Illustration by Ngadi Smart

Following the U.S. Supreme Court ruling striking down race-conscious admissions in higher education, some corporate leaders may be concerned that beyond reducing the already low diversity of their hiring pipelines, the ruling might cause their diversity, equity, and inclusion (DEI) initiatives and programs to face additional scrutiny and legal challenge.

While reducing liability is a responsible move, leaders should take care to ensure their efforts to protect against legal risk don’t turn into a fear-driven abandonment of effective DEI practices. The key to sustaining DEI progress and commitment through this volatile time lies in acting intentionally: curtailing your usage of racial data that is the most legally risky, while taking decisive action to continue using racial data to eliminate discrimination, remove bias, and create fairer workplaces.

Curtail Legal Risk

To understand how to best act on this complex topic, it’s important to start with the legal foundations. According to Title VII of the Civil Rights Act, it’s illegal to consider any single candidate’s or employee’s race — even with the intention of creating a more diverse, equitable, or inclusive workforce — in any employment decision. Employers can’t create de facto hiring quotas (e.g., “50% of the employees hired in this department must be women”), or “reserve seats” for employees from certain groups, even in the interest of diversity.

According to the law, even after the recent Supreme Court ruling, gender-conscious or race-conscious hiring practices are permitted, but only as part of limited, temporary, and highly structured voluntary affirmative action programs, undertaken only if employers find evidence of company-wide or industry-wide hiring discrimination, only to correct the initial imbalance, and only without “undue harm” on members of non-targeted groups (meaning that employers cannot lay off white workers to hire workers of color).

So long as these guidelines are followed, neither employers nor DEI practitioners need to panic. Removing the word “diversity,” vowing to strip all mentions of race at work, or shutting down race-related affinity groups are harmful overreactions that don’t reflect real legal risks. As it stands, the vast majority of workplace DEI programs are strongly supported by legal precedent and are unlikely to be affected by this Supreme Court ruling.

When done right, DEI programs can reduce the risk of employment discrimination and hostile work environment claims and can mitigate risk across your organization. However, employers can nevertheless reduce their risk by auditing their existing programs to ensure they don’t run afoul of existing laws. Policies that instruct hiring managers to use the race of individuals as a “tiebreaker” or “plus points” for individual candidates are impermissible under the law. Setting aside concrete numbers or percentages of roles or seats for members of specific social groups is similarly risky. Avoid practices like hard rules forbidding employees not of a particular race from joining employee resource groups or instructing recruiters to fill a position with someone meeting specific demographic criteria (e.g., “you must fill this role with a woman of color.”) Essentially, if a policy, process, or practice requires knowing the racial characteristics of an individual to make a decision affecting their employment, you may want to review it.

Collect Racial Data to Identify Disparities

Some leaders may read the preceding paragraph and assume that an easy way to reduce risk is to simply not collect any racial data at all. However, making this conclusion would be throwing the baby out with the bathwater, and could put your company’s DEI progress at risk.

While using the racial data of individuals to influence a hiring decision would be illegal, aggregating racial data for the overall candidate pool to identify overall race-related disparities is well within reasonable grounds. Collecting demographic data in conjunction with an employee engagement survey might reveal racial gaps in meeting participation deserving a closer look. Collecting demographic data in conjunction with HR data might reveal racial gaps in turnover deserving intervention. In other words, collecting demographic data, including race, can reveal adverse impact caused by existing practices, prior discriminatory practices, or historical limitations on the labor pool, all criteria specifically listed by the Equal Employment Opportunity Commission’s Voluntary Affirmative Action Guidelines.

Not only is this data-driven approach compliant with current guidelines for employers, but it is also highly effective in ensuring DEI initiatives deliver measurable impact. Socially conscious investors, employees, and customers want employers to go beyond public statements of commitment, to take specific actions that remedy real inequities in organizations, industries, and society. Collecting racial data to gain information about inequalities in your organization, your industry, or even society is one of the highest-value DEI-related actions you can take as a leader, and ensures that when you act, you will be working purposefully with a clear goal in mind.

Use Racial Data to Remove Universal Barriers

A common misunderstanding of DEI initiatives is the assumption that, if a racial disparity is identified, DEI initiatives rectify the disparity by giving marginalized groups preferential treatment — so-called “reverse discrimination.” For example, some managers might assume that if an analysis reveals racial hiring discrimination, DEI initiatives would seek to “give jobs to marginalized people” at the expense of white employees in return.

Not only would such a crude and zero-sum approach be blatantly illegal; it’s also far from the reality of DEI work. Most effective DEI programs use racial data to identify discriminatory barriers that are compromising fairness and meritocracy in the workplace, and to develop initiatives that remove those barriers for everyone.

For example, if an analysis using racial data uncovers disproportionate barriers for Black, Asian, Latine, and Indigenous manager candidates due to the lack of a standard promotions process and high barriers to entry for candidates, a DEI initiative might follow up by working with all leaders to develop a standardized promotions process, train leaders on how to use it and how to interrupt biases, and automatically consider all employees for promotion after three years in a position. These initiatives would have the added benefit of reducing manager favoritism, nepotism, and other unethical practices that might negatively impact workers from any background. Most DEI initiatives follow this pattern: They collect data on marginalized groups to design workplaces that work better for everyone.

Use Racial Data to Correct Discrimination

When employers seek out pay equity audits, they learn whether employees of different backgrounds are being paid fairly for equal work. If the answer is no, then responsible employers may proactively offer back pay to the affected employees to rectify the inequality. The extra pay isn’t “taken” from the non-affected employees like in a zero-sum game; it’s given from the employer to make things right: expanding the pie, rather than fighting over it.

Similarly, if an employer uses racial data to identify that white managers are receiving disproportionately more opportunities to take on challenging projects, network, and receive mentorship from senior leaders, in addition to removing universal barriers to opportunity, they might proactively create more opportunities to offer challenging projects, networking, and mentorship to members of marginalized groups.

One of the surprising benefits of using data in this way is that it can help your workforce understand the rationale behind your DEI initiatives. Because most people assume that workplaces are inherently fair or are meritocracies until proven otherwise, DEI initiatives (e.g., starting an employee resource group with event programming mostly directed at Latine employees) might be met with apathy or backlash from those anxious about preferential treatment. By grounding DEI work in data (e.g., with an analysis showing a relative lack of community, support, and belonging for Latine employees compared to White employees) you can help your workforce understand the importance of DEI programs and take pride in your commitment to supporting your workforce.

Use Racial Data to Design Fair Processes

You cannot use individuals’ racial information to give them a 30% score bump compared to other candidates. You cannot allocate 30% of positions to members of marginalized racial groups, outside of a highly-bounded voluntary affirmative action program following the guidelines discussed above.

However, you may stipulate that each stage of your hiring process be composed of at least 30% qualified candidates of color before proceeding (a practice known as the Mansfield Rule, or the Inclusion Rider). While these practices typically aim to correct for industry-wide discrimination or limited labor pools, no one candidate has higher or lower odds of being hired than the next candidate. The employer simply takes additional time to intentionally expand the candidate pool before proceeding.

Processes like these can be combined with other bias-disrupting practices to further ensure fairness. For example, you can make it clear that any voluntarily shared racial data will not be associated with an individual’s candidacy. You may even require that individuals handling racial data for candidate pool diversity work separately from those who will make employment decisions.

Use Racial Data to Demonstrate DEI Progress

Some leaders may invest in DEI initiatives and programs out of the applaudable initial justification that they are “obviously” needed to support the workforce. However, when these initiatives run their course, those leaders can feel unsure what to do next. When times are good, these DEI initiatives are seen as a marker of a successful, people-centered workplace. But when organizations are under financial pressure, face business challenges, and must juggle competing priorities, the lack of a solid justification for DEI can consign it to the top of the list for budget cuts. Organizations that are neither able to demonstrate an evidence-based reason for DEI programs’ existence, nor an evidence-based assessment for DEI programs’ effectiveness will never be able to decouple their DEI efforts from short-lived trends and fads.

As for organizations that can initiate DEI programs using data showing racial disparities or unmet needs, racial data can be the single most powerful tool in justifying their continued existence. If your network analysis or belonging surveyquantifies a racial gap in access to decision-making processes, you might use these findings as rationale to design new decision-making processes, create advisory boards to inform leaders, and lean on employee resource groups to share information to employees of color about their input is being sought out.

By once again running those same analyses and comparing the data you receive, you’ll be able to make powerful inferences regarding the success — or failure — of your initiatives and draw on these findings to further improve your DEI programs.

Principles to Remember

Don’t:

• Panic, abandon your DEI efforts, or compromise effective initiatives out of unfounded fear.
• Make employment decisions about or resources for individuals dependent on knowing their race or ethnicity, without a prior analysis showing disparity, and without first talking to legal counsel.
• Allocate or reserve a percentage of desirable resources (e.g., promotions, positions, assignments) to members of racial group, without a prior analysis showing disparity and without first talking to legal counsel.
• Use people’s racial data to give them a boost or a demerit in any decision, without a prior analysis showing disparity, and without first talking to legal counsel.
• Express racial preferences, criteria, or restriction for any role or position, without a prior analysis showing disparity, and without first talking to legal counsel.

Do:

• Use racial data to inform recruitment efforts and diversify candidate pools (e.g., by using the Mansfield Rule).
• Aggregate racial data to preserve anonymity without losing group-level insight.
• Draw upon racial data to identify racial inequalities and disparities in your organization.
• Cite racial data to design DEI efforts and initiatives that remove barriers and correct for discrimination.
• Reference longitudinal racial data to show DEI progress, communicate about the efficacy of DEI programs, and celebrate your wins.
• Partner with attorneys and legal experts early on to design and communicate about legal — and effective — DEI programs.

DEI work isn’t going anywhere, and leaders know it: 85%, according to a recent survey, view social issues as “urgent” concerns. Employees and consumers continue to expect organizations to not just make commitments to do better, but achieve measurable outcomes that can prove that their talk isn’t empty. Doing so will require that evidence-based DEI work — that requires collecting and using racial data legally and effectively, alongside other demographic data — becomes the new standard of this work. Done right, you’ll be able to simultaneously shore up your legal risks and accelerate your organization’s transition to the higher standard of transparency, accountability, and effectiveness your constituents expect from their DEI programs.

This is simply the next evolution of DEI in a longer fight for greater diversity, equity, and inclusion at work grounded in the Civil Rights Act of 1964, with decades of widespread support. How your organization meets the needs of this moment will decide how well you adapt to the next stage in your DEI journey.