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.
“Finding talent always comes first,” says Candice Barnhardt, vice president, chief diversity officer, Nationwide Mutual Insurance Co. “This isn’t with the sacrifice of diversity. If you’re not naturally surfacing a diverse pool of candidates, you’re not doing something right.
“Having a diverse team is a powerful way to attract and retain clients. They want to know that they are represented and understood. It is worth making sure you are posting the position in areas that all age groups and diverse individuals will look. Having a network of local diversity groups can help pull in a list of candidates, as well. Having a good relationship with the community and employees goes hand-in-hand.”
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.
“Clients change, and to be impactful, you as a business need to change, too,” says Joel Howell, diversity leader, PricewaterhouseCoopers LLP. “In order to become literate in other cultures, you have to bring inclusion to life. A diverse group of employees can help you understand the full range of likenesses and differences you will find in customers.”
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.
“You can initiate an internship that will encourage and attract diversity,” says Andrew Kramer, area executive director for the American Cancer Society. “The internship will allow a diverse group of workers to grow acclimated to the company, then perhaps begin working with us. If your company has volunteers, they can also help form tentacles that can attract diverse talent.”
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.
“Customers demand that you can speak internationally,” Howell says. “Any company that ignores diversity risks becoming obsolete. Leveraging teams with diversity helps in all business challenges. It’s not just the right thing to do; it’s the only thing to do.”
What you need to know
Diversity isn’t about being politically correct; it’s about keeping your business competitive.
“Diversity allows for differences in creative minds,” Kramer says. “You wouldn’t be able to capture a different way of thinking if you limited yourself to a common staff. Most companies are world economists and want to appeal and relate to everyone and the way is through the staff.”
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 isn’t an issue you can just throw money at and it goes away,” Howell says. “You need to encourage group thought and provide an environment in which that is possible. Creating affinity groups is a way to get employees to feel secure enough to discuss issues that will benefit customers that they may not feel comfortable discussing in a broader forum. By giving affinity groups a marketed project, they can tell you ideas that will work best as they see it.”
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.
“When you get new hires, tell them how your company handles diversity on day one,” Howell says. “Explain diversity the way you define it and what it means to the company. Letting them know why diversity is important will help them understand the process and get on board with ways to make it work best.”