Diversity in Corporate America: Still a Work in Progress

Weldon J. Rougeau, a long-time civil rights activist, has considered the issue of workplace diversity from many perspectives -- as director of the office of federal contract compliance programs at the U.S. Department of Labor during the Carter administration, as president of the Congressional Black Caucus Foundation and even as a prisoner for 78 days (58 of them in solitary confinement) in a Baton Rouge, La., jail cell when he was a student activist.

But perhaps Rougeau's most poignant perspective on the current and future position of workplace diversity in America comes from his nearly 10-year run as an American Express vice president in the 1980s. "I was the only black executive in many meetings," recalls Rougeau, now an attorney with Arent Fox in Washington, D.C. "I went through a lot of things that hopefully most executives won't go through, and I had to deal with a lot of problems as one of the only black executives."

Times change. These days, Rougeau exalts his old employer as a symbol of workplace diversity progress. Kenneth Chenault, CEO of American Express who joined the company around the same time as Rougeau, is one of the most powerful and influential people on Wall Street and he is African American. "Just the mere presence of blacks in CEO and chairman positions promotes a lot of change," says Rougeau. "It promotes change among the employees who are able to look at their peers in an entirely different light than [they did] in the late 1970s when I was in government. That's all very good. Does it mean that there are not any problems in the workplace? No, of course not. That is the quest -- to try to overcome. But there are tangible signs that the world is changing."

With that in mind, Knowledge@Wharton and Nightly Business Report collaborated on a project to analyze the benefits of workplace diversity and the costs of discrimination in the U.S. The project included identifying companies, like American Express, that demonstrate a strong and genuine commitment to diversity, interviewing leading diversity experts, including Bernard Anderson, Wharton practice professor of management, on the characteristics of an effective workplace diversity program, and looking at which companies are doing the best at meeting certain standards and why.

The goal is to understand the meaning of workplace diversity and learn from the most effective diversity programs -- even as it is clear that what makes a company truly diverse has become increasingly complicated over the years. Most agree that an effective diversity program is one designed to reduce racial and gender inequality in the American economy. But what is the means to that end? Observers consider a number of elements when measuring companies that are the most successful at fostering workplace diversity.

Commitment from Senior Management

In simplest terms, workplace diversity is variety -- different ethnicities, races and genders represented within a workforce at every level, from the mailroom to the boardroom. Many experts maintain that representation is the backbone of a strong corporate diversity program. Strategic recruitment and retention programs help achieve this goal, with a blended workforce as the end result. "I place representation at the top of the list when it comes to measuring effectiveness," says Anderson, who has done extensive research on workplace diversity. "If the diversity program is not effective in producing a diverse racial, gender, ethnic workforce, then it's not worth the paper it's written on."

While representation is an important measure, it should not be the only measure, say Anderson and many of his colleagues around the country. Roosevelt Thomas, president of R. Thomas Consulting & Training in Decatur, Ga., is a diversity expert and author of several books on the topic, including his latest, Building a House for Diversity. Thomas has developed a process to help companies integrate workplace diversity into their vision, strategy and objectives. The bottom line is this: Companies need to look beyond representation and begin seeing workplace diversity as something much richer and all-encompassing. "I feel that diversity is essentially stuck, primarily on representation and relationships," says Thomas. "Most corporations are just beginning to think about workplace diversity in the non-representation sense. I'm not advocating that representation should be ignored; I'm arguing that you need representation, plus. I think we need to go to the next level, which involves learning how to empower this workplace diversity through quality decisions and strategic diversity management."

For this kind of company-wide integration, a devotion to workplace diversity must begin at the top, suggests Gil Casellas, an attorney with Mintz Levin in Washington, D.C., who served as chairman of the Equal Employment Opportunity Commission for three years in the Clinton administration and has been a corporate diversity enforcer in many other roles. Casellas joined Mintz Levin five months ago when he was cherry-picked along with several others to form a team of senior-level minority lawyers to focus on workplace diversity. Casellas and his colleagues developed a diversity audit, which has the rigor of a financial audit, to evaluate diversity policies within companies.

"I think the first key element is a clearly stated commitment from senior leadership," says Casellas. "The question is, how do you integrate workplace diversity into what you do and how your business makes money? The business case for workplace diversity has to be made clear. Then there should be tangible, actionable goals, accountability and oversight by senior leadership. Compensation should, in part, be determined by success with workplace diversity. There should be ongoing commitment of training and education and regular communications around the strategy. I would consider those to be the major elements of a workplace diversity plan. Inside each one of those elements there are various components. What really counts to make it sustained and institutionalized is that it gets integrated into everything you do, baked in, so to speak."

Once workplace diversity is tied to business needs, adds Nancy DiTomaso, a professor of management and global business at Rutgers Business School in New Brunswick and Newark, N.J., it needs to be "sufficiently inclusive to build alliances and bridges, rather than create disruption and discord."

And while the focus must be on building successful workplace diversity practices within, companies need to remember that their desire for diversity is in essence an attempt to mirror the differences within society. Therefore, says Anderson, companies with effective diversity programs must stay in touch with the outside world. "A diversity program should contribute in a positive way to the economic advancement of the community or communities in which the company is located in order to contribute to the development of the workforce and the quality of life of the people who live there. Along with that should be purchasing programs where companies make a special effort to reach out and make purchasing agreements with minority and women-owned businesses."

PepsiCo Sets the Bar

In general, most of the experts feel that only a few companies are meeting these workplace diversity standards. "Some meet them to different degrees in different parts of the company," says Anderson. Adds Casellas: "In the course of the last few months as our team of lawyers has visited companies, we have found that they are all in various stages. It's surprising that some folks are so far ahead and others are still grappling with even establishing a policy."

That said, many companies are known for their commitment to corporate diversity. As a first step in identifying U.S. companies with effective corporate diversity programs, Knowledge@Wharton compared and contrasted some of the top magazine lists that annually recognize successful companies in this area, including Fortune, Black Enterprise and Hispanic Magazine, then identified companies that appeared on all lists and finally, turned to diversity experts to help choose the standouts.

Some of the names that most often rise to the surface include Nordstrom, Verizon Communications, Yum! Brands, General Motors, Bank of America, CitiGroup, Prudential Financial, Goldman Sachs, IBM, PG&E, MGM Mirage, SBC Communications, Coca-Cola, PepsiCo, Denny's, UPS and Xerox. Others are McDonald's, Eastman Kodak, Starwoods, Pitney Bowes, Fannie Mae, Darden Restaurants, Coors and Procter & Gamble.

PepsiCo is an oft-mentioned name in relation to workplace diversity these days, which makes for an interesting comparison with its number one rival, Coca-Cola, also a usual suspect on the diversity radar. PepsiCo CEO Steven Reinemund is said to be the most regular vocal advocate of workplace diversity. Everywhere he goes, whether it is to internal meetings and external meetings or meetings with analysts, he raises the issue of workplace diversity.

Casellas, who lists PepsiCo among his top three companies with effective programs, is in an interesting position to comment on PepsiCo's policies in relation to Coca-Cola. Four years ago, as a result of a $200 million discrimination settlement, Coca-Cola was required by the court to set up an outside task force to monitor the progress of its diversity program. Casellas sits on that task force, which will be in place for one more year. "Coca-Cola is a turnaround, but still a work in progress," he notes. PepsiCo, on the other hand, "voluntarily established its own diversity advisory forums to monitor its progress with African Americans and the Hispanic community. The senior leadership at PepsiCo has a clearly expressed commitment, with its diversity policies all over the website and corporate documents. It has a board of directors that is itself diverse and a senior leadership team that is diverse. It has a diversity plan that is integrated into the business plan." Five of PepsiCo's 13 top officers are minorities -- one of the highest percentages among large corporations.

Representation from the top down raises many companies to superstar diversity status. Both Verizon Communications of New York City and Xerox of Stamford, Conn., for example, are among those corporations lauded repeatedly for bringing talented people of color into the senior management ranks. At Verizon, a $71 billion telecom company, minorities now reportedly make up 25% of the board and nearly one-third of the workforce. Among the 271 senior management positions, 50 are filled by ethnic minorities, 25 of whom are African Americans. And of 11 board members, Verizon has three who are ethnic minorities, including two African Americans. Fortune magazine's 2005 list of the "50 Best Companies for Minorities" mentioned that a fifth of Xerox's 50 top-paid employees are minorities.

A handful of companies has been able to improve past poor workplace diversity performance. The names that are mentioned most often as turnarounds include Coca-Cola and Denny's, which, like Coca-Cola, has become more sensitive to corporate diversity in response to a discrimination lawsuit. According to its 2005 listing in Fortune, nearly half of Denny's 1,011 franchises are owned by minorities, 255 of them by Asian Indians, while one-third of restaurant managers and one-fifth of executives are also drawn from the diner chain's minority ranks. Still, some believe that Denny's still has work to do. "Denny's has turned around, but with respect to the depth and breadth and stability of its programs, it hasn't turned around enough," says Anderson. The company changed "in response to a rather prominent and visible legal action, but when you look at what it has been able to do and how much progress it has been able to make, I would assign Denny's less credit than others." Even so, since 2001, Denny's has remained near the top of Fortune magazine's "Best Companies for Minorities" list.

Anderson prefers to spotlight what he sees as successful turnarounds at MGM Mirage and SBC Communications. MGM Mirage, a Las Vegas-based hotel and casino company, declared in 2000 that workplace diversity was a critical business imperative. CEO J. Terrence Lanni says that he believes workplace diversity provides measurable benefits to the company. That philosophy and attitude now permeate all aspects of the organization, says Anderson. "MGM Mirage has done better because of the presence of a new CEO who had a sense of fairness and of what is right for the company. He [felt] that the company ought to be doing better in a variety of ways and could do better without jeopardizing the economic interests of the company."

That same top-down commitment defines SBC Communications' diversity turnaround, suggests Anderson, who has studied in-depth the employment practices in the telecommunications industry. SBC, which closed its acquisition of AT&T on November 18, 2005, to become AT&T Inc., reportedly understands that to be able to compete successfully it needs a diverse workforce that can communicate with customers of many different cultures and experiences. Says Anderson: "CEO Edward Whitacre Jr., when he was coming up through the ranks of the company, had worked with a young African-American attorney in the legal department. When Whitacre became CEO, he made this lower-ranked executive the company's general counsel and gave him the responsibility to develop a corporation-wide diversity program. As a result of that, that company became one of the most successful in diversifying its workforce." For example, the company's employee-initiated group HACEMOS (the Hispanic Association of Communications Employees of SBC), has started an initiative that will link thousands of students across the country via satellite for High Technology Day, which educates students about technology careers.

Much progress has been made in the area of corporate diversity -- and much still needs to be done, experts say. They also note that it's important to consider corporate diversity in the greater context: The benefits of equalizing opportunity, through such policies as diversity recruitment and retention and even the controversial affirmative action, which lowers the credentials bar, work toward establishing a U.S. economy that remains relevant and vital. Workforce development and economic development are interchangeable.

"We are in a labor market where more and more emphasis is placed on cognitive skills and education-based skills, the changing economy," explains Harry Holzer, a labor economist who is a professor of public policy at Georgetown University. "Minorities and especially African Americans lag behind in those measures for a whole bunch of different reasons, but largely because they haven't had the opportunities to develop those same skills. Equalize opportunity for those people to prove their capabilities. I think the benefits go beyond just the individuals themselves who are getting hired and promoted. You build networks that help other people get hired, you develop mentors and role models to help the next generation and it helps the companies themselves."

The cost of discrimination? "What gets sacrificed," says Holzer, "is a very simple notion of fairness and justice."

Source : Knowledge@Wharton

The Workplace: Profiting from Diversity

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By Ivar Ekman

STOCKHOLM: Johan Talenti, a 43-year-old Swedish entrepreneur, says he does not see himself as a do-gooder or activist.

"You don't run a company for the sake of taking social responsibility," he said, sitting in the offices of Silentium, a fast-growing telemarketing company that he founded in 1998. "You do it to make money."

But he has also done something that he thinks many more business leaders should do: He has made a conscious effort to diversify his staff. And, he said, the results have contributed to Silentium's success.

This might not sound unusual, especially from an American perspective. In the United States, promoting workplace diversity has been part of business planning for years. Many big companies even have a chief diversity officer. But in Sweden, as in much of Europe, this has simply not been the case.

When Silentium first started, Talenti said he threw out applications from people with Middle Eastern names (most immigrants in Sweden come from countries like Iraq, Iran and Turkey), thinking that since the company's business was the spoken word - sales of banking services and insurance over the phone - an accented Swedish was a no-no.

But the company started showing the strains of quick growth, and recruitment became a problem.

When a new human resources manager suggested that in Sweden - a country where the Organization for Economic Cooperation and Development says more than 12 percent of the population is foreign-born, similar to the United States and Germany, and more than both France and Britain - an immigrant's accent was just one dialect among others, Talenti decided to throw the dice.

He has not looked back. By opening up to nonnatives, Silentium found a big pool of highly motivated workers, and quickly discovered that their accent was not a problem at all. Today, as many as 40 percent of the work force at some Silentium call centers have immigrant backgrounds.

"We don't measure it systematically, but the feeling among my managers is that the employees with immigrant backgrounds push harder," Talenti said.

Despite the fact that most immigrants to Sweden have comparatively high education levels, only 54 percent of immigrants are part of the work force, compared with 80 percent for native Swedes.

This, experts say, is a potential problem for society as well as the would-be workers, as a large resource goes untapped and as alienation may set in among the unemployed, especially in later generations. But it also may be a problem for Swedish companies, especially in these days of fierce global competition.

"Recruiting the best talent with the highest competence is more important than ever, and to be able to do so Swedish companies must look beyond ethnicity," said Farboud Rezania, a researcher at the Confederation of Swedish Enterprise, himself with Iranian roots. "Those who manage to get new and old values and cultures to fit under the same roof are the ones who will win."

So far, Rezania said, Swedish companies have had limited success.

He points to what happened after the EU expansion in May 2004 as a warning signal. Sweden, Britain and Ireland were the only countries that did not enforce restriction of movement for migrant workers from the new EU entrants. While hundreds of thousands of Poles, Lithuanians, Latvians and Estonians went to Britain and Ireland, only about 20,000 went to Sweden in the first two years.

Part of the explanation obviously lies in language; more people know English than Swedish, and thus have an easier time finding a job there.

But Rezania and other researchers also say that Sweden has an attitude problem, where an immigrant is always seen firstly as an immigrant.

The solution, they say, is partly in the hand of European governments which need to allow immigrants to move more quickly into the work force and provide better language training.

But it is also very much in the hands of employers. Like Silentium, many more must learn not only to see the hurdles, but also the opportunities; realizing that immigrants have particular skills, like language, and also often a very strong will to succeed.

Talenti said businesses must learn to adapt their organizations to deal with the challenges that come with a more diverse workplace. After opening up the recruitment process, Silentium then went on to allow some new immigrant hires to reach the management level of the company.

Talenti said he also realized that he had to communicate in a much more straightforward manner when talking to a work force with a diverse cultural background.

Rezania said he was encouraged by signs that big employers beyond fields like telemarketing and fast food are now aware of the issue and are looking to refine their organizations.

"Before, it was hard for both society and businesses to accept that you could be called Hassan and be a trained economist," he said. "But these things are beginning to change."

Source : International Herald Tribune

Workplace Diversity Watch

Most Admired Companies: Minority Professional Choice Survey Offers Insight into Workplace Diversity Planning

By Tyrone D. Taborn

Last year we published one of the most comprehensive surveys in our publishing history. The survey captured how minority professionals felt about workplace diversity programs. We had seen a lot of other “best workplace diversity employers” lists published elsewhere, but it seemed that these other lists focused largely on surface workplace diversity factors: the number of minorities hired, corporate contributions to social and community efforts to advance minorities, minority board member representation, and supplier diversity efforts.

While that information certainly revealed a great deal about corporate America’s progress since the Civil Rights Act of 1964, it did not quite tell us which companies were dealing with issues arising out of an increasingly diverse workplace: workplace conflict, lack of professional recognition amongst women and people of color, minority leadership development, and minority retention.

Today, changing demographics make achieving workplace diversity relatively easy. However, nurturing productivity, innovation, and harmony in that workplace is another matter. We wanted another look at the work experiences, values, and dreams of minority employees themselves, so we asked them a few questions: Are they pleased with their employers’ workplace diversity programs? How have these programs impacted the minority professional in the workplace? What are their views on workplace diversity efforts?

When we conducted this survey last year, we had only seen two other surveys that answered these questions. One was conducted by this organization more than 10 years ago, and the second was conducted several years ago in partnership with the Information Technology Association of America. Since our survey of last year, we have not seen another one that is as comprehensive.

With this year’s survey, we again wanted to add something that was missing from the discussion¯a gut check on the key issues for minority professionals themselves. We believe that the results will either give workplace diversity champions new insight about the thinking of minority professionals, or it will affirm and document what they already know. Either way, this investigation will be invaluable in workplace diversity planning.

Methodology

Last year’s survey so impressed Raytheon’s CEO that he emailed it to key staff members. We tried to do even better this year. Texas Instruments’ vice president called this year’s survey very comprehensive. The new study’s methodology replicated last year’s. To conduct such a comprehensive study, an online survey consisting of 64 questions was e-mailed to Hispanic, Native American, Asian, Black, and other minority professionals in the fields of science, engineering, and information technology. A few surveys were also e-mailed to a sample group of non-technical professionals. Ninety percent of the non-technical group’s respondents identified themselves as members of an under-represented ethnic group.

Subjects were given 30 days to complete the survey, after which time, online access was deactivated. Additionally, polling software and human review deleted duplicate submissions by checking IP and e-mail addresses. As an incentive, respondents were offered a subscription to a Career Communications Group publication of their choosing and were entered to win a vacation in Jamaica.

Within two weeks of sending the survey, we received 323 submissions from minority respondents. To ensure privacy and anonymity, respondents were provided with an e-mail address to use for their gift fulfillment.

All of the results come directly from the minority professional employees. Absolutely no employer data or participation was knowingly used in the preparation of the survey results.

Respondent Demographics

The professionals who took part in this year’s survey had profiles nearly identical to last year’s participants. They came from industry. In fact, 108 companies were represented.

Again, women responded in large numbers. Females, at 64.7 percent, again outnumbered the male respondents, at 35.3 percent.

This year saw an increase in younger professionals and baby boomers. Ninety-seven percent of respondents were over 21 years of age, compared to 90 percent last year. Some 54.8 percent fell in the 31–50 year age bracket, a notable decline from 64 percent last year. However, the percentage of those over 50 years of age increased from 12 percent to 15.6 percent.

Married respondents increased from 48 percent to 50.5 percent, with 73.4 percent of them having 1–3 children, a huge increase over last year’s 56.3 percent with children. The number of divorced respondents, at 10.9 percent, slightly increased from last year’s 9.4 percent. Separations dropped from 1.6 percent to .7 percent. Widowed respondents remained at 0.9 percent.

Occupations

More professionals working in technical, science, engineering, or information technology fields participated in the 2006 survey¯70.8 percent this year compared with 65 percent in 2005. Both last year and this year, 47 percent expressed a wish for retention efforts to be maintained and enhanced.

Information technologists, representing 60 percent of respondents, stay with their employers the longest. Non-technical employees stay the second longest, and only 47.2 percent of engineers had been with their employers for more than five years.

Respondents with more than 10 years of experience increased from 44 percent to 46.9 percent this year, and 40.2 percent have held two or three jobs in their respective fields.

Income

The respondents were again solidly middle class, with 52.9 percent earning salaries of $50--99,000, a slight increase over the 52 percent of respondents who were earning this much last year. Engineers fared better than other professionals, with 60.4 percent falling in this income range, 29.2 percent earning $50--74,999, and 31 percent in the $75--99,999 income range; there was a slight drop from last year, when 62.2 percent earned $50--74,999 and 31.1 percent earned $50-99,999.

The real surprise was in the number of non-technical professionals entering the $100--149,000 income bracket. Last year, almost 16 percent of responding engineers and 4 percent of the non-technical respondents were in that salary range. This year, 13 percent of the non-technical respondents and 18.8 percent of the engineers earned $100--149,000.

Education

The survey respondents value and invest in education. Last year, 41 percent had pursued additional certification and education beyond undergraduate studies. This year, the survey only captured degreed education, and the numbers were still impressive.

Some 31.3 percent of all respondents have a master’s degree, with 4.5 percent holding a doctorate. Another 46.8 percent plan to pursue an advanced degree. Among the engineers, 40.3 percent have a master’s degree, and 4.9 percent have a doctorate.

The percent of respondents who had attended a Hispanic Serving Institution decreased from 2.1 to 0 percent; however, 7.7 percent of the Hispanic engineers in this survey had attended a Historically Black College or University (HBCU).

The HBCU engineering colleges continue to be critical in pipeline development. Engineers attending HBCUs increased to 39.9 percent, whereas last year, only 39.6 percent of responding engineers attended an HBCU. Some 26.2 percent of non-technical employees attended an HBCU in 2005, but this year, only 15 percent had attended an HBCU.

Summary: The responses increased from the two ends of the spectrum: younger workers and baby boomers. Respondents were middle class, and most had children in the household. They valued continuing education.

More Companies Embrace Workplace Diversity

Companies are moving beyond simply acquiring a diverse work force and calling it quits: Our survey shows that many employers are successfully managing, embracing, and cultivating a diverse work environment. Minority employees give their employers improved marks on managing workplace diversity and on being fair. Some 67.1 percent rated their companies' workplace diversity programs as good to excellent, whereas only 60 percent of respondents gave their companies this score last year. Also, 57 percent of the respondents feel that minority engineers and scientists are adequately represented at their companies.

In promotions, 69 percent of respondents said that their companies were fair to minorities, and 72 percent agreed that their employers were fair in setting salaries.. When it came to assignment of leadership positions, only 60 percent of all the respondents felt the company was fair. This may reflect the make-up of the work force. Although women and people of color make up 30 percent of the middle managers and about 63 percent of the work force, they hold only 5 percent of the top managerial positions. White men held nearly 95 percent of those jobs in 2000. These results suggest that organizations must increase their efforts in leadership development for women and people of color.

Last year, 75 percent of responding minority engineers felt that employers were fair in promotions, 79 percent said their employers were fair when it came to salary, and 82 percent said their employers were fair in assigning leadership roles. The non-technical group's results for these same questions were 54, 59, and 56 percent, respectively. This year, the numbers have declined. Only 66 percent of respondents felt their employers were fair in promotions, 72 percent said their employers were fair about salary, and 60 percent said their employers were fair when it came to leadership assignments.

Still, overall, survey results indicate that minority professionals feel their employers’ workplace diversity efforts are working. That should be welcome news for companies who are moving beyond the melting pot concept, and are instead valuing employees for the diverse strengths and viewpoints they bring to the organization.

A Sense of Belonging

Many employees said their employers had programs in place that created a sense of belonging. The majority of respondents felt that their employers valued their input on workplace diversity-related issues.

Formal programs for minority and women recruitment, employee networks, or affinity groups were in place at 66.8 percent of the respondents' companies. Some 85.3 percent of respondents work for organizations with a clearly stated workplace diversity policy, and 68.7 percent reported cultural awareness training at their companies. Some 88.5 percent of employees said their employers had a confidential process for employees to report gender or racial discrimination concerns. Moreover, 81.5 percent said their companies sought their input in diversity recruitment, and 70 percent said their ideas on workplace diversity were solicited.

The survey results indicate that many of the nation’s employers are moving in the right direction on workplace diversity issues. Yet respondents felt that there was still much to be done. For example, nearly 57 percent felt that minorities were not adequately represented in the engineering or scientific positions at their workplaces. Only 73.9 percent of the engineers indicated that a formal mentoring program existed at their companies. And 26 percent of the engineers said that their organizations did not have a formal recruitment program to reach women and minorities.

Summary: Highly skilled workers of both genders value their companies’ workplace diversity efforts and participate in those efforts in higher numbers than non-technical employees. Non-technical minority women cite employer inequity more frequently than other groups.

Linking Professional Development and Minority Retention

Recruiting women and minorities, only to see them walk out of the door within a few years is a loss of training investments and a loss of opportunity. Retaining promising employees is just as important as recruiting them.

The survey respondents clearly state that their employers are "getting it" when it comes to retention and professional development. Last year, only 33.3 percent reported mentoring programs; this year, 40 percent of respondents said that these types of programs were in place at their companies. Also, 65 percent said their employers supported them in continuing education programs, and 82.2 percent said they would recommend a position in their current field to youth.

Respondents reported several factors that influenced them when they chose their places of employment, and these factors may help companies develop new or more effective retention strategies. Professional development was a leading factor in job consideration. The ethics of the company was the second most important factor. Learning opportunities and security were third and fourth. Job security also made it onto this year’s list. If women and minorities are made to feel that they have a fair opportunity in leadership positions, they may be more likely to stay.

Meeting the Global Challenge

Other countries are increasingly challenging the United States' standing as the world's technological leader. Together, India and China graduate nearly ten times more engineers than the 72,000 who graduate from U.S. schools. Over the last year, more U.S. leaders have warned that if our country does not increase our science, engineering, and technology work force, the United States risks becoming a second-class nation. But there is much we can learn about designing programs to increase minority participation in science from this year’s survey.

Minority engineers said that passion, income, and growing opportunities were the top three factors that led them into engineering. Minority engineers are very optimistic about the opportunities for engineers. Some 91 percent of the engineering respondents think that career opportunities will increase or remain stable, and 87.2 percent of the engineers said they would recommend an engineering career to children.

Timing played a critical role in the respondents’ decision to enter the field. Almost half of them---46.6 percent---decided on engineering between the ages of 12 and 18. Nearly two-thirds, or 73.6 percent, made the decision between age 12 and 21.

The decision-making process occurred much later for those not pursuing engineering. A surprising 52.4 percent of non-technical professionals made their career choice after they turned 22.

Pre-college and pre-engineering programs and events also factored into the engineers' career choice. Some 56.1 percent of the engineering respondents participated in these programs. In contrast, 74.2 percent of non-technical professionals did not participate in pre-college or pre-engineering programs or events.

Based on these numbers, it seems clear that increasing the number of minorities entering engineering requires an ongoing, comprehensive campaign. Such a campaign should create passion about the field by exposing young people to the fun side of engineering through field trips, technical conferences, pre-college programs, technology events, and interaction with professional engineers.

Family members also played a role in helping survey respondents select engineering. About 25 percent cited a family member as a key influencer, 21.4 percent credited a role model in the field, and 20.5 percent cited an advisor.

Role models---even if they were not engineers---played as great of a role as engineering role models in motivating students. Reaching family members and advisors with career information is critical, especially for under-represented minority groups, as there are fewer minority engineers in the community.

Lack of Formal and Informal Mentoring

Formal and informal mentoring opportunities are less available to women and people of color in the workplace. Some 92 percent attended professional development conferences like Black Engineer of the Year and Women of Color in Technology to help fill that void. At those conferences, 70 percent view the networking sessions as being very important.

Key Factors

The 2006 survey again reveals the similarities in career issues that all professionals share. What is unique among minorities and women is their perception of career limitation.

Employers should consider the work force conflicts that can be caused when policies, promotions, and decisions appear to be unfairly assigned. These conflicts may increase as people of color near the upper levels of the company and find barriers to advancement.

Shifting demographics favoring women and minorities will allow most companies to achieve some level of workplace diversity. Including them at all levels of the company is another issue.

If employers want their fair share of top employees, this survey underscores the importance of being viewed as an organization that fosters growth, opportunity, and professional development.

Last year we wrote, “corporate diversity programs are now the norm in many workplaces. Therefore, employers who do not have these programs or fail to execute them well are at a disadvantage. Because they are common, though, it is important that the programs not become static, and that employers continuously seek innovative ways to refresh the programs and reiterate the value proposition.”

This statement is just as relevant today as it was a year ago.

Most Admired Companies Rank

IBM 1
Lockheed Martin Corporation 2
Microsoft Corporation 3
Cisco Systems Inc. 4
Intel Corporation 5
Dell Inc. 6
NASA Headquarters 7
Johnson & Johnson 8
Booz Allen Hamilton 9
General Electric Company 9
Raytheon Company 10
The Walt Disney Company 11
Hewlett-Packard Company 12
Texas Instruments Inc. 13
AT&T 14
The Boeing Company 14
The Coca-Cola Company 14
Northrop Grumman Corporation 15
Fannie Mae 16
DaimlerChrysler Corporation 17
Lockheed Martin Aeronautical Systems 18
American Express Company 19
Motorola Inc. 19
Verizon Communications Inc. 19
Bank of America Corporation 20
Sun Microsystems Inc. 21
FedEx Corporation 21
General Motors Corporation 21
EDS Corporation 21
Citigroup Inc. 22
Pfizer Inc. 23
Abbott Laboratories 24
Computer Sciences Corporation 24
Mercedes Benz 24
Exxon Mobil Corporation 25
Wal-Mart Stores Inc. 25
Time Warner Inc. 25
The Home Depot Inc. 26
General Dynamics Corporation 27
The Procter & Gamble Company 27
PepsiCo Inc. 28
Comcast Corporation 29
Target Corporation 29
U.S. Army Corps of Engineers 29
Bristol-Myers Squibb Company 30
Merck & Company Inc. 30
J.P. Morgan Chase & Company 31
Air Force Research Laboratories 32
Ford Motor Company 32
Honeywell International Inc. 32
J.C. Penney Company Inc. 32
SBC Communications Inc. 32
Georgia-Pacific Corporation 33
Wachovia Corporation 33
Best Buy Company Inc. 34
Costco Wholesale Corporation 34
Goldman Sachs Group Inc. 34
United Parcel Service Inc. 34
Aerotek Inc. 35
Army Research Laboratory 35
BellSouth Corporation 35
Caterpillar Inc. 35
Duke Energy 35
Freescale Semiconductor Inc. 35
Google 35
Gulfstream Aerospace Corporation 35
The MITRE Corporation 35

Source : BlackEngineer.com

Developing an Organizational Change Plan in Workplace Diversity

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by Maggie Finefrock, Director
The Learning Project, Kansas City

PART ONE

The most difficult stage in change processes is not initiating change as many people believe. The most challenging part, and the reason that more organizational change efforts do not work, comes during the persistence stage when the going gets tough and you look around to find out where the tough have gone.

In order to create strategic and long-term change with workplace diversity initiatives, we must develop a long-range plan and be mightily committed to following it to the desired outcomes. Otherwise, like a well-intentioned health or weight loss program begun in January, we may become lost, distracted and out of steam by March. Then we are in danger of a false start and developing some patterns and habits that can make the problem worse. We could gain back the pounds and problems that we lost and they could invite all of their little friends to join them, oh my.

In Part Two of this article, I will frame some steps to create a high-performance culturally diverse learning organization. But first let's play around with five ways to ensure that your diversity plan will NOT work and bigotry, low morale, sluggish performance and litigation will triumph.

HOW TO INSURE A WORKPLACE DIVERSITY PLAN WILL NOT WORK:

1. Allow a hostile environment as the culture of your organization. Develop an adversarial "us vs. them" mentality. Use guilt as a motivating factor. Treat workplace diversity as a black/white issue. Leave out other groups and refer to workplace diversity initiatives as warmed-over affirmative action. Don't dispel the myths that this is just about more special treatment for the squeaky wheels. Dismiss new ideas and complaints as trivial or use them as fodder for jokes about "political correctness." Use the term "reverse discrimination'' to confuse people. Talk about the effects of racism and sexism as individual and not institutional. Make sure that organizational norms against scapegoating do not include white men. After all, if people continue to fight among themselves, they might leave you alone.

2. Remain in denial. Say "We don't have any of those people around here." Assume that because you have not heard any complaints about discrimination, inequity or hostile work conditions that there are none. Assume when you do hear rumblings that people are being "way too sensitive" and should leave the personal stuff at home. Invent history and deny that special rights and privileges have been given to certain groups and legally denied others. After all, the injustices of the past have been rectified with the 1964 Civil Rights Act, eh?

3. Value conformity. Be relieved that the more people like you that you hire and have as clients, the less energy you will have to expend in dealing with differences. Work to increase your team's adherence to your work and communication style, and maintain your authoritarian leadership methods. Make your team motto something like, "There is one right way to do things." Buy stock in a competing agency because they will get all the clients/customers/employees/applicants that you are not serving and you will need a reserve fund for the near future when you are out of a job.

4. Don't link workplace diversity to the bottom line. Treat issues of race, gender, age, religion, sexual orientation, abilities and disabilities, economic class, etc., as "soft" issues that are not pertinent to the success of the organization. Do not embed your workplace diversity plan in the main business plan and strategy. Treat it as peripheral, something for personnel to "fix." Don't have an expressed and communicated vision, values and mission for the organization that values people as your greatest resource. Appease employees and lawyers with a little "workplace diversity awareness training" now and then so you can look like you are doing something and can justify your own racism/sexism.

5. Wait until you have a major problem to begin change. Continue management by chaos and shooting from the hip. Don't give in to those clich├ęs like "The cost of doing nothing is already too high" and "No one likes change except a wet baby." Wait for the forces of entropy and change to run your organization out of control while you worship the status quo. Planned change is, after all, messy and expensive sometimes. Healing may hurt. Proactive management and planning, democratic decision making and creating a diverse environment of respect and high productivity are just fads anyway. If you hold your breath long enough they will go away. Think of settling legitimate lawsuits as just one of the tools of organizational life. Try to patch over the problems with yet more training for the underlings and, oh yes, you'll need to form some committees.

6. Your turn. This is an audience participation article. You have got the idea now. Add some fun lessons of your own.

PART TWO

Don't you just hate it when people keep framing the workplace diversity issue over and over again, telling you all about what's wrong and never giving you any semblance of solutions? Here are some steps in a change process that have worked for some. These and the aforementioned items are at least worth arguing about (an important diversity skill).

1. THE WHAT: Include valuing of workplace diversity as a critical part of the mission, purpose, vision, values and daily strategy of the organization. This value should permeate every aspect of the organization---hiring, firing, policies, architecture, design, location, projects undertaken, clients and customers, promotions, celebrations, incentives, budget, compensation, marketing, management styles, training, deadlines, strategic planning, families, recruiting, retention, meetings, action planning, performance appraisals, investments, etc., in an aligned (not maligned) system. Define workplace diversity and don't assume you are all talking about the same animal. Challenge the assumptions of the old wine skins. Create dissatisfaction with the parts of the status quo that are not working to benefit all people.

2. THE WHO: Develop a workplace diversity strategy team to guide the change process for the next three to five years. It will take a committed and diverse group of leaders from all levels of the organization to drive this process to completion. They will decide direction, be advocates for change and workplace diversity, listen, monitor, evaluate and adjust the plan. Start the workplace diversity strategy team on learning and training plan for diversity. The goal is to be a high-achieving and culturally diverse learning organization. All members in the organization must be committed to continuous learning. There is no final destination in change but another horizon and another.

3. THE WHY: Determine where you are starting and where you want to end up. Develop the business case for why you are embarking upon this fruitful journey. Get consensus on what has been accomplished so far, what the short- and long-range outcomes will be, success indicators, ways to celebrate successes and how to develop a purpose statement. Conduct a workplace diversity audit of the entire organization by surveys, focus groups, interviews, data, etc. Solicit as much feedback as you can from employees and clients to determine the baseline of where you are starting and the goals and objectives people need to experience success.

4. THE WHERE: After the data gathering is completed, analyze it carefully with the workplace diversity strategy team and develop an action plan. Translate your vision into agendas of where you want to go. Invest time listening to the responses of all constituents. Spend time mushing around in the data to determine current realities and future dreams of one, three, five, 10 and 20 years. Tie it into the overall strategic organizational plan. Be creative in writing out a detailed action plan. State action steps, rationale, people in charge of making it happen, deadlines to meet, necessary resources and inevitable obstacles. Include every aspect of the organization but prioritize into what can be accomplished in a realistic time frame. Make sure it is aligned with your mission, vision and values. Contrary to popular belief, planning does not have to be dreary. It should be fun and energizing.

5. THE HOW: Start acting. Just do it. Implement your diversity action plan. Remember that you will be evaluated by others on outcomes that you achieve and not just good intentions. Start. Yes, you will be smarter tomorrow and your plan will change. Just remain in a learning mode and each step will lead to the next. Even apparently wrong steps will lead you to great insights. Continue to mobilize commitment to change. Create a shared vision of how things can be better throughout the organization. Give yourselves credit for what you are already doing as long as it does not put you to sleep. Build consensus, competence and cohesion. Conduct the necessary dialogues, training and education. Communicate agendas so that others will want to buy in. Without mandating, encourage creativity. Establish a learning community around the issues of workplace diversity and encourage a creative problem-solving mode. Celebrate small successes and keep moving, reflecting, adjusting and changing. The key is to create a healthy and productive system that removes prior discrimination without excluding anyone. Place high value on your sense of humor and your ability to fall.

6. THE NOW WHAT? Persist, persist, persist until the diversity action plan is accomplished and exceeded. This is the toughest part. Discouragement and impatience can creep in. Your baseline conditions were not developed in six months, so don't expect them to be eradicated in that amount of time or double that time. Some change, like the integration of the armed forces, is fast and overnight. Other change, like the years of policy discussions leading up to Truman's mandate and the subsequent adjustments in the 50 years after, are slower and evolutionary. You should come up against resistance. That is a sign that your change process is working. Take a non-defensive attitude and use the resistance to educate yourself and give you feedback. If something is not working well across the board, don't do it that way anymore. If you are paying conscious attention, you will find a better way to meet important goals. This is why you have a strategy team in this process. Use them. Individual change agents playing Lone Ranger can burn out without a support and tag team. The only rule is to keep learning and persist. This is a developmental process. Continually ask, "Are we getting better? Are we having fun yet? Is this the way to San Jose? (or wherever you have aimed to go)"

7. THE SO WHAT? The end result of all your hard work is a high-achieving diverse learning organization. In this discrimination-free workplace, all obstacles are removed that will keep any associate or client/customer from reaching their full potential. You are using close to 100 percent of your resources. There is a climate of trust, collaboration, productivity, innovation, shared power, healthy humor and creativity. You finally understand how "the whole is greater than the sum of its parts" applies to organizational life. Barriers are removed and systems are in place for continuous learning and change. There are improvements in profits, products and people. The effects and results of your organization are influencing the entire community through employees' families and increasingly diverse and satisfied consumers of your services. Your model is being noticed and used in the community and beyond. Besides, through all this you and your colleagues are experiencing more harmony and energy and a lot more fun. You notice that this exists even when conflicts occur and the work is hard.

You have accomplished the breakthrough of a paradigm of separateness that has been dominant for centuries and has been holding back the progress of civilization. Someday ultimate success will be measured not by how many toys one can accumulate in a lifetime, but by how successful one is in ending oppression in any form. Congratulations for whatever stage you are in on this journey. Ain't gonna let nobody turn me around, turn me around, turn me around. We make the road by walking.

About the Author

Maggie Finefrock is director of The Learning Project in Kansas City. If you want to add to and/or argue with these points, please contact her at 2615 Martha Truman Road, Kansas City, MO 64137.

maggie@thelearningproject.com

Workplace Diversity : Leveraging the Power of Difference for Competitive Advantage

9 responses

By Nancy R. Lockwood, SPHR, GPHR, HR Content Expert

"Diversity represents a company's fundamental attitude that it not only respects and values the individuality of its employees but also understands how to tap the potentially significant contributions inherent in diversity." - Alexandra Groess, Allianz Group's International Diversity Project

Workplace Diversity - An Evolution

From compliance to inclusion, the concept of workplace diversity is evolving. Coming from an organizational viewpoint, this article explores the changing perception of workplace diversity, elements of an inclusive corporate culture, the business case and HR's leadership role to maximize the benefits of a diverse workforceworkplace diversity is not strictly a U.S. concept: a brief discussion on the drivers of in a changing marketplace. While a broad range of issues is covered, it should be noted that "one size does not fit all," as organizations are in different stages of development regarding workplace diversity. In addition, workplace diversity in the European Union is presented.

Diversity Defined Today

As predicted in the landmark study Workforce 2020, rapid technological change, globalization, the demand for skills and education, an aging workforce and greater ethnic diversification in the labor market have forever changed the employment landscape. The definition of diversity extends well beyond the traditional view that once focused primarily on gender and race and reflects the broader perspective of workplace diversity today.

"A broad definition of diversity ranges from personality and work style to all of the visible dimensions such as race, age, ethnicity or gender, to secondary influences such as religion, socioeconomics and education, to work diversities such as management and union, functional level and classification or proximity/distance to headquarters."

Integration and Learning: A New Paradigm for Managing Diversity

Diversity in the United States has evolved since the 1960s. Diversity was first based on the assimilation approach, with everyone being part of the "melting pot." Compliance (e.g., affirmative action, equal employment opportunity) is important in diversity, and key legislation has been an effective tool for change (e.g., Title VII of the Civil Rights Act of 1964, Age Discrimination in Employment Act of 1967, Americans with Disabilities Act of 1990).

Today, however, the impetus behind workplace diversity is that of inclusion and the business case: embracing and leveraging differences for the benefit of the organization. The collaboration of cultures, ideas and different perspectives is now considered an organizational asset-bringing forth greater creativity and innovation-with the result that many companies are increasingly focusing on corporate diversity initiatives to improve organizational performance.

Workplace diversity initiatives do not always meet expectations. The traditional schools of thought behind many diversity interventions are: 1) assimilation, based on the idea that "we're all the same" (promoting equal opportunity); and 2) differentiation, from the philosophy "we celebrate differences." Today, groundbreaking research goes beyond the historical framework of workplace diversity. The emerging paradigm is integration and learning. That is, companies promote equal opportunity and value cultural differences, using the talents of all employees to gain diverse work perspectives. To achieve this level of diversity management, however, organizational leaders must have a clear understanding of how they define diversity as well as what exactly the organization does with the experiences of being a diverse workforce.

An Inclusive Corporate Culture

The concept of inclusion is increasingly important in the discussion of workplace diversity. In many ways, this evolution reflects societal values in the workplace. For example, two beliefs commonly held by Americans are that everyone deserves a chance (equal opportunity, sometimes referred to as the "level playing field") and that all people should be treated with dignity and respect. The values of equality, respect and opportunity for all represent the cornerstone of workplace diversity. Inclusiveness is thus a win-win dynamic: it generates opportunities for growth, flexibility and adaptation in the marketplace for both the employee and the organization.

The Business Case for Workplace Diversity

Increasingly, the case for workplace diversity as a business imperative is gaining recognition by leaders in the business world. At a symposium sponsored by The Conference Board regarding diversity in the workplace, for example, 400 executives agreed that "diversity programs help to ensure the creation, management, valuing and leveraging of a diverse workforce that will lead to organizational effectiveness and sustained competitiveness."

One of the major drivers behind the business case is the demographic changes that directly affect the labor pool and available talent. These changes are significant. In an organization, human capital and workforce relationships are the backbone of success. The flow of information between colleagues, work teams, customers and suppliers, for example, depends on the quality of relationships and talent in the workplace. Consequently, workplace diversity is increasingly viewed as an essential success factor to be competitive in today's marketplace.

Advantages

Six key reasons to tie workplace diversity to organizational strategic goals and objectives are: 1) greater adaptability and flexibility in a rapidly changing marketplace; 2) attracting and retaining the best talent; 3) reducing costs associated with turnover, absenteeism and low productivity; 4) return on investment (ROI) from various initiatives, policies and practices; 5) gaining and keeping greater/new market share (locally and globally) with an expanded diverse customer base; and 6) increased sales and profits. Workplace diversity can be viewed as having both direct and indirect links to the bottom line. In business, the preferred equation for success is a single action that directly impacts financial performance. Workplace diversity, however, is a complex phenomenon. Consequently, the link of workplace diversity to financial success is not always immediately apparent, nor is it always linear. Two examples below illustrate scenarios with direct and indirect links of workplace diversity to organizational performance.

* Direct link: Organizations that expand their customer base most effectively do so with a workforce that is reflective of their clients. DuPont, for example, considers diversity a business imperative vital to ongoing renewal and competitiveness in the 21st century. This philosophy was illustrated when the company learned how one small change could directly translate into significant profits. At DuPont Merck, the sales of an anticoagulant drug in the Hispanic markets were low. When a Hispanic manager noticed that the drug was only labeled in English and consequently translated the instructions into Spanish, sales improved significantly. Now, educational materials for the drug are translated into 15 languages and bring in millions of dollars in new business.
* Indirect link: Having access to and retaining talent from a worldwide diverse labor pool is key to gaining a competitive edge in the global marketplace. To expand and keep their market share, Nortel views lost revenue due to turnover as a reason to support diversity. With the cost of replacing an employee at $55,000 and turnover at 7% (compared to 17% in the information technology industry), the overall turnover cost is still quite high. For example, 7% attrition for 80,000 employees translates to replacing 5,600 people. Thus, when 5,600 (people) is multiplied by $55,000 (the cost of replacing one employee), turnover cost is $30.8 million! Thus, at Nortel, attracting and keeping talent - a key aspect of workplace diversity - has a significant impact on the bottom line.

Firms are increasingly aware of the impact of workplace diversity initiatives on organizational effectiveness. For example, factors that affect organizational profits are highlighted in a study by the Society for Human Resource Management on the impact of workplace diversity on the bottom line. HR professionals from companies on Fortune's list of Top 100 Companies to Work For state that workplace diversity initiatives provide organizations with a competitive advantage by positive improvements in corporate culture, employee morale, retention and recruitment. For example, 40% of companies ensure leadership development programs are available to all employees, 34% increase innovation by tapping talent of employees of all backgrounds, and 31% utilize diverse experiences for special projects and assignments.

The importance of positive community relations also illustrates the link between workplace diversity and the business case. When organizations develop external partnerships with minority communities and suppliers, for example, this can lead to good will and a reputation as an "employer of choice." When employees are proud of their organization for its contributions and connections to the community, they are more loyal to their employer and more likely to boast about their company to family and friends. The result is lower turnover and a positive employer brand that better attracts the best talent in the marketplace. A prime example of diversity partnerships is that of Pitney Bowes, the No. 1 company on the 2004 DiversityInc Top 50 Companies for Diversity list, with recruitment initiatives and partnerships developed with organizations such as the National Urban League and the National Society of Hispanic MBAs. Another example is that of Ford Motor Co., the No. 1 company on the 2003 DiversityInc Top 50 list that made community relations a priority: Ford spent 6% of its total procurement budget ($3.2 billion) with its first-tier diversity suppliers.

Money Talks

The shift in purchasing power in the United States provides further evidence for the business case for workplace diversity. According to the Selig Center for Economic Growth, the purchasing power of minorities in the United States will quickly outpace that of whites in the next five years. In 2009, for example, the combined buying power of African-Americans, Hispanics, Asian-Americans and Native Americans is expected to exceed $1.5 trillion, more than triple the 1990 level by a gain of $1.1 trillion or 242%. In contrast, the buying power of whites will increase by 140%.

Thus, in order to ensure that the company's sales and marketing teams reach the minority groups with funds to purchase its products and services, one of the most effective avenues is to utilize the knowledge of minority employees who can relate to different groups in the marketplace. Verizon Communications, for example, utilizes its African-American spokespeople, such as the actor James Earl Jones, to attract African-American consumers. Fannie Mae, a leading mortgage lending firm, wanted to reach the many minorities who did not yet own homes; in the United States, only 46% of African-Americans and Hispanics own homes, compared with 72% of whites. The company utilized workplace diversity training as a strategic business initiative to reach a segment of the population that could profit from their service. Finally, the SHRM 2004-2005 Workplace Forecast notes that one of the top economic trends is expansion into the global marketplace. Organizations can better capture, keep and serve their international customer base when their own workforce-such as sales, marketing and customer service-understands the needs of other cultural and ethnic groups.

Metrics - the ROI of Diversity

As with all business initiatives, measuring the return on investment of diversity makes good business sense. Measurement of diversity management can be considered in a number of areas, such as organizational culture, demographics, accountability, productivity, growth and profitability. For example, measuring diversity leadership commitment may involve many individual factors, such as the development of diversity vision/mission statements by a specific date, the number of times diversity is mentioned as a strategy in executive presentations, the percentage of board representation by group, the percentage of diverse employees who were promoted due to mentorship and the percentage of workplace diversity strategy plans implemented.

To determine the return on investment, hard and soft data must be converted to monetary values. There are five basic steps: 1) identify a unit of measure that represents a unit of improvement; 2) determine the value of each unit; 3) calculate the change in performance data; 4) determine an annual amount for the change; and 5) calculate the total value of the improvement.

The diversity return on investment (DROI) is calculated by using the diversity initiative cost and benefits to get the benefit/cost ratio (BCR). BCR = diversity initiative benefits ÷ diversity initiative costs. This ratio is also referred to as a cost-to-benefit ratio. Specifically, the DROI calculation is the net benefit of the diversity initiative divided by the initiative costs: DROI% = (net diversity initiative benefits ÷ initiative costs) x 100. This formula is the same basic formula used to evaluate other investments in which the ROI is reported as earnings divided by the investment.

For example, the initial cost of a diversity awareness program may be $50,000. The measurable value of the program is determined to be three years. During a three-year period, the program will have a net savings of $30,000 ($10,000 per year). Since the average book value is approximately half the cost, the average investment in this case is $25,000 ($50,000 ÷ 2). The average ROI = annual savings ÷ average investment: $10,000 ÷ $25,000 = 40%.

Short- or Long-Term Investment

The business advantage for workplace diversity is clear. Yet companies often expect short-term results. The challenge is to demonstrate measurable impact on financial success as well as realistically manage expectations. Rather than a quick fix, the business case for workplace diversity is a long-term investment and offers sustainability in a competitive marketplace.

Senior Management's Role

Visibility, communication and accountability are keys to achieving a competitive diverse workforce. A recent study on what makes and breaks workplace diversity initiatives found three critical points of leadership: 1) accountability; 2) a passion for diversity; and 3) sustained involvement. Visible commitment throughout the organization is important: adding workplace diversity on the agenda at executive meetings and company conferences, appointing diversity candidates to top positions, and assigning clear roles and responsibilities to the senior management team regarding diversity management. Accountability creates sustained involvement-that is, holding managers accountable to deliver diversity results. Participation in diversity councils is recommended as a development path for senior leadership. However, simply placing women and/or minorities in high-profile positions, for example, is insufficient. Rather, the more effective approach is to hold management accountable for results. Consequently, to get middle management and employee buy-in, top management must establish clear implementation and reporting requirements. At DuPont, for example, senior management ensures accountability for diversity management by integrating workplace diversity into the overall business performance evaluation process, including developing cost and profit objectives as well as how compensation is determined. The company also uses targeted career development initiatives to help diverse people fill key work assignments, thus supporting advancement and addressing glass ceiling issues. The Quaker Oats Company aims to keep diversity management simple by using two key tools: 1) the diversity progress menu; and 2) the diversity accountability guidelines. The company's goal is to supply managers with a best practices list that offers flexibility tied to individual business cultures as well as performance.

Nine of the top 50 companies on the 2004 DiversityInc Top 50 Companies for Diversity list tie diversity to managers' compensation. For example, CitiGroup measures its managers' attempts to attract talent and develop a diverse workforce. At Verizon Communications, 5% of bonuses for directors and above are related to workplace diversity. Simple daily actions also communicate commitment to workplace diversity: the CEO greets employees in their native language, and the supervisor takes time to understand direct reports with different cultural values and viewpoints.

Diversity Management and the Board of Directors

Increasingly, the business case for workplace diversity focuses on the board of directors. The impetus to change the board composition is a direct result of the trend toward corporate governance and diversity of the workforce, customer base and other stakeholders. Organizations want a wider range of leadership skills, work styles, perspectives and expertise, as well as increased representation of women and minorities among board directors.

There is positive evidence of change. For example, in the Fortune 500 in 2003, women held 14% of board seats (up from 10% in 1995), and 54 companies had 25% or more women on boards of directors (up from 11% in 1995). Finally, change in board composition is also occurring at an international level, as global organizations expand the cultural diversity of their boards with expertise in international business from other countries.

Managing Workplace Diversity: HR Challenges and Opportunities

With the changing marketplace and an increasingly diverse labor pool, HR leaders are dealing with a myriad of factors regarding diversity management. Broadly speaking, workplace diversity challenges can be considered within three interrelated categories: attracting and retaining talent, greater diversity among employees and training.

Attracting and Retaining Talent

Competition for talent is growing-from competition abroad, lower education levels of U.S. workers compared with other countries, U.S. immigration challenges and fear of terrorism in the United States. Further, with the retirement of the baby boom generation (those born from 1944 to 1960) in the next 10 years, a key concern is retention of older workers. Organizations are in different stages of preparation regarding this likely loss of talent. As of 2003, 35% were just becoming aware of the issue, 35% did not know if their organizations were ready, 23% were beginning to examine policies, and 4% had proposed specific changes. Many HR leaders are looking for ways to attract and retain older workers. Benefits and workplace programs, such as reward initiatives and flexible work arrangements (e.g., part-time work, phased retirement), are key tools that offer attractive options to older workers.

The skill shortage, however, will hit some industries harder and sooner than others. The nuclear power industry, for example, faces replacing as much as 50% of its workforce. The talent crunch will also strike the expanding service industry: sales positions in the United States, for example, are expected to increase by 25%, yet many in today's sales force are aged 55 or older. A recent study notes most firms are not paying close attention to retention and promotion strategies. For example, top minority talent is seeking leadership opportunities; yet companies indicate they have difficulty attracting talent for executive leadership (42%) and professional and technical skills (42%). In corporate America, the "revolving door syndrome" is particularly evident for women and minorities. To retain women and minorities, HR professionals should re-evaluate their organization regarding talent, mentoring, career development and succession planning. Strategic initiatives, such as mentoring, on-boarding and "listening" forums, are additional tactics to address minority retention.

Greater Diversity Among Employees

The term "diversity" has typically referred to women and minorities. Today, however, employers are beginning to formally acknowledge other employees as well (e.g., ethnic groups, people with disabilities and self-identified gay, lesbian and bisexual persons). Some firms encourage a welcoming and inclusive environment for all employees by creating diversity network groups. Kraft Foods uses employee councils to build employee development. Through nine employee councils (African-American Council, Hispanic Council, Asian-American Council, Rainbow Council, Women in Sales Council, Black Sales Council, Hispanic/Asian Sales Council, Women in Operations and African-Americans in Operations), Kraft takes an active role in mentoring and supporting its diverse workforce. For example, the company builds relationships with universities to bring in talent through internships and internally sponsors career days focusing on leadership competencies.

Different groups have different needs, and they want their needs recognized and met. Acknowledgment of different needs yields greater employee satisfaction, employer loyalty and, in turn, lower turnover and greater productivity. As a result, more organizations offer programs to address issues such as work/life balance and demands for more flexibility with telecommuting, adoption support, flexible health and dependent care spending accounts, elder care and domestic partner benefits. Within workplace diversity, one of the least discussed minority groups is people with disabilities. This group is a source of under-represented talent in the workplace. One study reveals that in the majority of companies, individuals with disabilities comprise less than 10% of their total workforce. The study recommends top management lead by example and hire qualified individuals with disabilities on their staff. Through training and focus groups, HR leaders can improve sensitivity toward employees with disabilities.

Training

Within the context of workplace diversity, training plays a key role in retaining talent. The role of training is to promote workplace harmony, learn about others' values, improve cross-cultural communication and develop leadership skills. Awareness training raises understanding of workplace diversity concerns by uncovering hidden assumptions and biases, heightening sensitivity to diversity in the workplace and fostering individual and group sharing. Skill-based workplace diversity training improves morale, productivity and creativity through effective intercultural communication. Leadership development, team building and mentoring programs are also examples of organizational training that promotes growth and collaboration. An overlooked area regarding retention is cross-cultural competence within the organization, often a missed opportunity to address minority retention concerns.

Finally, working in a diverse organization requires diversity competencies for everyone, including HR. Yet not all HR professionals are experts in workplace diversity. A survey notes that only about one-third of companies think their HR staff has the skills to serve a diverse U.S. workforce and only 22% believe HR has the skills to serve a global workforce. HR professionals best qualified to deal with workplace diversity have experience in areas such as team building, change management, conflict resolution and cross-cultural communication.

Aligning the Diversity Process with Strategic Business Goals

The organization that best utilizes the full potential of all employees intentionally and thoughtfully aligns workplace diversity with strategic business goals by following these steps:

Define diversity. Clarify the role of workplace diversity in the organization, including leadership roles and expectations for workplace diversity initiatives. In vision and mission statements, highlight the importance of workplace diversity (for example, is the organization's philosophy on inclusion clearly stated?). Place the vision and mission statements on the company Web site as a public statement of the organization's commitment to workplace diversity. Communicate commitment by allocating the necessary resources -staff, budgets and time -to move the workplace diversity process forward.

Establish accountability. With senior management, HR diversity leaders should develop challenging yet realistic goals for workplace diversity interventions. Demonstrate organizational commitment: 1) appoint senior executives to diversity task forces for succession planning, education and training initiatives; 2) recruit diversity candidates for senior leadership positions; and 3) establish diversity goals and objectives for all leadership levels in the performance management process and reward programs. Demonstrate commitment to workplace diversity by developing solutions when problems are identified through employee attitude surveys, focus groups, etc.

Develop a diversity scorecard. Often overlooked, the scorecard is an important tool to manage diversity. The scorecard includes financial and nonfinancial recognition of diversity ROI initiatives as well as relevant feedback (e.g., change management lessons). When developing the diversity scorecard, include measures aligned with the organization's strategic business goals. When determining measures, keep in mind four themes: 1) key deliverables that leverage the role of diversity in the organization's overall strategy; 2) utilization of diversity in the development of a high-performance work environment; 3) ways in which the corporate culture is aligned with the organization's strategy; and 4) the efficiency of the diversity deliverables.

Studies on Workplace Diversity and the Bottom Line

Several studies link workplace diversity and company performance. The study results run the gamut from identifying critical success factors for diversity initiatives that impact organizational effectiveness to connecting gender and diversity with financial performance.

* The "Makes and Breaks" of Workplace Diversity Initiatives
This study found that successful initiatives that leverage diversity to enhance organizational effectiveness share certain characteristics and approaches. Specifically, successful workplace diversity initiatives hinge on committed leadership, goals/targets of measures of effectiveness, strong diversity professionals, employee involvement and ties to performance evaluation, as well as data to identify, quantify and communicate progress and challenges.

* Diversity Practices That Work
Companies with workplace diversity practices collectively generated 18% greater productivity than the U.S. economy overall. The results of this study suggest that, at a minimum, diversity progress may enhance productivity through effective good leadership and management practices. Key factors that had the greatest impact on overall perceived effectiveness of workplace diversity initiatives were: 1) a track record of recruiting diverse people; 2) management that is accountable for diversity progress and holds others accountable; 3) leaders who demonstrate commitment to diversity; 4) rewarding people who contribute in the area of diversity; and 5) training and education to increase awareness and help employees understand how diversity can impact business results.

* The Effects of Workplace Diversity on Business Performance
This study looks at the effects of racial and gender diversity on organizational performance. A key finding reveals that racial diversity has a positive effect on overall performance in companies that use workplace diversity as a resource for innovation and learning. Further, the study results suggest that the best performance outcomes occur when workplace diversity is found across entire organizational units.

* Connecting Corporate Performance and Gender Diversity
Based on an examination of 353 Fortune 500 companies, this study connects gender diversity and financial performance. (The study does not, however, demonstrate causation.) The key findings show that the group of companies with the highest representation of women are in a stronger position to tap the educated and skilled talent in the marketplace. This is important because on their top management teams experienced better financial performance than the group with the lowest women's representation: that is, 35% higher return on equity and 34% higher total return to shareholders. The study results suggest there is a business case for gender diversity (e.g., recruiting, developing and advancing women) - specifically, organizations that focus on diversitywomen comprise 47% of the U.S. paid labor force and hold 46% of management positions. In addition, women earn more than half of all bachelor's and master's degrees in the United States (57% and 59%, respectively) and nearly half of all doctorates and law degrees (45% and 47%, respectively).

Global Diversity - The European Union

Focus on gender equality and anti-discrimination by the European Union (EU) offers a unique example of workplace diversity outside of the United States. With the addition of 10 member states in May 2004, the European Union-with 25 member states in 2005 and nearly 500 million people-is one of the largest economic forces in the world. Through legislation (called Directives) under the Social Policy Agenda, the EU is establishing significant social, economic and political change. The goal is to be "the most competitive and dynamic knowledge-based economy in the world capable of sustainable economic growth with more and better jobs and greater social cohesion." To achieve the necessary economic and social renewal, the Commission of the European Communities developed a five-year action plan (2000-2005) that focused on investing in people and combating social exclusion. In 2000, with the introduction of the EU Article 13 Race and Employment Directives (to be effective by 2006), the EU put in place measures designed to enforce the right to be treated equally.

1. The Racial Equality Directive 2000/43/EC prohibits discrimination on the grounds of a personal racial or ethnic origin.

2. The Employment Equality Directive 2000/78/EC prohibits discrimination on the grounds of religion or belief, disability, age or sexual orientation.

However, the establishment of a Directive does not guarantee immediate results or even substantial progress. While EU Directives require member states to meet the minimum legislative standards, more work is needed to achieve workforce diversity. For example, a recent report notes that while gender employment and education gaps are closing, the gender gap in the EU remains almost unchanged.

Drivers and Benefits of Workplace Diversity in Europe

In Europe, there is a growing recognition of the benefits of workplace diversity for both the society and the economy. To remain competitive, however, there are a host of issues to address, from racial and ethnic diversity and new roles of women to work/life balance and an aging population coupled with declining birthrates. A recent study notes that a third of the top European companies are gaining competitive advantage from diversity management. These progressive organizations, rather than seeing workplace diversity as a regulatory response that requires anti-discrimination and equal opportunity policies, view diversity management as a vehicle to develop an engaged, motivated and heterogeneous workforce to develop creative business solutions in the global marketplace.

Another study notes the three most often mentioned benefits of workplace diversity by European companies are: 1) improved team effectiveness and cooperation; 2) improved productivity; and 3) improved customer markets with broader access to labor markets. Other drivers considered moderately beneficial are improved employer image, more openness to change, improved morale and commitment, ease of entry into new markets and enhanced effectiveness of complex organization. Overall, the most important shifts in workplace diversity are in the areas of gender and ethnic diversity. For example, as women obtain higher professional degrees and qualifications and earn more money in the marketplace, they are increasingly viewed as important in the workplace. Ethnic minorities are seen as a growing workforce as well as customer base.

Enhancing Competitive Advantage through Diversity Management: Recommendations for HR

* Assess. Conduct a top-to-bottom critical assessment of all company policies and programs. Determine if there are biases that create potential challenges for diverse employees. Review diversity initiative results (e.g., recruitment of top talent, retention strategies, succession planning, career development goals) to determine if the workplace is structured to exclude certain employee groups. Determine where changes in organizational culture, policies and programs need to be made.
* Capitalize. Promote workplace diversity initiatives to the top agendas of senior management by capitalizing on reputation as a diversity management consultant.
* Dialogue. Develop and maintain continuous dialogue with the CEO and senior management regarding workplace diversity as a business strategy.
* Discover. Through focus groups, confidential employee surveys and exit interviews, determine how workplace diversity initiatives are viewed and gather feedback for improvement.
* Network. Network with other HR professionals to learn different approaches to diversity management, challenges encountered and recommended best practices.
* Learn. To best utilize a diverse workforce, profit from lessons learned.

In Closing

There is no "best way" to manage workplace diversity. The identification, selection and purpose of workplace diversity initiatives and their development and implementation differ from company to company. The likelihood of success is dependent on business needs and workforce issues as well as situational factors, such as the organizational culture and workplace environment. Ultimately, the strength of commitment by the CEO, senior management and HR leadership will determine whether the organization successfully leverages workplace diversity for competitive advantage.

Acknowledgment

The author would like to thank the members of the SHRM Workplace Diversity Special Expertise Panel for their sage advice and recommendations.

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About the Author

Nancy R. Lockwood, SPHR, GPHR, is an HR content expert for the Society for Human Resource Management. Her responsibilities include identifying topics and focus areas in need of additional human resource management research, and creating HR products of strategic and practical value for target audiences. She is certified as a Senior Professional in Human Resource Management and a Global Professional in Human Resources by the Human Resource Certification Institute. Ms. Lockwood can be reached by e-mail at nlockwood@shrm.org.

About the SHRM Research Department

The SHRM Research Department researches and synthesizes the thoughts, practices and voices of today’s HR professional, business and academic leaders on various HR topics and focus areas, and creates products of strategic and practical value for HR target audiences.

The Research Department includes the Survey Program, the Workplace Trends and Forecasting Program and the Strategic Research Program. These programs provide SHRM members with a wide variety of information and research pertaining to HR strategy and practices to both serve the HR professional and advance the HR profession.

Source : SHRMOnline