Zarah ChoudharyWorkplace Journal speaks with Jonathan Mansfield, employment law expert at Spencer West LLP, about the evolving diversity, equity and inclusion (DEI) landscape in the UK, the impact of US corporate shifts, and how employers can navigate the legal and compliance challenges.
With major US companies rolling back DEI commitments, how might this impact their UK operations?
Many US multinationals – including Google, Amazon, and McDonald’s – have a strong presence in the UK. If they change their approach at the corporate level, it will likely influence their UK operations, particularly in shaping workplace culture.
However, these businesses must align with UK employment law, which is moving towards stronger protections against discrimination rather than stepping back from them. Any changes will have to be carefully implemented to avoid legal risks.
Given the differences in employment law, could companies risk breaching UK legal standards if they scale back DEI initiatives?
Scaling back DEI initiatives does not necessarily create legal vulnerabilities, but upcoming legislation in the UK will extend pay gap reporting beyond gender to include ethnicity and disability.
Equal pay protections will also be expanded, making it unlawful to pay individuals from different ethnic backgrounds or those with disabilities less for equivalent work.
These changes mean businesses must monitor pay disparities closely.
Unlike the US, where companies like Alphabet have softened their diversity commitments in response to political pressures, UK businesses need to focus on compliance with increasingly strict regulations.
Could removing DEI initiatives expose UK employers to legal challenges, such as claims of indirect discrimination?
While eliminating DEI policies does not directly violate employment law, it increases legal risks.
The growing emphasis on pay gap reporting and workforce data could be used as evidence in discrimination claims.
If a company’s policies lead to a workplace that disproportionately disadvantages certain groups, it could face legal action under the Equality Act 2010.
The legal landscape is shifting towards greater scrutiny, and companies that fail to track and address workplace inequalities may find themselves vulnerable to claims.
How do UK laws, such as the Equality Act, shape businesses’ approach to diversity hiring compared to the US?
UK employment law is tightening, whereas the US is seeing a shift towards questioning whether DEI policies could be discriminatory against majority groups.
In the UK, laws are being strengthened to provide greater employee protections. For example, upcoming changes will make it harder for employers to refuse flexible working requests, a factor often linked to gender discrimination.
Sexual harassment laws are also being reinforced, requiring businesses to take ‘all reasonable steps’ to prevent workplace harassment rather than simply ‘reasonable steps’.
UK businesses should focus on complying with these evolving requirements rather than being influenced by the legal debates occurring in the US.
Are UK businesses reassessing DEI due to economic pressures or political changes?
There is a global shift, particularly in the US, where major business figures, including tech leaders, are aligning with a less proactive approach to DEI. However, UK businesses still have strong incentives to maintain diversity policies.
Research from McKinsey found that companies with greater ethnic diversity performed 35% better financially, while those with stronger gender diversity saw a 15% improvement.
While economic pressures might lead some businesses to reconsider DEI investments, the UK’s legal framework and the long-term business benefits of diversity mean that most organisations are unlikely to step away entirely.
Could a decline in DEI initiatives impact the UK’s ability to attract top talent, particularly from underrepresented groups?
Yes. If DEI efforts are deprioritised, industries with historic underrepresentation, such as tech, could see progress stall.
Currently, only about 35% of the UK’s tech workforce is female, and while this figure has been improving, a reduced focus on DEI could slow further progress.
Businesses that fail to demonstrate a commitment to diversity may struggle to attract and retain top talent, particularly among younger professionals who expect inclusive workplaces.
Are there sectors in the UK more likely to maintain or strengthen their DEI commitments?
The tech sector has benefited significantly from strong DEI policies, but given its close links to the US, it may be more susceptible to changes in corporate strategy. However, many UK industries recognise the long-term advantages of diversity.
Sectors that rely on high-skilled international talent, such as finance and law, are likely to maintain diversity efforts to remain competitive in the global talent market.
Across the board, a full-scale retreat from DEI is unlikely.
The UK has long been considered more diverse than the US, particularly in how high-skilled immigrant workers integrate into the workforce. Do you think this plays a role in shaping workplace diversity policies?
Yes. The UK’s immigration system prioritises high-skilled workers, meaning immigrants often hold senior and professional roles.
In the US, immigrants are more likely to be concentrated in lower-paid jobs, creating a different dynamic.
This structural difference may contribute to the UK’s more stable approach to workplace diversity. However, political changes could always shift this landscape in the future.
For now, UK employment protections remain strong, and the government does not appear to be rolling them back.
What advice would you give to UK businesses navigating this evolving landscape?
UK businesses should focus on compliance with UK regulations rather than reacting to US developments.
With upcoming laws extending pay gap reporting and equal pay protections, companies need to ensure their policies remain aligned with new requirements.
Training for HR and management teams is crucial, particularly around harassment and flexible working regulations.
Employers should proactively assess their risk exposure and update policies as necessary.
While US companies may be scaling back DEI, UK businesses must prioritise legal compliance and workplace inclusion to stay competitive and avoid legal challenges.
