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.

“Diversity is an important consideration when hiring new employees,” says Bahaudin G. Mujtaba, chair and associate professor of management, H. Wayne Huizenga School of Business and Entrepreneurship, Nova Southeastern University. “Managers should look for the best candidates first; try to create a team that brings diverse skills and characteristics as to complement the existing knowledge and abilities of the group in the department. Assess what the company already has and hire to fill gaps.”

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.

“Consumers want someone they can communicate with,” says Rob Steward, vice president of sales, LatPro Inc. “LatPro.com is a niche job board for Hispanic and bilingual professionals — we post positions and network so employers and those seeking employment can connect. These types of sites are increasing because the population is changing in the U.S. Don’t stop recruiting even if there’s a hiring freeze. Gather a group of diverse candidates you’d like to employ — and be honest with them, noting your interest in connecting in the future.”

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.

“The demographics are changing,” says Amparo Bared, vice president of human resources and talent management at Ryder System Inc. “You need to play a key role in accountability and ownership and that means being flexible enough to have employees that can best serve your customers. Create deliberate initiatives and goals that support your strategy.”

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.

“If you have a Spanish-speaking customer base or want to reach a specific demographic, it would be smart to have staff that can effectively communicate with them,” Steward says. “With Web sites being used so frequently for daily business function, companies can do business anywhere they want. Having a diverse team will provide insights to reaching people around the globe. Age diversity is equally important. In an interview, you’re not allowed to ask a person’s age, but they’re gender and race are very apparent. Try not to allow age to have a negative impact on your decision because your customers are old and young.”

What you need to know

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

“If you are playing catch up, you’re behind the eight ball,” Bared says. “You want to see diversity all of the way into your management ranks. Even if diversity isn’t a requirement or necessity, it’s good business sense. It will help your company grow by doing a better job.”

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.

“Once you have a diverse team, you’ll want to utilize their skills,” Steward says. “Having affinity groups is the best way to encourage brainstorming among employees. You can provide employees with a specific project that you need help in reaching the customer. In an affinity group, employees may feel more relaxed to speak their ideas, too — then as a group, they can present the consensus on how to approach the issue, which makes employees feel they’ve helped their community and employer, while the company can potentially profit.”

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.

“Diversity when managed effectively, can be beneficial for all industries in all departments,” Mujtaba says. “Diversity should be seen by customers and integrated behind the scenes for critical decisions regarding product manufacturing, marketing, expansions, strategies, recruitment and human resource development. If you don’t take advantage of the benefits of a competitive work force, your competitors will.”