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.

“When leadership relates the importance of diversity to the company, employees tend to pay it a little more attention,” says Carla Castro-Ciau, director of operations and diversity initiatives, American Cancer Society. “If you help implement affinity networks you can provide better service to those demographics or any customer. For me, these groups mean helping me reach those who may need help but do not have health insurance or access to care for early detection of cancer. For other businesses, it may mean creating a product or service that is more appealing to their customers.”

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 provide the environment for the diverse group of employees to thrive, their contributions will be endless,” says DeAnne Aussem, director market diversity leader, Southern California, Phoenix and Las Vegas, PricewaterhouseCoopers LLP. “You may help form affinity groups or create a network of partners — local support structures that will lead you to a hire. You don’t set out to hire a specific gender or race — but you do want to have options. These networks put the word out there for a diverse group to apply. Post position at job fairs, colleges, Web sites and newspapers.”

What you need to know

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

“To be truly successful, you need to reflect your commitment to diversity and make sure the company welcomes and supports differences,” Castro-Ciau says. “These are the environments in which employees will feel secure enough to speak out. If your employees reflect the communities you work in, your employees’ feedback will allow you to gain credit with those people. Affinity groups can be invaluable for these reasons. These groups can be (composed) of a specific gender, race, sexual orientation or group of workers with the same interests.”

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. 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 work day.”

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.

“The same things that make people unique will make your company stand out,” Aussem says. “Taking action to create a work force that can reach your diverse range of clients will make you more attractive and put processes in place that if absent may deter customers.”