Workforce Diversity and Discrimination Issue Facing Employees: Evidence from S&P 1500 Firms

In this study, we focus on a seemingly paradoxical phenomenon: while more firms are increasingly committed to diversity initiatives, the discrimination issues in business have ironically increased. Using a sample of S&P 1500 firms from 2009 to 2021, we found that a firm’s workforce diversity commitment increased the incidents of discrimination issues facing employees. We aim to provide insights on why a firm’s workforce diversity might fail to achieve its intended goals, or even worsen the underlying issues. We argue that firms might fail to walk the talk in implementing their diversity initiatives commitments. Employee silence could prevent firms from noticing the discrimination issues or receiving the feedbacks about the diversity initiatives. Also, workforce diversity might lead to unfavourable stereotypes against the targeted employees. We also examined the conditions under which a firm’s diversity initiatives tend to be more or less effective in addressing the issues of discrimination in employment.