Documente Academic
Documente Profesional
Documente Cultură
Workplace Diversity:
Leveraging the Power
of Difference for
Competitive Advantage
By Nancy R. Lockwood, SPHR, GPHR
HR Content Expert
Research
'A broad definition of diversity ranges from person'Diversity represents a company's fundamental attiality and work style to all of the visible dimensions
tude that it not only respects and values the individsuch as race. age. ethnicity or gender, to secondary
uality of its employees but also understands how to
tap the potentially significant contributions inherent
influences such as religion, socioeconomics and
in diversity."'
education, to work diversities such as management
Alexandra Groess and union, functional level and classification or
proximity/distance to headquarters."'
Allianz Group's Intemational Diversity Project
Workplace DiversityAn Evolution
Fram 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 workforce 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 is not strictly a U.S. concept: a brief discussion on the drivers of 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 Itiat
once focused primarily on gender and race and reflects
the broader perspective of workplace diversity today.
Figure 1
Approach:
assimilation
legal
valuing diversity
managing diversity
Basis:
EEO/AA
differences as assets
multicultural
corporate cultures
Advantages
Figure 2
competitiveness.
Greater diversity in the iabor pool: By 2008. women and minorities will represent 70% of the new labor force
entrants, and by 2010, 34% of the U.S. workforce will be non-Caucasian.
- An aging workforce: By 2010. the U.S. workforce will have an increase of 29% in the 45-64 age group, a 14%
increase in the 65+ age group and a 1% decline in the 18-44 age group.
Gioiiailzatlon: In the next decade. 75% of new workers will likely be from Asia, while North America and Europe will
have 3% of the world's new labor force.
; Hewia Associates. (2004, February). Preparir^ the workforce of tomorrow. Retrieved March 21,2005.
from
www.tiewitt.com.
Oversitylnc
the business case. When organizations develop external partnerships with minority communities and suppliers, for exampie, 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 loyai to their employer and more iikely to boast
about their company to family and friends. The result
is lower tumover 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 iist, with
recruitment initiatives and partnerships deveioped
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 reiatlons a priority: Ford spent 6%
of its total procurement budget ($3.2 billion) with its
first-tier diversity suppiiers."
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 Grovrth, the purchasing power of minorities
in the United States wili quickly outpace that of whites
in the next five years, in 2009, for example, the con>
bined buying power of African-Americans, Hispanics,
Asian-Americans and Native Americans is expected to
exceed $1.5 triliion, more than triple the 1990 level
by a gain of $1.1 trillion or 242%. In contrast, the buying power of whites wiii 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 utiiize the knowledge
of minori^ employees who can relate to different
groups in the marketplace. Verizon Communications,
for exampie, utilizes its African-American spokespeople, such as the actor James Eari Jones, to attract
African-American consumers.'' Fannie Mae, a leading
mortgage iending 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 diversity training as a strategic business
initiative to reach a segment of the population that
could profit from their service.'*
Rnally. the SHRM 2004-2005 Workplace Forecast
notes that one ofthe top economic trends is expansion into the global marketplace.'^ Organizations can
better capture, keep and serve their internationai customer base when their own workforcesuch as
The diversi^ retum on investment (DROI) is calculated by using the diversity initiative cost and benefits
to get the benefit/cost ratio {BCR). BCR = diversity
Figure 3
Ibid.
' Ibid.
In what ways does your organization actively leverage the diversity of employees for the purpose of increasing competitive advantage? {Number of Respondents = 310}
By ensuring leadership development
programs reach all employees
By meeting ttie needs of diverse
coslomers (bi-iinguai. etc.)
Sy inlegraiing diversiiy in
organization's business strategy
By increasing Innovation by lapping
employees of all backgrounds
By utilizing diverse espenence
levels on orojects/assign men is
By using diverse employees
to recruit new employees
By improving the performance of teams
8y attfactifig customers of
a particular market or demographic
By using diverse employees as mentors lo help
employees imprnve thair personal performance
By iiicreasmg productivity wrth motivation
technlQues that apply to a variety of employees
By conducting culture audits to tsenchmatk
diversity progress against competitors
30%
10%
20%
30%
40%
Sou/te; Society for Human Resource Management. (2004. August 3)- SHRM/Fortune Diversify Weekly Survey. Retrieved March 25.2005.
wmt.atwm.oai.
a* I-:-
from
" Matton. J. N., & Hernandez, C, M. {2004, August). A new study identities the "makes and breaks'" of diversity initiatives. Journal of
Organizational Exceilence. 23. 4, 47-58.
" Hart. M. A, (1997). Managing diversity for sustained
New York: The Conference Board,
competitiveness.
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.^^
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 diversity concems by uncovering hidden assumptions and biases, heightening sensitivity
to diversity in the workplace and fostering individual
and group sharing. Skill-based diversity training
improves morale, productivity and creativity through
effective intercultural communication.^^ Leadership
development, team buiiding 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.^
Rnally. working in a diverse organization requires
diversity competencies for everyone, including HR
(see Rgure 4). Yet not all HR professionals are
experts in 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
Collison, J. {2003, June). SHRM/NOWCC/CEO older workers survey.
Alexandria, VA: Society for Human Resource Management.
=' Towers Pemn HR Services. (2004. October). The coming talent crisis:
Is your organization ready? Retrieved March 2 1 , 2005. from
www.towers.com.
" Hewitt Associates. {n.tS.). The workforce Is charging: Is your organization? Retr\eved March 2 1 . 2005. from www.hewttt.com.
" Hewitt Associates. (2004. February). Preparing the workforce of tomorrow. Retrieved February 10, 2005, from www.hewitt.com.
^ Cole, Y. (2004, June/Juiy). Top 10 companies for diversity. Diversityinc
Top. 3. 3. 56-96.
' Mscton, J. N.. & Hernandez. C. M. (2004, August). A new study Identifies the "makes and breaks" of diversity Initiatives. Journal of
Organizational Excellence. 23. 4 . 47-58,
' Nalionai Urban League, (2004, June). Diversity practices that work:
The American worker speaks. New York: Author.
Figure 4
HR Competencies
for Diversity Management
Actlve/nonjudgmental listening.
Willingness to challenge one's own concepts about
diversity.
Collaboration skills.
Experience with conflict resolution and change management.
Sensitivity toward terms iabeiing groups regarding
diversity.
Ability to identify diversity issues and understand
related tensions.
Intercultural team building.
Ability to express respect and appreciation.
Openness to learning about others who are different.
Ability to educate others on how to build diverse
people skiits.
Abiiity to provide appropriate responses.
Source: Adapted from Carr-Rufflho, N- (1999). Diversity success
strategies. Boston: Butterworth-Heinemann.
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 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 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 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 diversi^;
Kochan, T, Bezrukova, K., Ely, R., Jackson. S.. Joshi. A., Jen, K., et al.
(2002, October). T7)e eflfects of diversity on tjus/ness performarice:
Report of tne Diversity Research Network. Building Opportunities for
leadership Development Initiative, Alfred P Sloan Foundation and the
ScKiety for Human Resource Management,
" Catalyst. (2004). Connecting corporate performance and gender diversity. New York: Author.
" European Commission. (2000, June 28). Communication from the
Commission to the Council, the European Parliament, the Economic
and Social Committee and the Committee of the Regions: Social policy agenda. Brussels: Author,
* European Commission. (2004}. Equality and
al report 2004. Brussels: Author.
non-tHscrimlnationannu-