When the long-standing Executive Order 11246 was rescinded on January 21, 2025, and Executive Order 14173, titled Ending Illegal Discrimination and Restoring Merit-Based Opportunity was introduced, contractors were left confused and unsure how to proceed. With no definition of what constitutes “illegal DEI and DEIA policies”, employers began to make changes to their hiring policies, employer branding, and internal programs, including employee resource groups (ERGs), to align with the new order. Six months into the new order, questions remain. One such question is, “How will these changes affect our culture and employees sense of belonging?”

I was recently contacted by a Member in the aerospace and defense industry, who was interested in understanding how these recent regulatory changes were affecting employee resource group strategy and implementation at other organizations. A survey was quickly administered to the membership and two weeks later, the results were in and ready for review.

The overall consensus? ERGs are here to stay, at least for now.

Despite regulatory changes, 91% of respondents said that ERGs continue to play a role in their recruitment, retention, and employee engagement efforts, with another 76% stating that they openly promote their ERGs externally on their website.

Respondents were split directly down the middle (50/50) on whether they have revised any ERG-related policies or practices since the rescission of Executive Order 11246. While some note that their revisions are minor language changes, removing the terms “diversity” or “DEI” (opting for terms such as “community” and “belonging” in their place), others stated that their ERGs have always been open to everyone–the current recommended guidance for ensuring ERG compliance with EO 14173–and no changes were necessary.

While 86% of respondents state that their ERG participation levels have not changed this year, several respondents reported an increase in overall participation and interest from employees. On the other hand, a few noted that participation has decreased specifically for their LGBTQ+ ERGs. This comes as no surprise, as a recent poll by Monster reported that 42% of U.S. workers feel less comfortable discussing gender identity and sexual orientation compared to last year.¹

So, what about the outlook on company culture?

Perhaps the most impactful part of the survey are the open-ended responses to the final question: What best practices or lessons learned can you share with other federal contractors navigating compliance and ERG support during this time? Among many, here are a few that stood out to me.

“If there isn’t change management, the impact can be quite negative overall and it may not be something that is felt in the organization immediately, however, the passion that exists among individuals who are willing to give of their personal time to support ERG work will diminish and you’ll be left with very vanilla ERG programs.”

“Don’t make any rash decisions as ERGs are still a positive thing for employees in the organization. The one thing I would suggest doing first is confirming they are open to ALL employees to participate.”

“The employee population felt strongly that ERGs need to remain in place and provide a valuable space for community.”

“These groups are more important now than they were before, push through to ensure employees are supported with these safe spaces to connect and be seen, heard, and valued. There are ways to make it work and your people and potential talent will recognize your efforts to foster a sense of belonging for everyone.”

“Our CEO says, ‘Culture eats strategy for breakfast.’ We’ve been fortunate to have support from the highest levels.”

“It took A LOT of discussions, review with Executive Leadership and Counsel but everyone moved forward with the knowledge of how important the ERGs are to our employees, the positive impact they have on employee morale and the negative message it would send if they were disbanded. With that initial agreement, all groups were able to look for the ‘yes’ in the sea of ‘no’ and develop a plan that would save the ERGs and send a positive message to our employees.”

At a time when change is happening rapidly, employees want stability and a sense of security at work. Isn’t that what we all want? When we create safe, supportive spaces where workers can feel accepted and bring their truest (and therefore, best!) self to work, we all win. Collaboration and creativity flow. Morale soars and turnover plummets.

While EO 14173 may change the way we recruit and hire, merit-based hiring will always result in a diverse workforce, by its very nature. How we treat those individuals once they’re in the door, is where true culture is created. Your employees are your greatest asset, and ERGs are a great way to show you respect and care about them as people. Always keep your eye on the legal environment and consult with your legal team, but never lose sight of what’s important: a workplace where your employees thrive.

[1] https://monsterworkwatch24.my.canva.site/monster-poll-pride-month