals and organizations as a whole rather than jumping on any bandwagon.”

Perhaps, another way forward in regard to DEI is to bring it back to the simple act of talking to one another, no matter how uncomfortable or challenging it may be.

“Both sides of the DEI argument are now doubling down on their positions, which isn’t healthy,” Shimamoto says. “It’s really creating a broader rift and no one’s coming to the table and having the discussion—and that’s what’s needed.”

Related Content:

• The Ethics of DEI: Cultivating a Positive Workplace: Committing to diversity, equity, and inclusion initiatives is more than an ethical consideration—it leads to stronger organizations and workplace cultures.
• There’s More to DEI Than Race and Gender: Expanding the accounting profession’s dialogue surrounding diversity, equity, and inclusion is a business imperative.