Ditching DEI is bad for employees and employers: HRC report

LGBTQ+ employees at companies that have rescinded inclusionary policies are finding their workplaces hostile, and some say they’ve become less productive, according to a new Human Rights Campaign Foundation study. But inclusion pays off for workers and companies.

The foundation, the educational arm of HRC, released its 2026 State of the Workplace for LGBTQ+ Americans and Corporate Equality Index Wednesday. It found implications for both employees and employers.

Pressure from the federal government, under Donald Trump’s administration, and from right-wing activists led many companies to end diversity, equity, and inclusion policies in 2025.

Related: These 35 major companies caved to Trump and rolled back DEI programs

“While not eliminating civil rights protections, these actions signaled increased scrutiny of DEI-related policies and practices, particularly where they intersect with federal funding or contracting,” the report says. “For many employers, these signals created confusion and unease about how to comply with existing civil rights laws, continue legally permissible DEI programming, and avoid enforcement attention at the same time. For some, compliance concerns led to a significantly dialed back approach by companies, including by influencing how inclusion efforts are designed, documented, and communicated internally, and especially externally.”

The researchers found that 39.1 percent of U.S. workers surveyed said their employers have rolled back DEI practices. At those companies, 54.2 percent of workers said they had experienced stigma or bias on the job, compared to 24.9 percent of those at organizations that maintained DEI policies.

Eighty-six percent of employees who described their workplace as hostile said they were at risk of leaving their job, compared with 43.1 percent of those in nonhostile environments. This pattern held across both LGBTQ+ and non-LGBTQ+ workers.

More than one in four (27.4 percent) who indicated risk of leaving their job reported being less productive, compared with 7.4% of workers who are not considering leaving. This relationship was especially pronounced among LGBTQ+ workers: 47.9 percent of LGBTQ+ workers who reported being at risk of leaving also reported decreased productivity — nearly double the rate observed among non-LGBTQ+ workers. Also, 23.4 percent of LGBTQ+ workers who were not considering leaving still reported reduced productivity, compared with 6.2 percent of non-LGBTQ+ employees.

Related: What is DEI, what does it mean, and why are companies really getting rid of it?

“Our research shows the strength and the strain of this moment on LGBTQ+ workers, consumers, and the companies that count on us,” Kelley Robinson, president of the HRC and its foundation, said in a press release. “It’s important to be clear — it remains unconstitutional to discriminate against LGBTQ+ workers. And nearly 30 percent of Gen Z identify as LGBTQ+ and the community represents $1.4 trillion in buying power. But LGBTQ+ workers are experiencing increased hostility in companies that abandon commitments to diversity and inclusion that are both lawful and a benefit to the bottom line. Meanwhile, companies that communicate clearly and lead with transparency earn trust, retain talent, and strengthen their business. And they’re overwhelmingly backed by their shareholders who have rejected anti-DEI measures by nearly unanimous votes. At a moment when fear and confusion are growing, providing clarity and confidence isn’t just good leadership — it’s essential.”

Fewer large employers submitted information for HRC’s Corporate Equality Index than last year, apparently due to the anti-DEI climate. The CEI measures how supportive companies are of their LGBTQ+ employees, based on nondiscrimination policies, benefits, and more. There was a 65 percent drop among Fortune 500 companies, from 377 in 2025 to 131 in 2026. Many of these companies hold federal contracts.

Of the Fortune 500 companies in the CEI, 108 achieved a perfect score of 100. Overall, 534 achieved this score. Last year, 765 companies had a 100 score. The participating companies that already had DEI policies sustained or increased them, according to the report.

Related: These 25 major companies still have DEI practices

Ninety-eight percent of CEI-rated employers explicitly include sexual orientation and gender identity as part of their nondiscrimination policy. Seventy-seven percent provide inclusive benefits for same- and different-sex spouses and partners. Ninety-one percent, a record 1,321 of 1,450 respondents, offer at least one comprehensive health care plan option with current market standard coverage.

Seventy-nine percent have a robust set of practices to support cultural competency regarding LGBTQ+ employees, 97 percent have an employee resource group or diversity council that includes LGBTQ+ and allied employees and programming, and 1,135 have adopted gender transition guidelines to establish best practices in workplace inclusion.

Seventy-seven percent have outreach or engagement initiatives to the LGBTQ+ community beyond their employees, while 83 percent have written guidelines that prohibit philanthropic support of nonreligious organizations with an explicit policy of anti-LGBTQ+ discrimination.

Commitment to the LGBTQ+ community pays off, according to the report: High-scoring companies in the CEI have an eight times higher net income than their lower-scoring peers.

“The data makes clear that many LGBTQ+ workers are feeling less safe and less certain about their place at work,” RaShawn Hawkins, senior director of workplace equality at the HRC Foundation, said in the release. “In that environment, the Corporate Equality Index is far more than a score on paper — it’s a tool HR leaders rely on to navigate uncertainty, support LGBTQ+ workers, and communicate clearly at a time when employees are looking for signals they can trust. Our goal is to work in partnership with companies, and the CEI provides benchmarking, education, and resources that help employers strengthen workplace culture, build trust with their workforce, and compete for and retain top talent.”

The full State of the Workplace report and Corporate Equality Index can be found here, and an executive summary here.

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