Over the past few years, we’ve seen a major shift in how companies approach diversity, equity, and inclusion (DEI). A lot of organizations that once made big public commitments have quietly scaled back, cutting DEI programs, disbanding Employee Resource Groups (ERGs), or eliminating dedicated roles altogether. Some say it’s budget cuts; others claim they’re taking a “new approach.” But let’s be real—DEI has become a hot-button issue, and many companies are backing off instead of doubling down on DEI vs. MEI.
Enter MEI: merit, equity, and inclusion. On paper, it sounds like a fair evolution—focusing on qualifications and individual achievement while still promoting fairness. But in reality, it often serves as a convenient rebrand that shifts the focus away from systemic barriers. Companies pushing MEI tend to emphasize “merit” without addressing the fact that opportunity hasn’t been equal to begin with. If the playing field was already level, this would make sense. But it’s not, and MEI doesn’t fix that imbalance.
One of the biggest red flags we’re seeing is the dismantling of ERGs. These groups have been a critical source of mentorship, advocacy, and community for underrepresented employees. The argument for cutting them? Some companies say they want a more “inclusive” environment where support isn’t separated by identity. But let’s call that what it is—an excuse. ERGs exist because employees need spaces to connect over shared experiences. Taking them away doesn’t create inclusion; it just leaves people without support, leaving companies caught between DEI and MEI.
Another shift? Companies stepping back from real DEI goals. It’s easy to talk about diversity in broad strokes, but fewer organizations are putting measurable outcomes in place. With legal challenges to affirmative action and corporate DEI programs making headlines, enterprise brands are getting nervous. But without accountability, these efforts stall. And when that happens, the progress we’ve made over the last decade starts slipping away, showing how crucial it is to commit to DEI vs. MEI long-term.
Target’s recent backtrack on DEI initiatives highlights just how damaging this shift can be. The company pulled back on DEI efforts, which led to a drop in foot traffic and sales. Customers and employees alike felt alienated by the decision, which in turn hurt their brand. It’s a perfect example of how abandoning DEI commitments can backfire—companies need to stay true to their values or risk losing consumer trust and loyalty. This backslide between DEI vs. MEI isn’t sustainable.
Inversely, Costco’s commitment to DEI is a strategic business move that connects with a diverse consumer base and reflects evolving societal values. By doubling down on these initiatives, Costco not only reinforces its brand as inclusive but also fosters stronger relationships with customers who prioritize these values.
So, what now? DEI may be facing pushback, but the demand for inclusive workplaces isn’t going anywhere. Employees still want to work for companies that actually walk the talk—not just drop buzzwords when it’s convenient. And businesses that completely abandon DEI? They’re going to struggle to attract and retain top talent. If MEI is going to be more than just a watered-down version of DEI, it needs to address systemic issues, not just shift the conversation to something more comfortable.
Bottom line: Companies need to be clear about what they stand for. If DEI is truly a priority, it should show up in hiring, retention, and leadership—not just in a corporate statement. And if they’re moving toward MEI, they need to prove that it’s not just a way to deprioritize equity. Changing the language doesn’t fix the problem—action does. DEI vs. MEI isn’t just a debate; it’s a path to meaningful change.
If you’re looking for an inclusive touch on hiring in 2025, reach out to Pierson Wofford . Check out more blogs from the Market, User and Consumer Insights group at Smith Hanley Associates on our page.
