The million-dollar question about investments 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, socio-economics, 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.
“You can’t just hire people that look and talk like you,” says Conrad L. Mallett Jr., president and CEO, Sinai-Grace Hospital. “Companies aren’t currently doing a great job of being diverse and making it work, and it can be as simple as networking, which is important to get a range of qualified, diverse candidates. Many just don’t realize the vast benefits.”
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.
“Good service is what’s most important to customers, and if they don’t get that, you’re not going to get any points,” Mallett says. “You don’t have to sacrifice excellence for diversity and you shouldn’t. There are degrees of experience your employees will have and other diversity facets that make you a more complete business. There’s no doubt that a diverse work force helps produce better products and service, but you have to keep your eye toward the possibility for the minority and not just the mandate.”
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 always look for the best candidate and have made job openings available for viewing in a variety of arenas, you will naturally grow a diverse work force,” says Lori Walker, director of diversity, Compuware Corp. “Keep in mind the end result to acquiring a diverse team is morale, contributions and ideas. An entire staff of people who have had similar experiences will have similar ways of looking at and resolving issues.”
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.
“Include elements of diversity in employees’ performance plans and evaluate them on that,” says Linda D. Forte, senior vice president of business affairs and chief diversity officer, Comerica Inc. “This will help employees understand the leadership’s guiding vision of making an inclusive environment work.”
What you need to know
Diversity isn’t about being politically correct; it’s about keeping your business competitive. “Diversity allows your business to attract the best new talent,” Forte says. “You’ll be more competitive because you’ll have a better understanding of customers’ needs. You’ll continue to understand who your customers are and how they can continue to be attracted to you.”
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.
“Diversity is often thought about as only a race issue, because that’s the area that has challenged our society the most,” Forte says. “But there are many components of diversity. You can promote employee resource groups (also known as) affinity groups that allow employees to meet about a particular issue. They can brainstorm about projects or ways to improve a service. The point is to get the perspective of female or disabled etc. employees to better serve those consumers. Make the groups worthwhile for employees provide incentives and time for the meetings that doesn’t detract from their work or personal time.”
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.
“Many business opportunities are made possible through diversity,” Walker says. “Diversity helps you compete at the global level helping the company as much as the employees. Tangible benefits include productivity, retention and an end result of profit. Employees are a company’s greatest asset and allows them to be more flexible with services and products.”