Beyond DEI: Why Psychological Safety is Essential in Today’s Workforce

While there are numerous bold headlines, it seems every day, announcing major policy changes from Washington, judicial rulings often swiftly overturn them. An example of this was the executive order that was signed the first day in office directing federal agencies to cut all funding for equity-related programs. A second order required federal contractors to certify that they do not promote diversity, equity, and inclusion (DEI) efforts.

On February 21st, a federal judge blocked President Donald Trump's executive orders aimed at ending government support for diversity, equity, and inclusion (DEI) programs. On Friday, U.S. District Judge Adam Abelson in Baltimore issued a preliminary injunction preventing the administration from canceling or altering federal contracts related to equity initiatives. Abelson ruled that the orders likely violate the Constitution, including free speech rights.

As noted by the Associated Press last Friday, “Efforts to increase diversity have been under attack for years by those who contend the measures threaten merit-based hiring, promotion and educational opportunities for white people. However, supporters say the programs help institutions meet the needs of increasingly diverse populations while addressing the lasting impacts of systemic racism. Their purpose was to foster equitable environments in businesses and schools, especially for historically marginalized communities. Although researchers say DEI initiatives date back to the 1960s, more were launched and expanded in 2020 during increased calls for racial justice.”

Even though these recent Executive Orders were largely blocked by the courts, Diversity, Equity, and Inclusion (DEI) programs are still under heightened scrutiny. As private sector employers face pressure to discontinue long-standing initiatives, it is more important than ever for businesses to carefully evaluate their approach.

I came across this perspective, By Cindy Barth – Contributing Writer, The Business Journals, Feb 4, 2025, that I thought you may find interesting.

Barth writes, “We may be just a few weeks into 2025, but your company’s diversity, equity and inclusion initiatives already are navigating two key challenges: the continuous effort to enhance DEI practices and strategies, and a shifting perception of their importance.

Consider: In 2025, one in eight companies plan to eliminate or reduce their DEI programs due to political climate changes, economic pressures or a lack of measurable return on investment, according to a Jan. 21 report by Resume.org.

However, despite rollbacks by some, the need for inclusive workplaces remains as urgent as ever, said Wysa CEO Jo Aggarwal. That’s because as top leadership shifts focus, managers on the ground face a pressing challenge of how to foster diverse, equitable and supportive work environments in an era of uncertainty. For Aggarwal, the DEI programs currently under attack are creating a bigger issue: workers’ mental and emotional health. “I'm not as worried about DEI and the companies walking away from it as I am about our move toward a culture of saying there is only one way to be and we don't want another point of view,” Aggarwal said. “If we tell our workers that we don't want you to be any different from what we consider to be normal, that will have a repercussion on innovation, productivity and psychological safety.”

Although a growing number of American workers are expressing more negativism toward corporate diversity, equity and inclusion programs, 2024 data shows that DEI programs actually are considered highly effective for businesses.

In fact, statistics show that companies prioritizing diversity, equity and inclusion often experience increased employee engagement, higher retention rates, improved innovation and even a higher stock price — with around 64% more engagement among employees who believe their company values diversity.

Additionally, 76% of job seekers consider a company's DEI commitment when evaluating job offers, while companies with strong DEI practices see a significant increase in employee engagement and a 27% reduction in turnover.

To talk about the rapid changes underway, the potential ramifications and what companies can do to ensure their inclusive culture remains intact, Bizwomen talked with Aggarwal about the impacts workers will face if their company backs away from its DEI programs.

Please read the interview by clicking the link here.