How and Why DEI Is Changing

IT departments, like other departments, have been impacted by diversity, equity, and inclusion (DEI) policies. According to CNBC, DEI-related job postings fell by 44% in mid-2023 and 23% year over year in November after growing 30% between 2020 and 2021, which was fueled by George Floyd’s murder by police. The author points to DEI-related cuts at Google and Meta, which included DEI staffers and impacted DEI-related programs. 

“What I hear from companies and what our research has shown is that the diversity officer job, the idea that the diversity initiative would be owned by this HR department or group or leader is falling out of favor. [T]he chief diversity officer is being demoted, the number of jobs like that is shrinking, and so it's not so as much of a corporate PR thing that like it used to be,” says Josh Bersin, industry analyst and CEO of advisory firm The Josh Bersin Company. “We have hiring targets for women in tech, African Americans, Asians, or whatever it may be, that’s all falling away. What’s replacing it is a shortage of talent, and difficulty in hiring. Almost everybody we talked to is suffering from the 3.8% unemployment rate.” 

What’s Driving the Talent Shortage 

According to Bersin’s research, what’s driving the talent shortage are people having fewer children, the economic growth in most countries, and the demand for IT skills, AI skills, and data skills. 

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“Companies are in somewhat of a desperate situation for technology skills, and they’re also spending a lot of time developing their own staff now. A ton of money has gone into developmental academies, internal mobility and talent marketplaces to try to build the skills,” says Bersin. “[HR is] bending over backwards to use AI-based sourcing, anonymize resumes [and] infer skills to create a meritocracy for hiring.” 

HR departments are using AI to understand candidates in a way that a human recruiter would not, which elevates some candidates that may not have been considered otherwise. There is also a general HR trend that focuses on skills versus roles, since it’s the mix of skills a company has that enables the company to operate more competitively, or not. 

“[Traditionally], we pigeonholed people, by their skill: you're the COBOL guy, you're the mainframe person, or the backup person, you're the Oracle person,” says Berson. “Now, there's young people entering the workforce who know all this stuff because they used a lot of these tools in high school. So, there’s much more of a full stack, professional IT career in vogue, and I think IT departments at different levels of maturity are trying to figure out how to get there from here.” 

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Last year, The Josh Bersin Company profiled the top 10 high performing consumer banks. Compared with the other banks, the top performers were using significantly more advanced technologies. When asked why they were able to attract the talent they had, it wasn’t diversity or pay. It was the ability to work on great technology projects. 

“[I]t's a chicken and egg thing. We’ve got to do great technology projects to get the people to come, which means we have to organize the IT department so we can do the projects. Other banks were sitting around with the old-fashioned IT department saying, ‘Well, you know, it'd be nice if we could do some new stuff we need to do, but we don't have anybody to work on it,” says Bersin. 

Times Have Changed, so HR Must Too 

Boomer careers developed in periodic steps: one would work in a position for maybe three years and then be promoted or would move to the next level at another company.  

“Today’s young people don’t think about their career like that. They want more flexibility, they might want to do part time gig work, they might want to work on some advanced technology for a while, then they might want to take some time off to be a yoga teacher, and then want to come back,” 
says Bersin. “The median age of a US worker is 31 or 32, so any IT leader or anybody in recruiting, who’s thinking about this has to create a work experience that's attractive to the current Google generation.” 

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In 2022, Bersin published some diversity research that showed by far, the top diversity driver was the CEO and the company defining diversity as part of their business strategy -- not their HR strategy or hiring strategy. 

“I’ve been doing this kind of work for 20 something years. I have never seen an environment where employees in general have had so much activation energy to speak up, to raise issues, to post things on social media to ask for things that they never would have asked for before, to form a labor union with the Biden administration support. Employees are, in some sense, calling the shots at this point, and if you don’t understand that, as a leader or a hiring manager or an executive, you’re probably missing out on a labor pool that's going to somebody else,” says Bersin. “Diversity and inclusion is just one piece of understanding what makes your employees lives better, and therefore, how they're going to bring more energy to your company. So, I think there's just as big shift that's happened with young workers, now. If we have a massive recession, I suppose this will change, but I don't see that on the horizon.”