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Thursday 30 January 2025 6:00 am  |  Updated:  Tuesday 28 January 2025 2:17 pm

The Debate: Should businesses have DEI quotas?

By: City PM Comment Desk

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Trump’s America is turning the tide on woke, but are DEI quotas good for business? Two experts hash it out in this week’s Debate

Yes: Targets work, but they speak only to the converted

Diversity in business isn’t a ‘nice to have’: it’s a necessity. Diverse teams consistently outperform in terms of problem solving, creativity and decision making, all of which are key ingredients to growth. 

The emphasis on DEI ‘equity’ – equal opportunities for all – has driven positive change over the last few years, but the rate of change is not fast enough. A recent McKinsey report shows it will take 22 years for white women to reach parity in senior leadership roles; that figure rises to a staggering 48 years for women of colour. 

In fact, the data tells us that minority groups miss out on every rung of the career ladder, from entry level to senior leadership positions. In a world where rationalisation and AI mean fewer roles are available, minority groups are likely to find themselves losing out even more unless we take a radical new approach.

Targets work – those around women on boards for the FTSE 350 resulted in an 18 per cent increase over a 10-year period – but they speak only to the converted. Adopting quotas cuts through the debate: these are not for discussion, they are mandatory. They force the issue to the top of the agenda, and cut through systemic barriers within businesses around retention, career development and promotion.

I wish we weren’t still talking about this in 2025, but we are. Those that understand the business sense underlying diverse businesses have already made the change; now it’s time to force the naysayers to the table.

Victoria Symons is partner and head of corporate at Cripps

Read more

UK manufacturers facing ‘steel quota cliff edge’

The steel industry has been particularly badly hit by rising energy costs

No: When companies have better systems in place, they simply don’t need quotas

The world of work is littered with inequalities. Racism, sexism, ageism, ableism – the conscious and subconscious presence of these biases keeps the playing field uneven. As a blunt instrument, DEI quotas can help redress the balance. But it’s an inelegant solution that prevents us from fixing the fundamental issues that create inequality. Quotas also invite hackneyed arguments from diversity sceptics looking to roll back the clock on equality. By this I mean the tiresome “you only got that job because you’re [insert characteristic]” brigade. As an Asian woman in a CEO role, I’m sick of this reductive approach to my achievements, and how it can so easily be reached for as a result.  

As such, we should avoid giving the ignorant few this open goal and instead focus on eliminating the biases that prevent diversity from flourishing in the first place. If we can take conscious and subconscious bias out of recruitment and promotions (because, trust me, however woke you think you are, bias is rife in all of us), the numbers show that diversity follows. Research by Applied shows that a ‘de-biased’ recruitment process organically increases ethnic minority hires by up to 300 per cent and sees up to 70 per cent more women hired into senior roles. When companies have better systems in place, they simply don’t need quotas. 

This is what true DEI is all about: creating equal opportunities for all to succeed. Rather than let DEI be reduced to box ticking or written-off as ‘favouritism’, let’s strive to lose the quota crutch. De-biased systems and truly fair processes are what’s needed to empower diverse talent to shine fair and square.

Khyati Sundaram is CEO of ethical AI hiring experts Applied

The Verdict: Bias cannot easily be HR-programmed away

Donald Trump has made it crystal clear he has no time for diversity, equity and inclusion (DEI) policies, let alone quotas, and, duly, many businesses have been quick to signal their support. Not least, Meta, which has halted all its DEI initiatives. As demonstrated by today’s debaters though, the topic is more than just a culture war issue, with important questions raised over the intrinsic effectiveness of DEI programmes, even for progressives.

Symons makes a convincing case for the pros of DEI quotas, especially the proven business benefits of having a more diverse team – something that should surely pricks even the ears of the self-proclaimed ‘unwoke’. Symons’ highlighting of the scale of the issue – in particular the slow and persisting gap for women of colour reaching the top – is also duly done. 

However, as Khyati points out, even for women of colour, these quotas can become reductive, shining a light on employees’ race or gender over their achievements, with quotas ultimately masking a more fundamental problem – bias – which cannot easily be HR-programmed away. 

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