Opinion: Musk To Ackman, Why Are Companies Opposing 'Inclusive' Hiring?

On November 1, US aircraft manufacturer Boeing made the controversial decision to dismantle its DEI (Diversity, Equity, and Inclusion) department. The company's former Vice President of Global DEI, Sara Bowen, announced her resignation on the social media platform LinkedIn.

Boeing has faced significant criticism for its quality and safety practices following two incidents in January this year. In the first, the door plug of a Boeing 737 Max blew off mid-flight, leaving a large hole in the side of an Alaska Airlines plane. In the same month, another Boeing aircraft had its nose wheel fall off just before a Delta flight took off.

Since then, the company has been explicitly targeted on social media by billionaire Elon Musk and other traditional critics, who suggest that some of Boeing's quality issues stem from its decision to include diversity targets in its 2022 bonus plan. After facing these criticisms, Boeing revised its incentive plan to focus more on quality and safety earlier this year.

The whole concept of DEI — which encompasses women, people of colour, and those in the LGBTQ+ community — has come under attack in the US. Detractors argue openly that DEI employees lack the qualifications, skills, or intelligence to contribute to society through jobs, education, or leadership.

One must also consider whether the anti-DEI sentiment has had any impact in India.

Resentment In US

Following the Alaska Airlines incident, Elon Musk posted on X: "Do you want to fly in an airplane where they prioritised DEI hiring over your safety? That is actually happening." He added later: "People will die due to DEI."

Reports indicate that investigations into the incidents pointed to other factors, including a lack of quality control, outdated technology, and financial irregularities. However, these findings did not satisfy DEI critics, who celebrated Boeing's November 1 announcement of dismantling its DEI department.

Although the step may seem exaggerated, there is a growing anti-DEI movement in the US. Another American billionaire, Bill Ackman, wrote on X that DEI policies were "inherently racist" and "illegal", despite claims that they work "on behalf of the oppressed". Musk endorsed these views, even as his company Tesla reportedly removed all outreach programmes for minority communities from its annual filing.

This pushback against DEI programmes has led companies like Toyota, Ford, and others to re-evaluate or even close down their DEI departments. Experts attribute this backlash to social tension, largely coming from ‘white Americans' who feel disadvantaged in the job market.

The Indian Scenario

In India, DEI was an alien concept until multinational companies (MNCs) introduced it, mostly due to mandates from their foreign parent companies. Since then, the IT and services sectors have implemented formal DEI policies.

In India, DEI initiatives tend to focus on the inclusion of women, queer people, and, to some extent, those with physical disabilities. Given that the policy is largely US-inspired, are Indian companies facing similar challenges?

DEI expert Saundarya Rajesh, founder-president of the Avtar Group, states: “It is unfortunate that some global organisations are choosing to dismantle DEI. However, this is not a phenomenon that has severe local implications in India Inc.”

“Corporate India continues to recognise that inclusion is an integral part of organisational culture and a non-negotiable employee experience that needs to be delivered.” Indian subsidiaries of MNCs and some prominent Indian conglomerates have set diversity hiring as a goal. This is often driven by investor pressure or requirements from global partners, and the easiest way to meet these demands is by reserving roles for women in HR, ESG, finance, digital, communications, and other areas, as talent in these functions is readily available in the local job market.

However, roles in infrastructure and other front-facing sectors rarely see diversity hiring, as companies do not specifically reserve positions for women in these areas. Though diversity in such roles is often selected on merit, some companies aim to prioritise diversity in hiring, which can inadvertently exclude male candidates. This leads to discontent among those who feel overlooked.

“Positive discrimination must always ensure that merit is never compromised. If we can uphold this principle, much of the political hijacking associated with DEI can be addressed. You may still select a DEI nominee, but only if they are on par with the rest. Not one bit less,” says Prabir Jha, founder & CEO of Prabir Jha People Advisory.

Loss of Talent?

DEI policies were originally designed to foster inclusivity by ensuring diverse representation in workplaces. However, their implementation has raised concerns about compromising meritocracy, as seen in the US. This has led to the loss of potential talent and opportunity costs.

"Focusing on DEI does not necessitate a compromise on meritocracy. What it requires is an inclusive and equitable strategy, where decisions around hiring and advancement are diversity-sensitive, delivering on the vision of equal opportunities for all,” says Saundarya Rajesh.

In the West, DEI is meant to give a voice to the voiceless. It is also intended to ensure that the views of the most junior employee are heard in meetings.

In India, however, diversity is often viewed narrowly through the lens of ‘female hiring', which means there is a significant opportunity to broaden the focus to policies that promote a truly inclusive workplace. Experts suggest that certain areas remain sacrosanct, where positive discrimination should have no place. Merit should always be the sole criterion for selection, as the impact of an incorrect decision, whether by omission or commission, could have far-reaching consequences.

“Never give away board positions, management roles, promotions, and hire ‘only diversity candidates'. This does more harm to the cause than good. Inclusion must always feel inclusive. If you remain true to the principles of meritocracy, you will eliminate any bias against diversity,” says Jha.

Americans have displayed their resistance to this form of affirmative action, as evidenced by the rejection of Kamala Harris, a Black and South Asian woman, who critics labelled a "DEI hire". Let's hope that India's approach to DEI avoids the pitfalls of unconscious bias.

(The author is Contributing Editor, NDTV)

Disclaimer: These are the personal opinions of the author