HR Magazine speaks to Benita Chick and Fern Ngai of Encompass HK to get their take on what HR leaders need to be mindful of when navigating the ‘Trump Backlash’ on DEI.
The current political climate under the Trump administration has sparked a backlash against diversity, equity and inclusion (DEI) initiatives—programmes that promote inclusion at all levels of leadership and address systemic biases within organisations. The repercussions in the United States and APAC are brewing uncertainty among HR, DEI and business professionals about how best to navigate this landscape—seemingly rooted in quicksand. What actions should HR and business leaders take now to ensure that issues being addressed by DEI remain priorities given the new climate and compliance requirements?
Benita Chick, Founder and Fern Ngai, Advisor of Encompass HK, a Hong Kong-based organisation renowned for its innovative and impactful DEI programmes, noted, “We have witnessed the situation unfold on the frontlines of major corporations in Asia. Yet it is also clear that many now embedded and legal practices—such as minimising unconscious biases in hiring and other employee processes, improving accessibility for people with disabilities, addressing gender pay inequities and providing more inclusive customer service—have proven good for business and are therefore nearly impossible to dismantle.”
DEI will not disappear entirely; rather it must be adapted to navigate the current environment. Chick and Ngai share insights from recent developments and guidance to help leaders navigate DEI in this new climate—reviewing recent DEI developments, identifying core issues behind the backlash, examining opportunities and the outlook in Asia and then providing actionable steps for HR and business leaders.
Recent Developments Affecting DEI
Budget cuts: a defining aspect of the current backlash is the wave of budget cuts to DEI initiatives across various sectors. Budgets for DEI were reduced during COVID-19 due to fragility in the economy, and the effects were far less intense than the latest cuts in the climate of Trump’s anti-DEI stance and drastic measures implemented, retracted and pending reimplementation in the tariff war. As companies reevaluate their financial priorities, DEI programmes were adversely affected, such as high-profile DEI sponsorships and participation in external DEI benchmarks. A recent survey conducted by Resume.org indicated that while only 5% of companies entirely eliminated their DEI programmes, 8% had reduced their budgets, with many reallocating funds towards technology-driven priorities such as AI.
Restructuring of DEI: many firms are adopting a wait-and-see approach, leading to uncertainty regarding the future of DEI functions and roles. Instead of completely eradicating their DEI programmes and personnel, some companies are choosing to restructure DEI under functions such as HR or adopting less polarising language like, ‘belonging, engagement and culture’. What is important is not the label but the substance. For instance, Walmart has paused some of its DEI programmes but maintains committed to fostering a sense of belonging among its employees. This ambivalence highlights the tension between corporate strategy and the ongoing need for inclusive practices.
ERGs are not only channels for employee feedback, they also promote community, advocacy and belonging; and are among the best sources of input on diverse market needs.
Benita Chick, Founder, Encompass HK
Censorship of Employee Resource Groups: following the Trump administration’s attack on DEI, there have been NBC reports of employee resource groups (ERGs) being disbanded or censored within Asian subsidiaries of US-based companies, This mirrors reports of abrupt cancellations of ERG meetings by federal employees following the implementation of anti-DEI policies. Chick highlighted, “ERGs are not only channels for employee feedback, they also promote community, advocacy and belonging; and are among the best sources of input on diverse market needs. The removal of ERGs and reports of fear of retaliation for participating in these groups, signal a breakdown in this vital system that helps organisations enhance revenue-generating opportunities and promote overall economic growth.”
Beyond the Budget: the impact of Trump's policies extends beyond immediate budgetary concerns; they also have a chilling effect and influence broader corporate strategies globally. For example, after a Supreme Court ruling that limited affirmative action in universities, AP reported numerous prominent companies had begun retracting or eliminating their DEI commitments. This trend has been observed not only in the US but also among firms in Asia with strong ties to American corporations. The Conference Board anticipates that as US companies reassess their DEI strategies, Asian businesses may face external pressures to adapt accordingly.
These shifts away from DEI no doubt affect recruitment strategies as companies might prioritise a more traditional merit-based hiring approach, which will not only disadvantage candidates from underrepresented backgrounds but also affect a company’s capacity to reach its business goals.
Core Issues Underlying DEI Backlash
The backlash against DEI seems rooted in a failure to adequately define DEI and clarify its purposes. As a result, a misconception pervades that under DEI certain groups are given advantages that they do not deserve at the expense of those who are deserving. The goals of DEI are not to dismantle merit-based processes but rather to further enhance them.
A core purpose of DEI is to create environments where diverse backgrounds are represented and valued, fostering a culture of belonging and fairness and leveraging a broader resource of experience and perspective for creative problem-solving. As with most social frameworks, biases in merit-based systems are naturally introduced through the values, experiences and blind spots of the people who create them. Traditional merits reflect the merits of those who had the power to define and propagate them. Thus, a framework like ‘merit’ can be shaped to favour certain skills, attributes or backgrounds over others—encouraging people to behave more like those already in power. Such patterns entrench existing power structures and marginalise invaluable perspectives from others. Thus, a core aim of DEI is to identify flaws in defining criteria for merit-based hiring, evaluation and promotion.
Furthermore, DEI aims to raise awareness and address the ways unconscious biases perpetuate behaviours that undermine an environment where employees can do their best work to serve company goals and drive revenue. Ngai cited an example, “A common type of bias is affinity bias—where we inadvertently show more affinity for people in the workplace when we share a similar background, ethnicity, nationality, gender or sexuality. Such affinity can feed subtle behaviours that inadvertently signal favouritism towards some people such that others’ work-related merits are overlooked.”
Finally, traditional merit-based frameworks often assume the falsehood that achievements happen of one’s own accord, ignoring the powerful influence of socioeconomic backgrounds and societal power structures in shaping access to education, social capital and other core resources that stabilise and enable professional growth. As Michael J. Sandel described in The Tyranny of Merit, such systems over-credit individual achievement, ignore our interconnectedness, and dismiss the less fortunate who try but still do not make it as far due to circumstances beyond their control.
DEI is not a zero-sum game, but aims to lift everyone, not only those who have directly benefited from DEI
Fern Ngai, Advisor, Encompass HK
DEI programmes are therefore essential for educating hiring managers, recruiters and talent development staff under the current market dynamics to improve processes for hiring, evaluation and promotion. Doing so enhances the merit-based system that many companies are eager to reinstate. By reinstating outdated merit-based systems, companies risk downgrading their process of finding and recruiting the most qualified and skilled candidates. This trend, widely reported by AP and Reuters, is concerning given that many Asian countries are actively working to enhance workplace diversity through legislation and corporate responsibility initiatives. Ngai stressed, “It is now imperative for DEI advocates everywhere to communicate that DEI is not a zero-sum game, but aims to lift everyone, not only those who have directly benefited from DEI.”
Developments and Outlook for DEI in Asia
Legal Challenges and Compliance Issues: as Trump’s administration has pushed for stricter scrutiny of DEI practices under federal civil rights laws, Asian companies affiliated with U.S. businesses may face legal challenges regarding their DEI efforts. The American Civil Liberties Union (ACLU) predicts this could lead to a withdrawal from proactive DEI measures to avoid potential investigations or compliance issues, as seen in the US, where firms are reassessing their DEI commitments amid fears of litigation.
Local Policies Promote DEI in Asia: despite the political climate, companies are obligated to comply with local regulations that promote DEI. In Hong Kong, for example, listed companies are required by Stock Exchange rules to have at least one woman on their board of directors. Similarly, Japan has made strides in protecting against workplace bullying and harassment through legislation enacted in 2022, which also strengthened protections for individuals with disabilities by imposing minimum employment quotas. Singapore's Workplace Fairness Act, set to take effect in January 2025, further enhances protections against workplace discrimination.
This picture highlights differences between DEI in the United States versus in Hong Kong and Asia. In the United States, DEI has been politicised and has been associated with the ideals of the left wing and is a topic now turned into a culture war. This might explain why we have seen such rapid responses from big corporates, who have knee-jerked to change their stance based on the government in rule, rather than making thoughtful decisions based on their core values and the well-being of their employees, and—by extension—their entire organisation. However, in Asia, this association with politics and ‘woke’ culture is not so prevalent and decisions to promote inclusion and diversity are usually population-centred and tend to be based on striving to end systemic discrimination and improve society.
Opportunities and Silver Linings: the backlash against DEI can be seen as an opportunity for HR to reflect on the work that has been done to date in DEI and to identify where an organisation’s efforts might have gone wrong. Are affirmative action or hiring targets still necessary? Are there better solutions? What could be done to expand awareness and knowledge of DEI, its importance and its link to sustainability?
Though DEI may not be perfect, the intentions and values behind it are worth defending and are already embedded in many corporate systems. While signs of retreat from DEI initiatives persist due to political and economic pressures, forward-thinking organisations recognise the significance of these programmes in fostering a culture of belonging that leads to better business outcomes. Chick pointed out, “The resilience of companies committed to maintaining or expanding their DEI efforts underscores its evolving role as a strategic priority for sustainable growth in an increasingly complex global landscape. It is now time to reaffirm our commitment to diversity, equity and inclusion and to spread awareness about every aspect of it and how it is good for business.”
What can HR and DEI professionals do?
Chick and Ngai shared the following actions that can help HR professionals support DEI efforts in the face of the current legal and political headwinds:
Stay on top of developments
- Determine the implications of the Trump executive orders on your organisation, especially from a legal and compliance perspective. Find out where there is flexibility, but also clarify what DEI-related laws and policies your organisation must comply with, e.g. no single-gender boards for listed companies.
- Internally, stay informed of what your organisation is doing locally, regionally and globally to respond to the executive orders and DEI backlash. Understand your organisation’s position—is it backing down or doubling down— and adjust your approach accordingly.
- Act as a local and/or regional advisor to your global DEI function, providing information on what is happening on the ground here in terms of staff sentiment and industry developments.
Communicate
- Provide clarity about what DEI is and what it is not—including its value and tangible benefits to the business, specifically regarding the initiatives you are driving or have driven. Emphasise that DEI is not about benefiting those who are undeserving at the expense of those who are deserving, it should aim to lift everyone and create an inclusive environment for all.
- Share success stories and case studies demonstrating tangible benefits and positive change that DEI has brought about.
- Share research findings about the value of DEI in areas like talent attraction and engagement, such as studies on what younger talents are looking for in their employers.
Engage Stakeholders
- Engage with business leaders, employees, and peers on the value of DEI and how it fosters a workplace culture that promotes teamwork, collaboration, innovation and belonging.
- Emphasise that inclusive leadership brings out the best in people. Highlight this point for business leaders; inclusive leadership is not solely focused on DEI.
- Involve stakeholders as champions or sponsors of DEI initiatives.
Adapt DEI Strategies and Plans
- Adjust and reprioritise: in light of recent changes, you may need to adjust plans and prioritise initiatives that are considered less risky and may be classified under ESG or corporate responsibility rather than DEI.
- Assess risk: conduct a risk assessment of all your plans and collaborate with business and HR leaders to reconfigure them as necessary.
- Assess your DEI strategy with meaningful metrics: find indicators of the outcomes you seek and ways to track their changes. Without metrics, we cannot know what issues require attention, whether initiatives drive meaningful change, or if they may perpetuate unintended consequences.
Assess Implications on Your DEI Career
- Be proactive—with some DEI roles in Asia being affected, including restructuring and retrenchment, it may be a good time to take stock and update your CV and proactively seek new opportunities if you feel your job is at risk.
- List your transferable skills that will be valuable in other non-DEI roles and different industries.
Paul Arkwright
Publisher
