Balancing Diversity, Inclusion, and Compliance, with Alex Alonso

Mo:   

Welcome to today's episode of People and Strategy. I'm your host, Mo Fathelbab, President of International Facilitators Organization. People and Strategy is a podcast from the SHRM Executive Network, the premier network of executives in the field of human resources. week, we bring you in depth conversations with the country's top HR executives and thought leaders. For today's conversation, I'm excited to be joined by SHRM's very own Alex Alonzo, Chief Data and Analytics Officer. 

Welcome, Alex. 

Alex: 

Thank you so much, Mo. It's a pleasure to be here today and to help provide guidance to a variety of different executives in the landscape of the world of work. 

Mo: 

Well, thank you. And it is a busy time, especially in DE& I, and we have a lot to unpack. So, Alex, can you give us a brief overview of the executive orders that are impacting DE& I policies, and what are the legal requirements of the executive orders for the federal and the private sector? 

Alex: 

It's an incredible time in terms of how much change there is coming from these executive orders. One of the things that we've seen in particular is that there's a, a bevy of executive orders that have come out and some that are really impacting the world of DEI, especially as it relates both to the federal government as a workforce, but then beyond that, even into the federal contractor and subcontractor space. 

And then eventually it will impact what we're about to see when it comes to the world of work as a whole, including the private sector. One of the things that we see is in particular, the first one that, that really, most people have paid attention to is the one that's focused primarily on ending Illegal Discrimination, and Restoring Merit Based Opportunity. 

This executive order largely applies to the world of work as it relates to federal contractors and any organization or recipient of federal funding. So that means not just the federal contractors, but also the subcontractors. What this one did was really focus on revoking Executive Order 11246, which is a an executive order put forth by President Lyndon Johnson back in 1965. 

And this is the one that instituted two things. One is affirmative action and or preferential treatment for specific underrepresented or historically underrepresented groups. in the workforce. But then in addition, what it did was create the jurisdictional kind of domain of the Office for Federal Compliance or Federal Contractor Compliance programs. 

And they're the group that actually was the one that was regulating the notion of affirmative action and doing so amongst the federal contractor community. In essence, what we see now is that they are responsible for walking back that affirmative action. In other words, thinking about whether or not those programs are legal or illegal and regulating that. 

In addition, this means that employers will now not have to do an affirmative action plan. This is an area that Was part of the OFCCP's jurisdiction, and it is no longer, no affirmative action plan is required. Recently we hosted Craig Lean, the former director of OFCCP under the first Trump administration at SHRM. 

And one of the things that he highlighted is that the age of affirmative action is effectively over because OFCCP cannot regulate that any further. And with the combination of this executive order plus the cases in higher ed just two years ago, with the Harvard case and with the UNC admissions case, there is no place where affirmative action can be applied in many cases. 

The other thing that we're seeing is that there are a couple other kind of caveats to this particular order. The first of which is that it also accounts for what a provision that is certifying that your organization is not engaged in illegal DEI. And so this is something that actually speaks to a broader example of things that we'll see with a variety of other Executive Orders, but this means that in some cases, organizations will be investigated should they receive a claim or the OFCCP or the Department of Labor receive a claim that the organization is engaged in the legal DEI programs that are really based upon preferential treatment. 

Another kind of a thing that we're seeing in particular is an executive order that focuses primarily on gender ideology. And this executive order is one that's focused on defend, it's called defending women from gender ideology, extremism and restoring biological truth to the federal government. And one of the things that this speaks to is really, Focusing primarily on what the federal agencies experience and the way that they approach this, it restores the notion of biological truth, which is that there are two sexes and the gender ideology does not really nullifies it, meaning that it does not exist. 

account for gender as a spectrum in any way, shape or form. The idea being that we, the federal government will be moving to this notion of sex and there are only two sexes that happen. Those are the ones that happen at biological birth. And so we see this kind of really applying to every federal agency. 

For organizations, what this means, though, is it changes the way that we verify employment eligibility because many federal forms are the ones that are required to do that. And it also changes the way that identification, in particular is impacted. For example, the State Department will now only recognize, and the Department of Homeland Security, will now only recognize two genders, or two sexes. 

On passports. And so that is something that will have an impact on all organizations and all citizens for that matter. Um, the other thing that we're sort of seeing, and this one relates back to the original one that, that I described is really ending radical and wasteful government DEI programs and a preferencing, right? 

And, and this is targeting specifically the federal government and federal agencies and the idea of being focused heavily on only the federal government. Anti discriminatory practices and not preferential treatment or affirmative action practices. And so this is where you'll start to see that many of the federal agencies, in fact all of them, will start to engage in and as of the moment of this executive order, engage in in the reduction or elimination of what they call illegal DEI programs that are based upon preferential treatment. 

I by no means am an attorney, but this is what we're seeing, as it relates to these types of executive orders. There are future executive orders also out there that have come out recently that are based upon things like participation of transgender workers in and sports and other things like that. 

But those, the ones that we're really focusing on are these first three that I just described here. Now, it's important to note that they're only about two weeks old. So many of these will be either challenged in the courts or upheld in the courts. And there will be much debate around this in the judicial system to kind of understand specifically how these executive orders will be processed, and so there's much to come on that front. 

Mo: 

So should companies wait to see what the result of these lawsuits come out to be? 

Alex: 

I would not advise any company to wait on the results of a lawsuit specifically in many cases. And again, not an attorney here, but if there's an injunction in place, that's when you can wait. If there is not an injunction, I don't recommend waiting by any stretch and more importantly, the federal agencies cannot wait. 

And many of the federal contractors cannot wait because even if we were to look at affirmative action as a, as, as an example, affirmative action will not come back in its current form, in its prior form. There will never be a scenario where that happens. It would be a different iteration or something completely different. Different to try to find a way to do preferential treatment or, or some form like that. So some type of program, really a DEI program that mimics affirmative action. I just don't see that happening anytime soon. Frankly, I think that's never going to happen again. 

Mo: 

All right. Well, thank you for unpacking all of that. So Alex, on February 5th, a memo went out from the attorney general with the subject line ending illegal DEI and DEIA discrimination and preferences. How should leaders and HR practitioners respond? 

Alex: 

Well, thankfully we at SHRM have a new organization that's part of us. We assumed ownership of an organization in partnership with PWC known as CEO action and for inclusion and diversity. And my colleague Anuradha Hebbar, who is the CEO of CEO action, has provided wonderful guidance on this. 

And, and one of the things that she shares as a response related to this is she, she argues that organizations should really follow a. process, because there is a lot to be unpacked and, and considered when thinking about DEI programs in these executive orders, and especially as it relates to that particular memo released by Attorney General Bondi on February 5th. 

One of the things that she advocates for is that HR practitioners follow five key steps. The first is really to think about how you evaluate current DEI programs or diversity programs. She thinks that it's important for us to review the organization's inclusion initiatives to ensure they comply with federal laws, including adherence to Title VII, which is critical. 

That Title VII of the Civil Rights Act of 1964. is the seminal piece that relates to non discriminatory practices or anti discriminatory practices. In addition, there's an argument that can be made to assess initiatives to confirm that they do not give preferential treatment based upon a person's race, sex, or other protected characteristics or statuses. 

And then there's a consideration really to think about whether or not you should pivot any kind of programs towards fostering equal opportunity by focusing on access and merit, instead of identity-based kind of characteristics or traits or advantages in that regard. The other thing that she highlights is a second step that one should really focus on is using a framework to assess whether or not your current programs are in keeping with merit-based kind of opportunities. 

And, and so one thing that stands out is we at SHRM have been Developed and we've worked with a variety of partners, whether it be attorneys at, our, partner in, all things, policy and all things work, Seyfarth Shaw, or with, experts on the policy, sphere to think about how do we go about, helping organizations start the self analysis. 

And we've developed this BEAM Framework, which really stands for Belonging Enhanced by Access Through Merit, and the idea here is that any organization can begin their self analysis by focusing on five questions. Really it's about thinking about all these five questions, but it's just the starter. 

It's not comprehensive. Certainly, there will be more guidance offered by the administration, and so we'll start to see that this will be refined over time. But when thinking about these questions, ask yourselves, Participation opportunities accessible for all regardless of protected characteristics. 

Second, are your selection criteria really based upon merit and skills and proficiency or are they based upon some other criteria? In addition, we also see that we should ask ourselves whether or not any kind of programs that are available are prioritized based upon qualifications rather than some sort of protected status or some sort of protected class. 

Now, of course, there are reasonable accommodations that should be made for protected conditions like medical ones, religious ones, and practices like that. Fourth, we really advocate that organizations think about whether or not the program is available and communicated effectively so that everyone is aware and everyone feels that they have an opportunity to participate. Lastly, we ask that people really focus on whether or not their programs promote a model that is focused on skills development and that all that skills development benefits every single participant, and is eligible to every member of the workforce. Now that's the five questions within the BEAM framework.  

But what I'd also say is there are three other considerations that anybody should consider based upon Anuradha's guidance here. And that's to ensure that you're, you have compliance documentation and that you are doing your audits effectively and demonstrating that you can do your audits of your programs really according to EEOC and OFCCP guidelines as those guidelines come out, because some of them are not defined yet. Part of the executive orders is for these agencies to define what these things mean over the next 90 to 120 days. 

And then we advise that organizations build a cross functional team to think about how they really tackle these issues and ensure compliance and really consider how these audits are done. And it can be a cross functional team, not just HR, not just leadership, but also members of the legal council, members of your outside council, if you think it's necessary. 

Those are some of the things that really are important, but the idea is to ensure compliance with these federal directives without compromising inclusion, because inclusive workplaces have true value for most employees, if not all employees. And then lastly, we advise people to focus on and organizations to focus on committing to evolution and not abandonment of inclusion and diversity. 

It's too easy to say we're going to walk away from DEI, but in many cases, what organizations have been focused on and should be continue doing is evolving DEI so that we can actually demonstrate that inclusion can happen no matter what the legal requirements are. 

Mo: 

So Alex, I love that. And that takes me to want to know a little bit more. If you could take us back in history about DEI programs, how they've changed over time, and how you foresee them changing going forward. 

Alex: 

So, you know, one of the things that we saw is DEI programs for the most part were based upon preferential treatment in the early stages, right? They were focused on the notion of preferential treatment for historically underrepresented groups within the workforce. It was based upon largely the works of the civil rights movement back in the 1950s and 60s. 

And even before that, it would be a misnomer to think that we haven't really been working on it since we became a nation, if not before, but one of the things that we see is in corporate DEI programs, we've actually seen an evolution that focused on how we created an operationalized DEI to almost a period where we tried to muddle it or mix it in with ESG programs, environmental sustainability and governance programs. 

Right. And what that left was a scenario really in the, in the late nineties, going into the early 2000s, where many left themselves thinking about, is DEI in the right place? Is it cast in the right place? Is it actually operationalized with the right resources? Are the right people supporting it? 

And more importantly, is it serving the entirety of what is true diversity, right? Are there different kinds of, diversity that we're overlooking? Is Title VII and those characteristics exhaustive, right? And so that we saw the birth of in the in the mid 2000s into the 2010s, the notion of intersectionality or what I like to call stackable diversity. 

And you saw organizations really give rise to employee resource groups at that point in time, but yeah, that's it. And I think this is a fair kind of thinking about this. We saw affinity groups. We saw all kinds of programs. We saw a lot of learning and a lot of corrective learning or, or remediation. 

And in some cases, we saw a lot of focus then towards people managers and how people managers bring the culture to life within organizations that that took us towards the beginning of this decade. But one of the things that we see in particular is. Organizations have started to question since 2020 and the large investment post George Floyd and the killing of George Floyd. 

We saw many organizations actually invest heavily in their DEI programs. But when you make an investment, the question becomes, what is the return on that investment? Am I actually creating more opportunity? Am I creating better inclusion for most of my workforce? And more importantly, how am I seeing that this is impacting our communities? 

We've seen that many organizations have actually started to turn, even before the advent of the second Trump administration and many of the things that we saw, that there was a lot of focus on how we turned back, right? I started personally to get calls from people like CHROs across the, the entire ecosystem, the, the Fortune 100 asking me: What is the right way to do this? How do I evaluate the real impact of our DEI programs? And we saw that there was a, you know, a moment in time, an inflection point where the question was: Should we be doing DEI differently or inclusion and diversity differently? One of the things that people always ask me about is this past July at SHRM, we pivoted and went to inclusion and diversity. 

And a lot of that was based upon our research where we focused on the notion of how is it that Americans are seeing the impact of corporate DEI programs? More importantly, how is it that leaders and members of those organizations are seeing it? And even to a T, many people felt that. Programs, whether you were a worker, whether you were the CEO or whether you were the CHRO or an HR professional. 

Focusing on inclusion is valuable, but many actually spoke to the notion that focusing on inclusion was still muddled, had not created the opportunity, and had not achieved the success and the potential that we wanted it to achieve. 

Mo: 

Thank you, Alex. So a big question that I think HR leaders are going to have is going to have to do with the legality of deciphering DE&I. And I think what I heard you say is if it's merit based, we're good. If it in any way, you know, gets in the way of anybody being offered an opportunity, then it's illegal. Is that pretty much the summary or can you add some more color to that? 

Alex: 

You know, I'm not an attorney, Mo, so I don't want to interpret too far there. But if you were to read the executive order in particular, in any organization, the first thing I advise is please build that cross functional team and make sure your attorneys are part of it, right? That's the number one thing. 

But the second thing that I think about is when thinking about that, we need to be mindful that the, the true purpose of. Any program right now, any DEI program, is to ensure that it is available to all, that it is one that is based upon qualifications and skills, that it allows for skills development, and more importantly, when thinking about it being merit based, that it does not account for any kind of advantages and disadvantages that are based upon something other than skills and qualifications. That's the way I would think of it. 

Mo: 

I think that really cuts through a lot of those details. And certainly, yes, absolutely. Having an interpretation with a lawyer, I think is important as you said, because we are not legal experts and this is important and we want to comply. So Alex, as you look ahead, and as you see a few practical actions leaders can take today, in light of these executive orders, what else would you suggest? 

Alex: 

So naturally I would point people towards thinking about whether or not they are already auditing their, their, their own DEI programs, more. You know, most importantly, even if you are in the private sector, I think it's important to determine what it is that you're doing around a variety of areas. 

Number one, are, are you eliminating your, your efforts to stop affirmative action as a whole within your programs? Right. I think that's particularly critical. In addition, I also think that we should be mindful not to cut too deep, right? There are still programs out there that will be part of the kind of jurisdiction and, and what they do to enforce the, the, whatever the new policies and, or, or prescriptive kind of orders bring forth. 

Right. And so I would not advise cutting away pay equity, right. I would not advise cutting away pay equity audits and things like that. I would just be mindful that they are compliant with what it is that the, with Title VII and the Civil Rights Act of 1964, and those criteria. Lastly, what I would encourage people to do is, candidly, is, make sure that they are following the legal landscape. 

At no point in time has it been more valuable Practically speaking for HR professionals to be following the legal and policy landscape than it is right now. This is an area where I hate to do a shameless SHRM plug, but where I will tell you being a part of the SHRM A team, the advocacy team really is an advantage and helps you get ahead of whatever might be coming down the pike, whether it be in the courts, whether it be at the state government level, or whether it be at the federal level from the administration or congress. 

Mo: 

I was about to ask you, what other SHRM resources might our listeners tap into? 

Alex: 

So one of the things that I advise people to do is also be mindful of not just the A Team and the SHRM Advocacy Team, but I ask people to become really familiar with our Knowledge Center and the Knowledge Advisors. We have a call center where we have more than 25 seasoned HR professionals, some of whom have been directors and CHROs themselves, who can offer guidance, not legal advice, but guidance and help point you towards resources that are absolutely critical. 

And then the last thing that I would, I would say is, is really powerful is SHRM has put up a first 100 days, a tool center or resource center. And I advise that you go visit that resource center on our website, because it is a wonderful place to really. Get up to the moment updates within the minutes, if not real time, on what's happening, what's being invoked in terms of new executive orders, but also what's really affecting the world of work from a policy perspective. 

Mo: 

And that's where we'll end it for this episode of People in Strategy. A huge thanks to Alex Alonso for his valuable time in this conversation. You can follow the People and Strategy podcast wherever you get your podcasts. Also, podcast reviews have a real impact on a podcast’s visibility, so if you enjoyed today's episode, leave a review to help others find the show. 

Finally, you can find all our episodes on our website at shrm.org/podcasts. Thank you for listening and have a great day.