The fight against DEI is hurting marketing and hurting business.

Over the past year, many highly profitable technology companies (Apple, PayPal, Google, Meta, to name a few) have laid off large numbers of people. They did this to “maximize shareholder value.” I call this the Jack Welch Strategy. This strategy resulted in him firing more than 100,000 employees to increase stock value in the short term, and in the long term creating a company whose market capitalization would go from his $450 billion to his $200 billion. Named after the former General Electric CEO.

One of the first areas hit hardest by these layoffs was these companies' DEI efforts. At the same time, ANA's latest report on diversity in the advertising and marketing industry shows that major companies' marketing organizations are becoming less diverse.

Before I get into the main topic, I would like to make one thing clear. If you want to maximize shareholder value, reducing DEI is exactly what you shouldn't do. There is a tremendous amount of research being done on diversity in the workplace. This overwhelmingly shows that companies with greater diversity and inclusion at all levels outperform those without.

Definition: Diversity is the presence of people within an organization that reflects the society in which the organization exists and operates. Inclusivity is a work environment where everyone is treated fairly and respectfully and has equal access to opportunities and resources. Equity is the fair treatment of all people, which is why norms, practices and policies in place ensure that identity does not predict opportunities or workplace outcomes.

diversity is good business

Below is a small sample of that research.

• The top 100 Fortune 500 companies have more diverse boards than the other 400 companies. (Forbes)
• Ethnically diverse businesses are 35% more likely to have higher revenues, and gender diverse businesses are 15% more likely to have higher revenues. (McKinsey)
• Companies with the most women on their top management teams have a 35% higher return on equity and a 34% higher total shareholder return than those with the least. (catalyst)

Let's dig deeper: By the numbers: diversity and inclusion is good business

Reactionary billionaires (some of whom are executives and executives at technology companies or who run technology venture capital funds) are trying to thwart DEI and any attempts by organizations to become more like DEI. It's no coincidence that DEI gets cut when we're fighting. Country's population. They have funded numerous lawsuits to block efforts to correct this country's long history of discrimination based on race, gender, and sexual orientation. Although difficult to prove, it is likely that there were ripple effects from these efforts.

Less diversity in marketing

ANA seems to recognize the relevance.

“Diversity reporting is especially necessary in the following situations:” [DEI] “Under the weight of the recent Supreme Court decision and the backlash from several dilemmas in transgender marketing, support appears to be wavering and showing signs of wilting,” CEO Bob Liodis said in the study's foreword. It is written in (no Registration required).

Last year, ethnic diversity in ANA member marketing organizations fell from 32.3% in 2022 to 30.8%, the same as in 2021, according to the report.

“Ethnic diversity in the advertising/marketing industry remains below 42.2% of the total U.S. population,” the report states. “And after making progress in 2022, the decline in 2023 is extremely disappointing. Ethnic diversity remains particularly poor for African American/Black and Hispanic/Latino populations.”

inferiority

The number of Hispanic/Latino marketers decreased dramatically from 10.9% in 2022 to 9.5% in 2023. This was true at nearly all job levels, with relatively few at senior levels ranging from 8.2% to 7.8%. However, at the entry level, it increased from 11.8% to 10.0%. “This was particularly disappointing because the Hispanic/Latino population skews younger than the general population and was expected to grow here.” Overall, this level of ethnic diversity is up from 34.2% in 2022. It decreased to 31.3% in 2023.

The Alliance for Inclusive Multicultural Marketing (AIMM), which helped write the report, said the decline could be the result of increased outreach in other regions. “Over the past several years, American companies have prioritized hiring, developing, and retaining Black employees,” the AIMM team wrote in the report. Companies have a history of viewing diversity as a zero-sum game. If you want to hire people from marginalized communities, check the necessary boxes. The person frequently appears in photographs in corporate reports. That's tokenism, not diversity.

Progress is being made at the top levels of marketing and advertising organizations. Last year, this level of ethnic diversity increased from 27.4% to 27.9%, the second highest level in the six-year survey period. One reason for this is the increased diversity among CMOs, with ethnic diversity reaching 17.3% (up from 14.6%), the highest in the report's history.

Marketing and advertising has a strong track record when it comes to gender diversity. Her 69.5% of ANA member employees and 57.7% of senior executives are women, both the highest in her six years here.

conclusion

Most trade associations are partisan cheerleaders for their respective industries. Many began promoting DEI in 2020 in response to the killing of George Floyd and the rise of the Black Lives Matter movement, but it was abolished within a few years. ANA has been producing a diversity report every year since 2018. The research and analysis is thorough. It is clear about the problem and provides a complete list of possible causes and possible corrective actions. I can only hope that others will follow suit.