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Fashion faced a reckoning in June 2020, following the murder of George Floyd, and made promises to improve diversity, equity and inclusion (DE&I) internally. Three and a half years on, the movement has lost steam. DE&I budgets are being cut, teams are shrinking and a slew of creative director hires have been primarily white and male. Is the industry backsliding?
“There has been a regression in terms of our commitment to tackling DE&I. It’s obviously been affected by what’s happening economically, but I think that’s been used as too much of a crutch,” says Daniel Peters, founder of London-based consultancy Fashion Minority Report, which has worked with Tapestry and Farfetch. Experts point instead to a certain level of fatigue with the conversation, polarisation over what constitutes inclusive practices, and an ongoing lack of understanding around the business imperative of DE&I.
Research shows having a diverse team and an inclusive company culture is a driver of success. Companies in the top quartile when it comes to representation of women and people of ethnically diverse backgrounds are 39 per cent more likely to financially outperform than those in the bottom quartile, according to McKinsey’s latest diversity-focused report, published in early December.
A diverse team can connect with a broader consumer base. In the UK, for example, the combined disposable income of ethnic minority communities is expected to reach over £3 trillion by 2031 and £16.7 trillion by 2061, a 2022 report by British advertising agency WPP shows. “Divesting from DE&I because it’s no longer ‘trending’ is a short-sighted view because it overlooks the influential association customers make between their purchases and their principles,” says Yaseen Eldik, executive advisor for DE&I at US firm Fixer Advisory, which has worked with the CFDA, Gucci and Khaite.
Economic uncertainties: Reason or excuse?
As companies struggle with macroeconomic challenges and the cost of living crisis, budgets are being cut — DE&I included. According to recruitment firm Monster’s 2023 Work Watch Report, only 5 per cent of recruiters rated DE&I as a top priority. Some employers report that DE&I programmes are among the first to go when costs are cut, closely behind company events and bonuses. On the mass-market end, Asos scrapped its diversity bonus targets for directors so as not to “detract from our emphasis on profitability”, with diversity measures shifted to a longer-term scheme insead. A report by workforce data analyst Revelio Labs also shows that DE&I roles globally are seeing a disproportionate level of lay-offs.
“In H1, we saw positive growth and DE&I was largely on an upward trajectory, there was more optimism around it and the reality of the economic climate hadn’t hit home,” says Jamie Gill, founder of The Outsiders Perspective (which offers networking and employment opportunities in fashion for people from minority groups working in other industries), chair of the British Fashion Council’s DE&I committee and executive director of womenswear brand Roksanda. “Unfortunately, as the economic climate evolved into H2 and consumer appetite softened, we’ve seen the uptake [for DE&I] isn’t there, we haven’t gotten into the momentum of delivering it.”
Economic uncertainties often mean redundancies and higher staff turnover, increased employee dissatisfaction, lower retention levels and changing consumer needs. Is this really the best time to cut the programmes that seek to mitigate these very risks? “What does it show to people within our workplaces when DE&I is the first thing that’s been pulled back on? What does it say about our culture?” says Peters. “Your biggest cost line in any business is your people, so to not focus on optimising your workforce [is a mistake],” adds Gill.
As things pick back up, DE&I will be ever and more important. “For companies who have made redundancies, if things pick up for them and they go into recruitment drive, are they going to be going back to the same talent pools or are they going to reconsider their hiring process?” asks Peters.
Sick and tired of DE&I? Time to reframe
“Diversity and inclusion has such bad PR,” says Gill.
It is often misunderstood as a political statement, which can spark criticism. But experts say DE&I is less about politics and more about people, specifically how they show up and perform at work. Not only that, diverse teams can help brands avoid cultural insensitivity and cancellation (assuming feedback and openness are encouraged in the team structure), whether it’s around the diversity of AI models or a photoshoot that could seem insensitive against the backdrop of a global crisis.
“Employees overwhelmingly seek integrity and empathy from their leadership, which means taking an unwavering approach to DE&I and ensuring its ongoing success — regardless of political or social tides,” says Fixer Advisory’s Eldik.
There’s also growing fatigue around DE&I, largely due to the absence of action that followed the Black Lives Matter movement, which drove awareness of systemic racism. DE&I initiatives have been slow to show results, and employees may be finding that mandatory one-off DE&I training is unengaging and impersonal, their employee resource groups (ERGs) are stretched, or that their company doesn’t have robust benchmarks for progress and is all talk with no action.
Consultants and trainers report that people often don’t like to be educated on DE&I, because it can feel like they’re being told off or accused of discrimination. Strategic consultancy Maestra, which has worked with Gucci and Tiffany, has found success in prioritising storytelling over education, tying its social impact work to long-term projects, creative content and strategic initiatives. “A big part of the challenge with DE&I is that it can feel like hitting people over the head with education — that [the consultants] are going to come in and tell us what we’re doing wrong and then we can just correct them — but that’s not how the human brain works,” co-founder Stacie Gillian told Vogue Business earlier this year. “We push brands to put some skin in the game and build something,” adds co-founder De’Ara Balenger.
Eldik’s clients have found success in a creative approach, too. “Brands and companies are looking to organically fold in diverse talent and authentically demonstrate their commitment to the project of inclusion through marketing and brand engagement,” he says.
Companies that want to reap the benefits of diversity of thought and a welcoming company culture are reframing how they think of DE&I. Tapestry is among those that formalised their strategy this year. Chief inclusion and social impact officer, David Casey, who joined in April 2022, has been working to weave DE&I into every function of the business rather than having it siloed or viewed as a purpose-driver instead of a business-driver. Casey himself has specific profit and loss (P&L) responsibility as well as a budget for supporting ERGs, and also has oversight across all other areas of the organisation to assess whether the company is making equitable investments. “I don’t own the P&L for marketing, but it’s my job to work with our marketing leaders to ensure that we’re making the appropriate investments in marketing to attract a diverse customer base,” he told Vogue Business earlier this year.
A shift towards understanding the business benefits of DE&I is one that experts approve of. “The businesses who understand the benefit of an inclusive and diverse team, who have successfully implemented strategies over the last few years, will have reaped the benefits of doing it right — whether that’s a better company culture, understanding biases, understanding target consumers and your own teams with ERGs,” says Gill. “If you haven’t seen [that impact], you haven’t really understood DE&I or implemented it properly.”
For teams that feel they may have regressed, communication is the best way to get back on track. “Surveying teams is something that’s a priority for a number of organisations going into 2024, which is a starting point,” says Peters. “We’ve heard from several companies that they’re going to be speaking to their organisation broadly to understand, from a demographic perspective, who works in their business, and also how they’re feeling about diversity and inclusion.” He highlights that intersectionality is more important than ever, here, and that diversity is about more than just race.
In 2024, simply having a strategy won’t be enough. “There are a lot of organisations that have become complacent about the fact that they have a strategy, but anyone can have a strategy for the sake of it now,” says Gill. “What we’re talking about now is implementation, a contextualised approach that works for your organisation. It isn’t just a policy that sits online for you to reference and keep your workforce happy.”
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