UK businesses ‘must not backtrack’ on DEI despite US developments

As you may have noticed, DEI is under attack in the US and UK employers are wondering how this might affect them. Diversity, equity, and inclusion has been a core focus for UK businesses in recent years, but is that going to change with a step backwards? We’ll speak to a D&I specialist and put that question to her.

President Trump’s inauguration was on 20 January and within days of taking office he issued a series of executive orders targeting DEI initiatives. It has led to an immediate and highly visible rollback of DEI initiatives across the US federal government, with DEI offices closed, staff placed on leave, and diversity-related policies scrapped. The changes also extend into the private sector, particularly for companies working with the federal government. The second order in particular - Ending Illegal Discrimination and Restoring Merit-Based Opportunity - requires federal contractors to promise that they will not engage in DEI initiatives that breach US federal law. The impact is already being felt, with some US companies withdrawing from diversity benchmarking surveys and supplier diversity targets.

So, what does this mean for the UK? The UK’s position is very different when it comes to DEI. The Equality Act 2010 sets clear legal boundaries for diversity initiatives, and while the UK allows ‘positive action’ in some circumstances, it is very different from affirmative action seen in the US. In fact, UK government guidance has explicitly warned employers against adopting US-style affirmative action, as it could breach UK law.

One immediate question for UK businesses with US links is whether they should adjust their own DEI policies in response. There’s no legal requirement to do so, but the broader impact of Trump’s stance could be seen in changing attitudes among UK workforces. We’re already seeing trends where employees feel more emboldened to challenge workplace DEI policies, especially where they believe those policies infringe on their own rights.

Another area of concern is DEI training. Some US companies are reconsidering their DEI training programmes, particularly those focused on racial sensitivity, but in the UK, removing training could actually increase legal risk. The Equality and Human Rights Commission strongly recommends regular training as part of an employer’s duty to prevent discrimination, particularly in relation to sexual harassment. The burden of proof in discrimination claims often falls on the employer, meaning companies that fail to train their staff could find it harder to defend themselves if claims arise.

We’ve also seen Trump’s policies take a direct stance on gender identity, directing the US government to legally recognise only two sexes, ‘male and female,’ defined in biological terms. Again, this contrasts with UK law, where trans individuals are explicitly protected under the Equality Act. Any UK employer considering rolling back trans-inclusive policies based on US developments would risk falling foul of UK anti-discrimination law.

So let’s get a view on this. Kate Dodd is a D&I expert and heads up Pinsent Masons D&I consultancy Brook Graham. So, first question, what chance of this affecting UK employers? 

Kate Dodd: “It's always interesting, isn't it, because you could say, well, it's happening in the US so it doesn’t have any impact on us, but we do know that these things, particularly in such a global society now, there are always impacts around the globe when the US is leading, particularly when they are leading with such volume and such ferocity as the Trump administration are in relation to diversity and inclusion.”

Joe Glavina: “Trump’s executive order has effectively ended affirmative action mandates for federal contractors in the US. Here in the UK we have positive discrimination but that is very different isn’t it Kate?” 

Kate Dodd: “Absolutely, completely different, and it's really important that UK employers don't start to row back or to worry about their positive action initiatives because the US are actually moving much more towards the UK law. So in the UK positive discrimination is unlawful, and the only thing that is allowed is positive action. We are already at the stage, I think, that the US are trying to get to whereby the law is much more restrictive around the types of steps that you can take in positive action, and there has to be a lot more evidence-based data to take any of that positive action. So what's going to be happening, and what is happening already, is the US is actually moving much more towards the UK law. We have never been allowed to have positive affirmation in the UK because that would be considered here to be positive discrimination.”

Joe Glavina: “For UK businesses with a presence in the US or links to American clients, these differing approaches to DEI could create tensions. How can HR teams manage potential conflicts arising from these differences?”

Kate Dodd: “I think the key thing here is about having very clear information in the business as to what is happening particularly, as you say, those businesses with either US operations or who are clients or companies who are based in the US who are therefore going to be affected by this. It’s being very clear about what is required by UK law and how that differs to the US law. Things around, for example, the differences between positive action and affirmative action and also a real statement around the fact that in the UK we are seeing workers being given increasing rights and businesses, therefore, who start to row back on that will actually be very much in danger of breaking the law.”

Joe Glavina: “A recent Purpose Pulse survey highlighted a stark difference in attitudes between the UK and the US when it comes to DEI. It found that 68% of Gen Z and Millennials in the UK prioritise DEI when choosing an employer, compared to just 57% in the US. That’s significant isn’t it?”

Kate Dodd: “Absolutely. I mean, the younger generations in the UK have placed huge amounts of value on flexibility, on values. I've got clients who trace and track engagement on their websites and they will say that people entering into their job sites will go directly to look at impact on ESG, work around diversity and inclusion, etcetera. So an employer who rows away from this is really risking their future pipeline of talent and,  of course, it's not really younger generations now either. When you think about the age of people who would be considered Millennials, those are people in their early 40s. So we're not talking about people who are kind of coming into the workplace. Those who are holding really strong views about employers having value and purpose are actually the majority of workforces in the UK.”

Joe Glavina: “Finally, do you see any positives coming from this debate?”

Kate Dodd: “I think one thing that is really helpful is actually the fact that what's coming out of the US is allowing conversations to open up. I think there are people in workforces across the UK who sometimes feel that they are left behind by diversity and inclusion initiatives. They feel, well, it's not for me. We know that that young white men in particular can feel very excluded. So what I would really do is encourage UK businesses, and our clients, to open up the conversation and to allow this moment in time, to say, well, you know, we can see what's going on in the US, what do you think about that? It then allows people to ask questions, to challenge, and ultimately we know that that's far more effective than simply being told what to do. You know, asking people what their view is, engaging with them, is going to be far more effective at achieving aims around inclusion, belonging, all of those really important things for culture.”

If you would like help with any of your DEI initiatives please do contact Kate Dodd. Her details are on the screen for you.