New research highlights dangers of abandoning DEI initiatives for employers and employees

A recent report by the Human Rights Campaign (HRC) highlights the negative ramifications of rescinding diversity, equity, and inclusion (DEI) policies within organizations. According to the 2026 State of the Workplace for LGBTQ+ Americans and Corporate Equality Index, such actions not only foster hostility among LGBTQ+ employees but also lead to enhanced productivity challenges and reduced profitability for companies.

The HRC Foundation, the educational branch of the HRC, unveiled its findings in a report published Wednesday, revealing critical insights for both employees and corporate leaders. Increased pressure from the federal government during the Trump administration, coupled with activities from right-wing activists, prompted numerous companies to retract their DEI initiatives in 2025.

The report states, “While these actions did not eliminate civil rights protections, they indicated heightened scrutiny of DEI policies, particularly at the intersection with federal funding or contracting.” This environment of uncertainty has left many employers confused about how to navigate existing civil rights laws while implementing DEI programming without attracting enforcement scrutiny. Consequently, some companies have drastically reduced their commitment to inclusion, affecting how they formulate, communicate, and document such efforts.

Survey results reveal that 39.1% of U.S. workers reported that their employers had rolled back DEI practices. In these environments, a significant 54.2% of employees experienced stigma or bias, compared to only 24.9% at companies that maintained their DEI policies. The report further indicates that 86% of employees in hostile work environments expressed a desire to leave their positions, whereas only 43.1% of those in non-hostile settings felt the same.

Among workers who were contemplating leaving their jobs, over a quarter (27.4%) reported diminished productivity. This decline was even more pronounced among LGBTQ+ workers, where 47.9% indicated lower productivity levels compared to their non-LGBTQ+ counterparts. Notably, 23.4% of LGBTQ+ employees not considering leaving still reported reduced productivity, versus only 6.2% of non-LGBTQ+ employees.

Kelley Robinson, President of the HRC, emphasized the implications of these findings in a press release: "Our research illustrates the challenges facing LGBTQ+ workers and highlights the need for clear commitments to inclusion. Discrimination against LGBTQ+ employees remains unconstitutional, and with nearly 30% of Gen Z identifying as LGBTQ+, the community's impact on the economy is significant, amounting to $1.4 trillion in buying power.”

Robinson noted that companies should prioritize transparent communication and inclusive policies, which foster trust and retention, ultimately benefiting their bottom line. In a climate marked by fear and confusion, clarity around DEI initiatives is not merely a workplace best practice, but an imperative for effective leadership.

The report also pointed out a concerning trend of decline in participation among large employers in the HRC's Corporate Equality Index (CEI). This year, there was a drastic reduction of 65% in the number of Fortune 500 companies submitting information, from 377 in 2025 to 131 in 2026, likely due to the anti-DEI climate. Nevertheless, among the participating companies that maintained their DEI policies, many demonstrated improved practices.

According to the CEI, 98% of rated employers include sexual orientation and gender identity in their non-discrimination policies, while 77% offer inclusive benefits for both same- and different-sex spouses. Furthermore, a record 91% of respondents provided at least one comprehensive health care plan option, underscoring the importance of inclusivity in employee benefits.

The report concludes that stability in the workplace is improved by sustained commitment to LGBTQ+ inclusion, with high-scoring companies in the CEI achieving net incomes eight times greater than their lower-scoring counterparts.

As articulated by RaShawn Hawkins, Senior Director of Workplace Equality at the HRC Foundation, “The data highlights a troubling reality for LGBTQ+ workers, who seek safety and reassurance in their work environments. The CEI serves as a vital resource for HR leaders to navigate these challenges and enhance workplace culture, fostering trust and retention of top talent.”

The complete State of the Workplace report and the Corporate Equality Index are available for further review.