Global cutbacks are threatening DEI momentum, but Australian HR leaders have a chance to strengthen their organisations’ commitment. By repositioning DEI as a strategic driver of innovation and trust, organisations can safeguard their future.
As some global companies scale back their investment in diversity, equity and inclusion (DEI), questions are emerging about what this could mean for workplace inclusion in Australia. Is DEI at risk of becoming a corporate afterthought? What can HR leaders and DEI advocates do to help keep this work on the agenda?
Firstly, it’s important to note that Australia’s legal framework offers more protection for DEI. Australia’s Workplace Gender Equality Act (WGEA) mandates gender equality reporting, and state and federal laws permit certain types of positive discrimination, making it unlawful in many cases to scale back DEI, says Tony Wood, Partner at Herbert Smith Freehills.
“We also have positive duty laws which require employers to take reasonable and proportionate steps to prevent workplace sexual harassment or discrimination.”
In contrast, the US lacks a federal equivalent to WGEA and has no universal ‘special measures’ exception, making DEI programs vulnerable to legal challenges.
DEI as a growth strategy
By reframing DEI efforts to focus on talent, innovation, business resilience and community trust, Australian organisations can maintain momentum even in the most challenging geopolitical climates.
“Workplaces that actively embrace DEI experience higher employee satisfaction and wellbeing, increased retention and greater productivity and performance,” says Mel Skinner MAHRI, Director of DEI at the Australian Government’s Department of Infrastructure, Transport, Regional Development, Communications and the Arts, noting gains to innovation, employee satisfaction and retention.
Another powerful argument for retaining DEI investment is its role in building and sustaining employee trust – a critical factor with far-reaching business implications.
“Once trust is lost, it’s difficult and costly to regain,” says Isabel Metz, Professor of Organisational Behaviour at Melbourne Business School. “A breakdown leads to a decline in employee discretionary effort, which in turn impacts productivity and profitability.
“If DEI is seen as a buzzword with negative connotations, you need to shift the language or perspective.” – Lou Young MAHRI, Head of Diversity, Inclusion and Volunteers for Uniting Communities South Australia
“The evidence shows that once the cycle of investment and trust is broken, reestablishing it takes significant time and resources. Investing in people drives productivity and profitability, but failing to maintain investment creates financial and reputational risks.”
This is why it’s critical to reframe DEI as a business enabler. As a first step, consider how to polish your persuasion skills.
Most of us can probably recall a time when a well-thought-out business case was rejected by the executive team or board. What was the cause of that resistance? Sometimes, it’s as simple as a CEO who prefers to feel in control. In this case, consider offering choices rather than commands. This approach disarms people’s resistance by shifting their focus from what they don’t like to which option they prefer.
Sometimes the right question can be more persuasive than a bold statement. Rather than saying, “We need to increase diversity in the C-Suite,” you could ask, “What could we gain by increasing diversity in our leadership team?” By framing your message as an invitation to explore possibilities, you invite others into the conversation rather than presenting them with a directive.
Learn how to design an effective diversity, equity and inclusion strategy with AHRI’s advanced DEI for HR leaders short course, or go back to basics with the introduction to DEI course.
Aligning with the business strategy
Lou Young MAHRI, Head of Diversity, Inclusion and Volunteers for Uniting Communities South Australia, says, if they can, HR leaders should present DEI as a strategic solution that aligns with a key business challenge that might be keeping a CEO up at night, or a strategic opportunity.
“If DEI is seen as a buzzword with negative connotations, you need to shift the language or perspective,” says Young. “Ideally, this work aligns with existing business priorities like workforce planning or capacity development.”
For example, Young says, Uniting Communities has seen higher retention rates among Aboriginal employees and employees with disabilities compared to other employees – a testament to how investing in DEI not only bolsters the service delivery benefits of representation, but also leads to better employee retention, reducing turnover costs and fostering long-term workforce stability.
“This challenges the tendency of organisations and communities to use deficit-centred language when discussing why they should engage with diverse talent, and instead demonstrates a meaningful reason why.”
“It’s also important to focus on competitiveness and merit. Frame it so DEI is about ensuring the best talent is hired and retained, and not about tokenism.”
It can also be effective to ask specific strategic questions to help leaders reflect on their decision to take DEI off the table, such as:
- What business problem are we solving by reducing our focus on DEI?
- How might this impact talent attraction and retention?
- Are we prepared for legal, reputational and cultural risks?
- How much could it cost to not embrace DEI (turnover, reputation, talent drain)?
- If DEI is no longer a priority, what does that signal about our long-term strategy?
For Australian DEI and HR leaders, this moment presents a unique opportunity to reinforce their organisations’ commitment to inclusion.
By embedding DEI into company culture, leveraging data to demonstrate impact and ensuring leadership accountability, they can transform DEI from a compliance requirement into a driver of innovation, engagement and business growth.
A longer version of this article first appeared in the April/May 2025 edition of HRM Magazine, exclusive to AHRI members.