Let me start with what corporate diversity doesn't do:
Diversity doesn't improve performance:
You may have seen articles promulgating the idea that diverse workforce performs better and makes companies more profitable -- several commentators here have mentioned it as well. Many of these studies are conducted by financial institutions and consulting firms. However, rigorous academic research and meta analysis gives a different picture:
Despite popular press accounts that suggest that teams high in gender diversity outperform those composed only of men or only of women, rigorous research does not support this conclusion.
Board gender diversity either has a very weak relationship with board performance or no relationship at all... There is no evidence available to suggest that the addition, or presence, of women on the board actually causes a change in company performance... The research results suggest that there is no business case for — or against — appointing women to corporate boards.
Even if the meta-analyses revealed a stronger relationship between board gender diversity and firm performance, we couldn’t conclude that board gender diversity causes firm performance. To establish causal effects, you need to conduct a randomized control trial. But, that’s impossible here; we can’t randomly assign board members to companies.
If different viewpoints were essential to making good decisions and promoting innovation, then it's very curious that companies are not looking for diversity in ideology, religion, or culture -- which are literally, different mindsets/viewpoints. I have not seen corporations promulgating the number of Muslims, Zoroastrians, Taoists, and utilitarians they hired. Instead, when people talk about corporate diversity, they're talking about gender, race, and sexuality. Likewise, if they wanted people with different background and "personal experience," then they should be hiring people who grew up in poverty, don't have a college degree, etc.
Furthermore, during the tech recession, DEI jobs were hit the hardest. If diversity equated to more innovation and profit, apparently the most innovative and profitable companies, tech companies, certainly don't think so, given their actions:
One employee on the diversity and inclusion team said most of her department had been cut, including her. Similarly, Twitter, now owned by Elon Musk, saw its DEI team evaporate almost overnight.
Even with pledges and recognition that the people experience matters, HR and D&I are often seen as pure overhead and perhaps a little bit distant from the profit-making engine.
Another argument I hear is that a diverse workforce will build better products. While a particular background may provide some intuition and and insight, it doesn't necessarily mean an employee (even an expert) will correctly understand the needs of the consumer. That's why continuous market research, user feedback, and data analysis are key components to understanding customer needs.
So then, why do corporations promote "diversity"?
1. Diversity is used as a cover for union busting and subverting collective bargaining:
Union-busting firms have re-branded themselves, coopting DEI and "diversity" to make their industry more palpable:
Major corporations are at once under pressure to appear sensitive to employees from marginalized groups and eager to blunt unionization efforts that would hurt their bottom line. Thanks to consultants like Greer and others, these companies can sometimes kill two birds with one stone by wrapping anti-union talking points in a patina of racial sensitivity and commitment to diversity.
“There’s kind of a jiujitsu, to get employees thinking about racial justice issues, at least superficially, as a way to deflect labor and collective bargaining,” said Michael C. Duff, a law professor at the University of Wyoming.
Starbucks is particularly notorious for this behavior:
One could take a quick glimpse at the Starbucks Stories and News website and their Equity Inclusion and Diversity Timeline to determine just how invested the company is in social justice causes... Starbucks seems to check all the progressive boxes. Yet, where do they stand on unions, unionization, and the plight of the proletariat... Starbucks CEO Howard Schultz has essentially been on a crusade across the country to stem the unionization effort... The company is now the subject of National Labor Relations Board investigations (NLRB) by virtue of their union-busting efforts across the country.
One wonders as to whether the support for aforementioned woke causes by corporate America is based in a shared vision for progressive ideology or is also just an effort in shoring up sales and the bottom line.
2. Diversity as woke-washing:
Many companies engage in woke-washing, disingenuously claim to support liberal causes in order to gain favor with those who champion them, and promulgating their commitment to diversity is one such action.
The DEI spending of 2020 and 2021 was a signal sent from executives to workers that the bosses are good people who value DEI, a signal executives sent because many workers valued it. Put another way, the outlays were symbolic.
Even the CIA, well-known for their history of overthrowing democratically elected governments and replacing them with brutal tyrants, running covert ops to oppress minorities, and generally causing misery for brown people around the world, released a recruitment ad where manage to utter every single "woke" buzzword and to re-brand themselves as "diverse." Woke-washing and diversity-washing serve a duel purpose: deflect from wrong doings, and use it as a marketing strategy.
3. DEI consultants make a career out of it, so they promote it:
As diversity has became a profession in the US, DEI consultants are incentivized to extol the virtues of diversity to preserve their own jobs:
The pages of the diversity officers’ journal reveal much more fascination with increasing demand for their own employment—via compulsory programs in “cultural competence” for example—than in the hard work of mentoring and tutoring.
4. Perhaps most importantly, diversity has become part of America's moral identity:
In the US, both consumers and employees demand diversity from companies:
Companies today are under a lot of pressure to take a stand on social justice, and to act accordingly
64% of consumers are “belief-driven buyers”—that is, they may choose to purchase, switch from or to, or boycott a brand based on its stance on social issues.
Ultimately, "diversity" is seen as virtuous and good, and a large portion of the population want organizations and institutions to promote their moral values. This drives corporations to promote (or at least pretend) that they too are moral and value the same things, including valuing diversity.