Critics of "diversity, equity, and inclusion programs" (DEI) highlight that determining the realised value of DEI, of preferring staff according to their immutable characteristics e.g., race, sex, or gender, may be biased, complex, and context dependent. Rarely acknowledged and almost never reported is that DEI initiatives can be costly, problematic, or illegal. Critics point out that decisions tainted by ideological beliefs typically lead to additional overheads. Costs arise in a variety of areas e.g., the extra training for the less qualified individuals chosen to bring them up to required standards and may also encompass the consequences of a lower overall performance. Other negative aspects include a reduction in morale from the intentional categorization of systems into 'the oppressive' and 'victims,'. In summary, DEI as a recruitment policy can be a hit-or-miss affair but is only reported favourably, and often applied as a substitute for competitive corporate development, or as a virtue signal.
A recent, and patently ridiculous example of DEI trumping common sense has recently surfaced. The Canadian government has pledged a support package of $4M Canadian dollars for DEI regarding “demining operations” i.e., removing mines, with a call to make the effort more “gender inclusive”(1). Apparently, we need more diversity in the “demining business”. What could possibly go wrong? I suggest that merit is a more important determinant of a candidate’s job suitability unless we want explosively negative results. On deeper investigation we find that more money has been wasted, money that could have gone to directly removing landmines and helping victims. There are the costs associated with developing ideologically nuanced programs and then promoting them e.g., the Geneva 2023 conference regarding landmines involved 500+ delegates, plus hangers-on… A 77-page booklet was composed, designed, printed, and distributed(2, 3, 4). As if landmines and their consequences have not been a topic of consideration for a long time…
• Women will be pleased to hear that a greater ‘gender balance’ amongst mine removal specialists is needed. Feel free to develop your career in that direction. Start by trialling Diet Coke and Mentos in flask5.
New Zealand is not immune to the DEI pandemic. The Reserve Bank of New Zealand (RBNZ) is developing its own “DEI Cost Centre”. As the New Zealand Government is the primary beneficiary of the RBNZ profits, which contribute to the overall well-being of New Zealand, any money wasted by this organization comes at our expense.
The functions of the RBNZ that generate those profits include(6):
• A margin gained from the cost of printing money (I don’t see the relevance of DEI here)
• The exercise of monetary policy e.g., managing the official cash rate (OCR), and the purchase of large-scale asset purchases (LSAP), term lending programs (to banks) and so on (still not seeing how DEI will contribute)
• The purchase of foreign assets (DEI could equally be a help, neutral or hazard here)
• Operating in financial markets (an environment where merit and competence certainly trumps selection based on race, gender, or sexuality…)
• Overseeing core payment systems e.g., credit card and interbank transactions (again I don’t see DEI contributing)
I could elaborate on additional services offered by the RBNZ, but it's worth noting that one might struggle to see how DEI positively contributes to any RBNZ activities. In 2021, the RBNZ contributed approximately $140 Million NZD to the NZ Government – without the help of a DEI focus(7).
A role has been recently advertised at the RBNZ, that of "Principal Diversity, Equity, and Inclusion Adviser" with a salary of approximately $200,000 NDZ (FT)(8). Considering the RBNZ already has an HR department and around (only) 640 employees, how contributory can this role be? Further, it is the nature of these roles that they expand (see a snippet from the advert below), already, “develop a centre of excellence”, increasing associated costs that may yield minimal benefits. The assumption that DEI is relevant to this organization is already surrounded by uncertainties: I have made comments (above) regarding the irrelevance of DEI to many services provided by the RBNZ.
The details and gobbledygook of the role are outlined below.
As an exemplar, is the “DEI and Te Ao Māori lens” a beneficial, benign, or burdensome perspective regarding monetary and financial management? I don’t think that the RBNZ knows. Probably ‘burdensome’ as DEI programs cost time and money and there is evidence that they undermine morale e.g., “box ticking” and “mandatory training sessions”.
My questions are:
• Aren’t they supposed to deliver services and a profit?
• Is developing a centre of DEI excellence their core business/mandate?
• Do they have time on their hands?
DEI is an ideological program, and we see from numerous examples, both local and international, that the results are mixed and, in most industries, inappropriate. Yet, DEI is being introduced in hundreds of departments and organisations all over New Zealand – the national waste and accumulated unproductive disadvantages are significant for our small economy. Competitor countries deliberately don’t get caught up in the double-speak of DEI.
Furthermore, DEI units echo the functions of McCarthyism or Stalinist political departments and should be avoided. HR staff effectively become commissars and counterproductive to the central role for which HR was traditionally established. Going against HR principles and the overall performance and well-being of any organization is the notion of compromising hiring primarily based on immutable attributes rather than merit and competence(9).
The solution to this wastage is:
• For CEO’s and other ‘leaders’ to more seriously scrutinise whether DEI policies are a benefit or a hazard to their particular organizations. To consider if, like the foolish ‘demining’ programs, are these “leaders” priming their organizations for substandard performance and additional costs?
• Further, consideration needs be given regarding whether DEI costs provide an adequate return on investment. The much vaunted “diversity dividend” is a unicorn frequently used to justify a cost structure that primarily benefits consultants, ideologues and virtue signallers but is rarely captured by the organization. RBNZ should investigate more before it invests in DEI under the supposition that there will be a worthwhile outcome.
I believe that the RBNZ is somewhat behind the times. To help RBNZ’s deliberations I suggest they consider the determinations of “Blackstone”.
Blackstone, like the RBNZ, operates in the finance environment, however, Blackstone is significantly larger, it has approximately $1 TRILLION USD under management. They have about 4,735 employees, seven to eight times more than the RBNZ (640), and could supposedly claim a great need for DEI, if it was appropriate and beneficial for the industry(10).
In 2023 Blackstone terminated its DEI staff and shifted its focus to hiring for socioeconomic diversity and changing job requirements, to find more diverse talent without specifically targeting a particular race, ethnicity or sexuality but rather focus on competency and merit(11). These re-worked HR functions more closely align with traditional HR activities and with the companies’ legal obligations. They are not alone in their shift from nihilist employment philosophies(12).
New Zealand has an edge by strategically lagging in adopting policies and behaviours from other countries or industries.
• Before we ape neighbouring ideologies and business fads, we should look at the outcomes.
• Before we waste more time and money on DEI, we should consider how we can be stronger in unity; something this country desperately needs. A worthy goal which should be supported by the RBNZ both internally and externally; stability is part of their remit. Maybe they could show “leadership” in this area.
Examples and experience show us that organizations, and cumulatively a nation, benefit more from competence and merit than by the questionable benefits that could arise from costly, contentious, and ideologically driven DEI programs.
References
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