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 equals business excellence,” says Virginia G. Essandoh, director of diversity for Ballard Spahr Andrews & Ingersoll LLP, which has 570 attorneys and 1,000 staff members who participate in ongoing diversity training. “Diversity training doesn’t have to be a costly investment. It just needs to teach employees to value and respect their differences to have better communication.”

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.

“You hire the best and brightest first, and everything else is secondary,” says Linda York, market diversity leader, Philadelphia Metro and Lake Erie markets, PricewaterhouseCoopers LLP. “In order to acquire the best candidates, you must make it apparent in a mission statement or company policy that you will not discriminate against an employee for race, gender or sexual orientation. Since it’s still legal to fire someone for being gay, you may be eliminating a great employee because they’re afraid of losing their job to discrimination. You also have to make sure you are reaching diverse candidates by advertising positions in areas they’ll look.”

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.

“It’s a racist stereotype that says hiring a minority means getting a lower-quality employee, but that mindset is out there,” says Anthony R. Rodriguez, M.D., dean of student affairs and diversity, Drexel University, College of Medicine. “The reality is diversity enhances the educational process and a business. Make sure you don’t have a bad definition of diversity — don’t leave anyone out. You can avoid that by saying inclusive environment.”

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.

“There are very few women or minorities in upper-management positions despite the proven benefits of a diverse work force,” York says. “After hiring a diverse team, you need to provide them with the tools to continue to grow within the company.”

What you need to know

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

“Clients are global,” Essandoh says. “The Latino population is growing faster than any other, and there is buying power behind the numbers. Considering just this group, the spending will go up 400 percent rapidly. You want to have employees that can help you reach those consumers as well as other demographics.”

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.

“Affinity groups profoundly affect marketing and business strategies,” Essandoh says. “These groups help you ensure nothing is offensive to certain groups. It only takes one mistake to deter a customer from choosing to do business with you a second 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.

“I know from experience that a number of patients want to be treated by a doctor that shares their background,” Rodriguez says. “It’s comforting to think someone understands you. This is the same thing in business — especially now. If someone is giving you their hard-earned money, they’re going to want to feel appreciated and comfortable with you. There isn’t a big need to set money aside for diversity, it needs to be the way you think and expose yourself to it so you can better understand others. In fact, that (attaching a dollar amount) is marginalizing the issue. There isn’t a dollar amount that you can attach to something that is essential.”