Retail giants like Target, McDonald’s, Walmart, and Amazon are all rolling back their inclusion policies. European companies are feeling the pressure too, but how should they react? Did a plane crash last week (as Trump insinuated) due to absurd diversity policies, or are we actually heading towards a crash without them?
Is inclusion outdated?
It has become a staple in President Trump’s discourse: DE&I (Diversity, Equity, and Inclusion) is not only the cause of moral and economic decline, but if we are to believe the president, it might even be one of the reasons why a military helicopter and a passenger plane collided last week, killing 67 people. The narrative is also quickly gaining traction among major retailers, particularly because anti-woke influencers on social media are calling for boycotts of companies from Harley-Davidson to Lowe’s.
In recent months, McDonald’s, Amazon, and Walmart, among others, have already wound down their DEI programs, and Target followed suit a few weeks ago. Amazon called its programs for specific minority groups “outdated,” McDonald’s no longer sets diversity targets, and Walmart has promised to phase out the terms “diversity, equity, and inclusion” from corporate documents.
Walmart and Target, in particular, have been shifting with the wind, as just in 2020, the retail giants embraced the Black Lives Matter movement in response to riots that also targeted their stores. Instead of reacting with outrage, they introduced not only DE&I initiatives but also support funds and community programs to address racial inequality. However, the social climate has changed. Last year, Target, for the first time, refrained from launching a “Pride Month” product line or marketing.
Frans Muller: “Why DE&I Matters”
Whenever it rains in America, it drizzles in Europe. Especially for large multinationals operating on both continents, the dilemma is significant. It remains to be seen what intercontinental companies like Ahold Delhaize, Aldi, Lidl, H&M, and Inditex will do, as the European Union, on the other hand, is encouraging them to take on more social and environmental responsibility.
Ahold Delhaize makes its stance clear on its corporate website with the headline: “Why DE&I Matters.” “We know that diversity drives innovation and fosters business growth. Diversity is fundamental to every part of our Leading Together strategy. It helps our brands better serve customers, support communities, and create a great workplace for employees,” the company states.
“As our customer base becomes more diverse, we believe that having a diverse workforce enhances customer satisfaction,” argues Costco. “A diverse team helps bring originality and creativity to our offerings. It also provides insight into the tastes and preferences of our members. We believe (and member feedback confirms) that many of our members like to see themselves reflected in the people they interact with. We believe this fosters creativity and innovation in the products and services we offer.”
Out of economic necessity
The customer base is indeed becoming more diverse. We are in the midst of a global demographic transition that is reshaping the world’s population, as previously outlined in The Future of Shopping books. The labor market is also becoming increasingly diverse – and increasingly older.
Due to aging, the future lies in the hands of a shrinking workforce. Only a small majority of Europeans (59%) are currently of working age, and there is barely a new generation ready to take over. The workforce has been shrinking for a decade and is expected to decline by 18% by 2070. This makes attracting and retaining scarce talent an ever-greater challenge for employers.
In this “war for talent,” embracing diversity becomes essential: as the active workforce shrinks, everyone must be able to participate. Promoting diversity in the workplace is not about “wokeness” or political correctness, but a necessity for securing a sufficiently skilled workforce.
Unquestionable or non-negotiable?
The number of older employees will increase, yet most employers still lack a strategy to address this shift. The same applies to activating population groups that are currently underrepresented in the workforce, whether they are low-skilled workers, non-native speakers, or people with disabilities. In 2019, even within Europe, 12% fewer women were economically active compared to men. Meanwhile, the younger workforce is becoming increasingly international: more than half of all graduates now live in emerging markets.
If companies want to ensure they have enough skilled employees, they will have to accommodate a much more diverse labor pool, for which decades-old, “one-size-fits-all” HR practices are inadequate. In a diverse society, a diverse and inclusive workplace is an economic advantage: the variety of perspectives that a wide range of backgrounds, physical characteristics, life experiences, and personalities bring fuels creativity.
