The Importance of Diversity Planning in the Future of American Businesses

Implementing a successful diversity program goes well beyond meeting the requirements of Affirmative Action and looks into creating a business culture where all individuals are accepted and respected for the perspectives that they can provide to the business.

Ginger Drehmel-Leland 8/26/2009

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The workforce in the United States is rapidly changing, and the success of American businesses will soon depend on their ability to implement successful diversity programs. A report by the United States Census Bureau projects that by the year 2042 (or sooner) the United States will no longer have a majority racial/ethnic group (Johnson & Borrego, 2009). A study by the Hudson Institute, conducted for the United States Department of Labor, found that 85% of the new entrants into the workforce in the next decade will be women, minorities and immigrants (Allen, 1991). The baby boomer generation is aging and soon, more than half of all American workers will be legally protected under the Age Discrimination in Employment Act of 1967 (Panszczyk, 2005, p. 157). These are compelling reasons for American businesses to begin implementing diversity programs in preparation for the changes coming to the American workforce over the next few decades. Implementing a successful diversity program goes well beyond meeting the requirements of Affirmative Action and looks into creating a business culture where all individuals are accepted and respected for the perspectives that they can provide to the business. Diversity is defined as the state or fact of being of a different kind, form, or character. Diversity programs look to implement a culture of acceptance and inclusion where no one is judged on the basis of their race, ethnicity, gender, sexual orientation, socioeconomic status, age, physical abilities, religious beliefs, political beliefs, or ideologies. Diversity programs work to create an environment where all people respect and utilize the unique qualities that each individual brings to their department and to the business.

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How can a business prepare for the upcoming workforce changes?

First, a business should focus on recruiting and retaining a diverse talent pool, including hiring into executive and middle management positions. Another important step is to ensure that the Human Resource staff has the skills, time and experience necessary to successfully implement a culture of inclusion. A business should also take into consideration the needs of their consumer base, which is also becoming increasingly diverse. And finally, a business needs to prepare for a succession strategy as baby boomers hit retirement age, and to create an environment where intergenerational teams work together effectively. The creation of a diverse and talented management team can be difficult. A survey, conducted by Hewitt Associates, identified that the most significant diversity issues are in the executive and middle management ranks. Their findings concluded that without successful recruitment and retention of diverse talent, the pool of individuals to draw from for promotional opportunities is shallow (Hewitt Associates, 2004). Without promoting diverse individuals into management levels, it can be difficult for the culture of diversity to take hold and for diverse individuals to believe that the culture is genuine. This can create difficulties for external recruitment for these positions. Another challenge is the integration of new recruits into a management team that may already be in place. In addition to recruitment, it is equally and often more important that a business focus its efforts on retention of diverse employees. It is much more cost-effective to retain talent

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that you already have, than to continue to recruit and train as talented individuals leave your business. Demand for these qualified individuals is high, and if they do not feel that the business values their contribution, they can, and often do, leave for other opportunities where they believe they will be valued. Another important focus is ensuring that the Human Resource staff is prepared to tackle the changes to the workforce. According to a Hewitt Associates survey, only about one-third of companies think their HR Staffs have the skills to serve a diverse U.S. workforce. The survey also reports over three-quarters of HR leaders spend less than 25% of their time preparing for the future workforce (Hewitt Associates, 2004). Based on the statistics that the workforce over the next few decades will shift dramatically, it will be critically important that businesses address this issue sooner, rather than later. It takes considerable time and effort to implement and reinforce a change in company culture and there are often very difficult challenges involved in rolling out a successful program. To remain competitive, a business also needs to respond to the changes to its customer base. Hewitt reports that the total purchasing power of U.S. minorities today is said to be $1.4 trillion (Hewitt Associates, 2004). As minorities continue to make up more and more of the available customer base, responding to those needs will become more and more critical to a business. Company workforces that are not in tune with their customer base are unlikely to understand customer needs. Management will need to strategize how they can continue to diversify their workforce to match the diverse makeup of their customer base.

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Lastly, it is essential that all businesses begin to incorporate succession planning to address possible complications with the retiring baby boomer generation and incorporate environments where intergenerational teams can work together effectively. Succession planning can ensure leadership continuity, prevent transition problems, and reduce incidents of premature promotion (Soonhee, 2003). By performing employee assessments and identifying individuals that are candidates for future openings, a business can prepare a plan for training and mentoring current employees, and even identify openings for external recruitment. By planning ahead, a business is better able to respond to workforce changes and continue operations with less disruption during transitions. Businesses also need to research how generations differ in their work habits and expectations. Finding common ground that will allow those teams of individuals to work together effectively will also be an important factor.

How can a diversity program benefit a business?

First and foremost, diversity programs improve employee morale. When employees feel valued for their contribution, retention rates often improve, employees take pride in doing their work, and productivity often increases. Lets face it; we all like some positive reinforcement on the job. We all like to be included and valued for who we are as individuals. Another benefit of diversity programs is the ability for a business to compete in an increasingly diverse customer base. When you have a diverse group of people working on an issue, there are more perspectives and ideas that are generated to solve a

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problem. By having an employee pool as diverse as your customer base, you can hopefully avoid improper marketing techniques and handling of customer service issues. All of this sets your business up to also have the opportunity to compete globally, which will also become increasingly important in the future. Businesses with a culture of diversity and inclusiveness also maintain a more positive public image. A culture of diversity and inclusiveness shows in everything that a business does, from impacting customers to opening up a wider recruitment pool of talented individuals. A business can earn a reputation of being fair and reasonable in its handling of matters of diversity. That reputation can increase the client base as word of mouth spreads in a form of free marketing. As you can see, the impending changes to the American workforce will soon drive the necessity for diversity planning. Susan Hockfield, President of Massachusetts Institute of Technology, stated, The truth is, a richly diverse America does not await us; it is upon us. It is our present and our future (Hockfield, 2009). Diversity programs are not new to the American business scene, but the content and importance of those programs has changed over the years. American businesses should be less concerned with meeting a quota and most concerned with tapping the diverse talent they have available. The differing perspectives and knowledge available at their fingertips could just be what is needed to drive the business to a very bright and rewarding future.

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References
Allen, G. (1991). Valuing cultural diversity; industry woos a new work force [Electronic Version], Communication World (p. 1). Farmington Hills, MI: Gale Group. Retrieved from http://www.allbusiness.com/human-resources/workforcemanagement-hiring/160671-1.html Hewitt Associates. (2004). Preparing for the workforce of tomorrow [Electronic Version]. Timely Topics Survey Results. Lincolnshire, IL. Retrieved from http://www.hewittassociates.com/Intl/nA/enUs/Knowledgecenter/ArticlesReports/ArticleDetail.aspx?cid=1734 Hockfield, S. (Speaker). (2009). Building a culture of inclusion through distributed leadership [Electronic Transcript]. Dr. Martin Luther King, Jr. Celebration. Massachusetts Institute of Technology. Retrieved from http://web.mit.edu/hockfield/speeches/2009-mlk-celebration.html Johnson III, R., & Borrego, E. (2009, June). Public administration and the increased need for cultural competencies in the twenty-first century [Electronic Version]. Administrative Theory & Praxis (M.E. Sharpe), 31(2), 206-221. Retrieved August 24, 2009, doi:10.2753/ATP1084-1806310204 McAdams, S. (2009, April 19). Diversity programs important during recession. Retrieved from http://employmentlawpost.com/diversity/2009/04/19/diversityprograms-important-during-recession/ Panszczyk, L. A. (2005). HR How To: Intergenerational Issues, Chicago, IL: CCH Incorporated. Retrieved from http://books.google.com/books?id=QNv1FAbfLQQC&dq=intergenerational+issue s+hr+how+to&printsec=frontcover&source=bl&ots=bB3z8lwUKH&sig=odec_kVz HLpkTLGBpkwiZch8muo&hl=en&ei=8yCdSv7OLNXunQfAt4mWCA&sa=X&oi=b ook_result&ct=result&resnum=3#v=onepage&q=&f=false Soonhee, K. (2003, winter). Linking employee assessments to succession planning. Retrieved from http://www.entrepreneur.com/tradejournals/article/160714666.html.