Diversity – The Business Case For Diversity

I wish TFL readers and their loved ones a happy, healthy, successful and peaceful 2004.

Recently we were in the midst of Boston’s first Nor’easter of the season. The snow had been falling for over twenty-four hours. The experts said we had twenty-four more to go. I was home fighting a battle with pneumonia and pneumonia was winning on rounds. My January article was due on Paul Hawkinson’s desk in two days. During the past three years we have examined a variety of diversity issues in The Fordyce Letter. We mentioned the business case for diversity a few times but hadn’t met it head on. Everyone expects a surge in hiring in 2004. A vigorous hiring market will bring more attention to the business case for diversity. Corporate leaders love to focus on the business case; sometimes it seems like they talk it to death. Let’s begin the New Year with some useful information about the business case for diversity.

According to J. Howard and Associates, a Boston area consulting firm, companies deal with workforce diversity in four different ways:

Complacent denial: Senior management maintains diversity or inclusion isn’t a problem in their organization;

Clever obstruction: Companies focus on staying out of trouble and heading off discrimination lawsuits rather than dealing with diversity in a meaningful way;

Ineffectual efforts: Companies may want to achieve genuine inclusion but are unable to build effective programs throughout the organization;

Strategic leadership: Senior management recognizes inclusion as a strategic business issue, and is committed to eliminating negative treatment and building processes that effect change.

I view the business case for diversity in a pretty simplistic way. The buying power of the various ethnic groups is staggering; the economic possibilities presented by the emerging markets are plentiful. The 2000 census signaled that the demographics of the United States are changing at a meteoric pace and the numbers do not lie.

I believe that pushing for diversity without a good business reason does more harm than good and makes about as much sense as a fish riding a bicycle. Diversity is here and is changing the traditional way of doing business. It creates opportunities, opens new markets, and facilitates doing business globally. Recruiting firms and corporations have to deal with it; everyone has to deal with it. It certainly doesn’t take a senior VP of Marketing with a Harvard MBA to conclude that today in America diversity is an integral part of a company’s business growth.

The Business Case for Diversity, by Dr. Samuel Betances and Dr. Laura Torres Souder, (www.ihediversity.gwu.edu/Events/Betances-diversitybus.htm) explains the business case for diversity:

Diversity initiatives must respond to multiple and ever-changing challenges in the workplace – globalization, increasing technology, a shrinking workforce, fewer males, downsizing of military installations and the ensuing displaced labor pools, the changing roles of women in the labor market, work and family issues, sexual orientation, anti-discrimination legislation, greater ethnic awareness, immigration, religious beliefs, the aging workforce, and the quest for people with mental or physical disabilities to make greater contributions. These and other related factors make diversity initiatives legitimate bottom line issues.

The Corporate Leadership Council (www.corporateleadershipcouncil.com) published The Business Case for Diversity, May 2003. This seven-page, well-referenced publication is a must read for people involved in diversity initiatives. The report opens with a statement on the value of diversity:

Demographics research suggests that the future workforce will be much more diverse including individuals of different genders, ages, races, ethnicities, and lifestyles. Effectively leveraging this human capital will play a large role in companies’ future competitiveness and economic performance.

Companies profiled in Council research explain that the key driver in fostering a diverse culture is the competitive advantage gained. A study conducted by the Conference Board in 1996 indicates that the diversity of customers and markets, global diversity and productivity impact are the three top reasons companies invest in diversity initiatives. Diversity in the workplace gives companies a greater ability to compete in business markets that are also becoming increasingly diverse.

Recruiting diversity candidates is an integral part of the business case for diversity. Companies want to hire the best and the brightest. Today some of the best and the brightest are people of diversity. I did diversity search for over 25 years and was sick of hearing the mythical observation: “We’d like to hire diversity candidates but they are not out there.” In all my years in search I never failed to find diversity candidates in the most esoteric of disciplines I failed many times to get diversity candidates to interview in the northeast.

How well a company works; how productive and successful it is in a highly competitive global economy, depends on whether it has the best people, people who are comfortable working across lines of race,, sexual orientation, age, gender, religion, and background. The days of insularity and parochialism are gone. Companies that are not inclusive, welcoming, and inviting are not getting the best workers. Diversity is a business imperative because it affects competitiveness. Diversity recruiting should be a natural outcome of an inclusive hiring process that is based entirely on business-directed criteria.

Today’s diversity customers have thought provoking questions for corporations: Why should we buy your products or use your services? Why should we be your loyal customers? Why should we help your company grow? You don’t hire us. You don’t seek our input. You have no place for us. We are not members of your senior management. If companies are going after the diversity dollar in the emerging markets, doesn’t it make sound business sense to have diversity in their workplace? Put yourself in the diversity person’s place. Would you really support a company that ignores you every step of the way?

“Diversity Recruiting The Compelling Business Case”, an article written by Dr. John Sullivan for Electronic Recruiting Exchange, in January 2000, stresses the importance of diversity recruiting.

There are many excellent legal and social arguments for recruiting diverse employees. However the most powerful and effective arguments that I have made for excellence in diversity recruiting relate to the business and the dollar impact that diversity recruiting can have on the bottom line. Does having a workforce with diverse backgrounds, experiences, and ideas have impact on the firm’s profitability? Well the answer is a resounding yes!

Article Continues Below

The following global perspective is from If the World Were a Village, by Meadows and A Summary of the World, by Provasnik.

If we could shrink the earth’s population to a village of one hundred people, would you recognize it? Here’s the makeup:

52 villagers would be female; 48 would be male

33 would be children

6 would be over the age of 65

58 would be Asian

70 would be persons of color

30 would be Christian

6 would own half the village’s wealth; all 6 would be US citizens

9 would speak English

50 would suffer from malnutrition

80 would live in sub-standard housing

66 would not have access to clean, safe drinking water

10 would be lesbian, gay, or bisexual

1 would have a college education

Frank X. McCarthy is Partner in Charge of Diversity Practice with The Corporate Source Group. He was a Catholic priest from 1956-70, working in parish and school assignments, serving as a paratrooper chaplain with the 101st Airborne, and as pastor and director of an African American community project in Paterson, NJ. He founded Xavier Associates and conducted diversity searches for over 25 years. Frank is a well-known and widely respected author and speaker on workplace diversity, recruiting, and candidate research. He can be reached: frank@diverseworkplace.com

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