DEI Cuts Could Worsen Tech Talent Shortages Amid AI Hiring Boom

March 6, 2025 – As enterprises race to secure AI talent, scaling back Diversity, Equity, and Inclusion (DEI) initiatives could further strain recruitment and retention efforts. Nearly half of hiring leaders fear DEI rollbacks will make their companies less appealing and drive higher turnover rates, according to General Assembly’s State of Tech Talent report.

AI Hiring Challenges

The study highlights an increasing talent shortage in AI, with two-thirds of recruiters stating that hiring AI-skilled candidates is harder than recruiting for other tech roles. Key findings include:

• 68% of enterprises report offering higher salaries to AI candidates, up from 64% last year.
• 75% of hiring leaders worry they are rushing AI hires without building a sustainable, diverse talent pipeline.
• 60% of organizations say AI's rise has increased the need for diversity initiatives.

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The Cost of DEI Rollbacks

Despite the demand for diverse AI teams, 4% of HR professionals said their companies cut back or eliminated DEI hiring efforts in the past year. Hiring leaders warn this could:

• Increase hiring costs due to a smaller, less diverse talent pool.
• Raise turnover rates, as Millennial and Gen Z employees prioritize inclusive workplaces.
• Hurt employer reputation, with 45% of respondents stating that candidates will see their company as less attractive without strong DEI policies.

AI Knowledge Gap Among Executives

Beyond recruitment, companies face a leadership blind spot when it comes to AI. The report found:

• Most VPs and directors have never received AI training.
• Only 40% of executives feel confident in using AI tools without risking company data.
• 25% admit they lack knowledge to assess AI vendors.

"Executives must understand AI’s legal, privacy, and ethical implications," said Daniele Grassi, CEO of General Assembly. "Companies failing to upskill leaders will face risks ranging from data breaches to competitive disadvantages."

Building an Inclusive AI Future

To avoid long-term talent shortages, experts stress the importance of upskilling employees, fostering diverse teams, and establishing AI policies. Companies investing in sustainable hiring strategies will have a competitive edge in the evolving AI-driven economy.

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