Debunking diversity Featured

8:00pm EDT March 26, 2009

 

The million-dollar question about making an investment in diversity is: Will it pay back?

While experts say diversity in the work force is a business imperative, defining diversity by employees’ physical attributes won’t foster a functional or profitable environment.

In fact, the definition of diversity is always evolving. Twenty years ago, the word spurred thoughts of gender issues since men held a high majority in the work force, while today the gender gap is narrowed and is less of a concern. Diversity’s definition has expanded, and diversity of thought, education, socioeconomics, religion and life goals are only a few of the seemingly endless list of terms people use when defining the term for themselves. These differences in your employees can make or break your business. If you foster an inclusive environment, where all employees can contribute thoughts and plans to improve your product or service in confidence, you will improve your bottom line.

A February 2009 Groundbreakers report by Ernst & Young defines diversity as an equation for success and notes that research has proven diverse groups outperform homogenous groups even in cases where the nondiverse groups have heightened abilities. Scott Page, a professor of complex systems at the University of Michigan at Ann Arbor, created the diversity prediction theorem, which says the collective ability of any crowd is equal to the average ability of its members plus the diversity of the group, claiming diversity is a sure way to attain a strategic advantage.

“By 2016, two-thirds of the civilian work force will be women and minorities,” says Billie Williamson, senior partner and Americas inclusiveness officer, Ernst & Young LLP. “You need an appropriate balance of employees that represent your clients. Having diversity also helps each employee fulfill their true potential in the company — but you need to know how to leverage the mix.”

Still, the return on investment is the hard evidence you want to justify devotion of time and money. Some say it’s difficult to quantify diversity ROI, but metrics are attainable. If you start with a plan that establishes your company goals and maps out a strategy, you can document the benefits and obstacles of a diverse team’s functionality that will best benefit your business.

Why it’s important

Since the country’s demographics are continually changing, a failure to branch out and move past your comfort zone when hiring and communicating with employees will ultimately result in financial punishment for the business.

“We all come away with different perceptions even if we’ve all sat in on the same conference,” Williamson says. “The way we focus, think about issues and our frame of reference is all different, so having these differences on the same team can provide insights that benefit the customer — in your services and products.”

U.S. Census Bureau reports show Hispanics are the fastest-growing population, with an increase of 121 percent since 1999. The Asian population nearly doubled since 1990 and the African-American population is predicted to increase to 65.7 million strong by 2050, an increase of 15 percent since 2008.

“If you have a Hispanic customer base, you might want employees with that background so they have the skill sets or language necessary to communicate,” says Harold D. Jones, shareholder and labor law expert, Law Offices of Anderson + Jones PLLC. “But most businesses want to appeal to any customer, so having the same diversity in the employees makes sense.”

Affinity networks — employer-recognized employee groups who share a common race, gender, national origin or sexual orientation — are a great way to attract and retain diverse employees. Networking by affinity groups reduces turnover and gives companies insights to consumers they otherwise may have never understood.

General Motors Corp.’s People with Disabilities Affinity Group has been a consistent resource for providing input and support relative to accessibility of products and services. The group played a role in helping OnStar develop the addition of TTY capability, the text telephone for the hearing impaired, for OnStar-equipped vehicles. Another example of diversity was witnessed in PepsiCo Inc.’s Hispanic professional organization called Adelante. Its Hispanic employee network provided insights that resulted in the development of the guacamole chip. In the first year of distribution, PepsiCo’s Frito-Lay division sold $100 million in Lay’s guacamole chips.

“Today, businesses don’t have the luxury of not appreciating diversity,” says Susan Frear, director of education for the Dallas Human Resource Management Association Inc. and adjunct professor at the University of North Texas and the University of Phoenix, where she teaches human resource management and human performance technology. “You must be able to speak to any potential customer or client or you risk losing their business.”

What you need to know

Diversity isn’t about being politically correct; it’s about keeping your business competitive.

“Making diversity work starts with resources from the hiring process,” Frear says. “Make sure you post positions in newspapers, blogs, Web sites and areas that may attract a variety of candidates. Also, a policy is necessary to plan a strategy and in order to post the standards and management, but for the most part, that’s just a technicality. The process needs to be a part of the way business is conducted. Always think about how you can meet your customers’ needs. For example, women typically write out household checks so in order for customers to purchase the more expensive specialty checks, designs are made that target a female audience. The women-targeted designs may not be as appealing to women if they were men’s rendition of what is interesting to women.”

Keep in mind the customers who you want to attract and then investigate opportunities in markets in which you want to expand or improve business. If you’re interest is in attracting a broader customer base, employees should mirror the communities in which you want to expand. Forge relationships with diverse community organizations and let them know about opportunities in your organization. Sponsoring events that interest diverse groups makes your company more attractive to diverse candidates. For example, host events in coordination with Cinco de Mayo, Chinese New Year or Disability Awareness Month, and make your business’s diversity interests and job openings known.

If you’ve established affinity groups within your company, they can also help with recruiting. They may be able to give you suggestions that will help your business attract more diverse candidates and offer ideas of where to post positions.

Starting an affinity group is easy.

“You should be intrigued with the positive impact diversity can have on a business,” Williamson says. “In order to capture our hearts and minds, there must be a business case for diversity, and there is. A diverse and inclusive environment promotes useful ideas, and suddenly, you’re not just complying with diversity requirements, you want to do more. You probably have generational differences in your company, which makes the environment richer.

“It can take different generations to tackle a problem, but the group must be flexible. You can’t have the older employees say, ‘They’re too young; what do they know?’ and the younger employees say, ‘They’re so old; they can’t think anymore.’ Allow for affinity groups or employee resource groups to make contributions — there may be some finances necessary for these gatherings, but in general, they take place at the facility and during the employees’ regular workday.”

Hiring managers also need to keep in mind how to motivate and manage their staff as part of a recruiting plan. Experts encourage incentives for staff contributions to a diverse work force considering employees’ job satisfaction can be your best advertising.

“You never know who your future customer will be, so you want to be able to attract key talent and be able to appreciate what they can bring,” Frear says. “Being successful in diversity is just a mindset.”