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Why ignoring DEI is a legal, leadership, and talent crisis
Diversity isn’t optional: the era of treating diversity, equity, and inclusion (DEI) as a “nice to have” is over, writes Friska Wirya.
Friska Wirya
In today’s workplace, DEI isn’t just about fairness – it’s a business necessity with legal, cultural, and talent implications that no organisation can afford to ignore. The question is no longer about if you address DEI, but how you do it effectively and meaningfully.
Yet, the reality is grim: DEI efforts in many organisations are floundering. Pushback is growing, resentment is brewing, and the result is legal risks, toxic cultures, and an exodus of top talent. For businesses, this isn’t just an HR issue – it’s an existential threat.
The legal costs of DEI failure
Ignoring DEI opens the door to lawsuits, industrial action, and reputational damage. Discrimination, harassment, and exclusion aren’t just cultural problems – they’re legal liabilities. In Australia, high-profile cases have exposed the cost of failing to address these issues, with organisations facing hefty settlements and enduring public scrutiny.
Rio Tinto’s recent report on workplace bullying, sexism, and racism highlighted how unresolved cultural issues can escalate into systemic crises. The legal risks multiply when businesses fail to act on these warning signs. Employees subjected to toxic cultures increasingly turn to the courts for justice, while regulators and advocacy groups demand accountability.
Beyond lawsuits, failure to address DEI can trigger industrial action. Employee activism is on the rise, with workers demanding accountability on pay gaps, representation, and inclusive workplace policies. The message is clear: businesses that don’t take DEI seriously will pay the price – in courtrooms AND on balance sheets.
The backlash isn’t a DEI problem – it’s a leadership crisis
Recent backlash against DEI initiatives, including from both men and women, reflects a deeper leadership failure. Leaders often lack the courage or clarity to address resistance, allowing resentment to fester. For men, DEI is sometimes framed as exclusionary, creating fears of being sidelined. Women, meanwhile, fear being seen as “diversity hires”, undermining their achievements.
This backlash is a symptom of poor communication and weak leadership. When organisations fail to articulate the why of DEI – why it benefits everyone and how it drives better outcomes – they fuel division. Instead of fostering inclusion, they create silos of resentment.
Leaders must step up. DEI isn’t about ticking boxes; it’s about creating a culture where everyone thrives. And that includes tackling tough conversations head-on, explaining how diversity improves decision making, innovation, and business performance. Leadership is about showing, not telling – and when leaders fail to model inclusive behaviours, they sabotage their own DEI efforts.
Why most businesses are still failing at DEI
The truth is most organisations are still talking the talk but not walking the talk. They roll out unconscious bias training, issue glossy diversity statements, and celebrate International Women’s Day – then go back to business as usual.
What’s missing is tangible action. Here’s how organisations can start delivering on DEI promises today:
- Set measurable goals: Vague commitments to “inclusion” mean nothing without metrics. Define what success looks like – whether it’s closing pay gaps, increasing representation in leadership, or improving retention rates – and track progress relentlessly.
- Hold leaders accountable: DEI isn’t HR’s job; it’s a leadership mandate. Tie DEI metrics to performance reviews and compensation. “Leaders” who don’t walk the talk shouldn’t be leading – they should be shown the door.
- Tackle resistance head-on: Create safe spaces for employees to express concerns about DEI initiatives. Address fears and misconceptions openly. Make it clear that DEI is about building a better workplace for everyone, not about exclusion or tokenism.
- Embed DEI into culture: DEI isn’t a program – it’s a culture shift. Treat it as such! Integrate it into recruitment, decision making, and everyday practices. Align DEI with your core strategy.
- Celebrate and share wins: Short-term wins build momentum. Publicly share success stories, such as promotions of underrepresented employees or increases in diversity at leadership levels. These stories inspire belief and keep DEI front and centre.
DEI impacts everyone
The biggest misconception about DEI? That it only benefits minorities, women and anyone else with intersecting identities.
Diverse and inclusive workplaces are better for everyone. Studies show that diverse teams make better decisions, innovate faster, and outperform homogenous teams. Inclusion drives engagement, collaboration, and trust – factors that are critical to retaining talent and competing in today’s market.
When DEI is done right, it creates a workplace where every voice matters and builds a culture that attracts the best people – and keeps them.
The cost of inaction
Failing at DEI is no longer an option. The legal risks are rising. The talent pool is shrinking. And homogeneity is a fast track to irrelevance in a world that demands innovation.
For law firms and businesses alike, DEI is a business necessity. It’s time to stop making excuses and start making progress. Because if you’re not driving change, you’re already being left behind.
Friska Wirya is an author, TEDx speaker, change management thought leader, and director at Fresh by Friska.
