Managing Workplace Diversity is Good for the Bottom Line
By Tasnim Benhalim
_From its beginning,
the United States has continued its grow to include ever more diverse
people. In the rich multicultural America of today, the "We" of "We the
people…" now includes faces from around the globe. The demographics of
the United States are changing - fast. The U.S. Census Bureau projects
that by 2040, half of all Americans will be what are now called
"minorities." Nationally, the numbers of foreign born American citizens
has grown by almost 200% from 1970 to 2000 to a record 28.4 million. Of
that number, 67% are in the labor force (2000 U. S. Census). On average,
10,000 people relocate and settle in the Dallas Metroplex each month.
And, the Dallas Independent School District has seen an increase in
languages spoken from six languages in 1976 to approximately 80
different languages and dialects in 2000 (Dr. Paul Giesel, Univ. of
Texas at Arlington).
These
eye-opening statistics only serve to highlight the timely imperative of
managing diversity. And, while some may look with nostalgia to a more
homogeneous past, forward-looking companies with a careful eye on the
bottom line, have embraced this changing picture of America and the
global marketplace it reflects. As our world at home and abroad becomes
increasingly connected and diverse, corporate approaches that listen and
respond to diverse perspectives and markets are gaining the competitive
advantage.
"Our effectiveness at using the talents of all people of different backgrounds, experiences and perspectives is key to our competitive advantage."
Texas Instruments Worldwide Diversity Statement
The above quote reflects a recognition of the positive impact diversity can have in the workplace and on markets. In short, well beyond EEO compliance, and altruistic approaches to "do the right thing", savvy corporations know: diversity management makes good business sense. Credible, measured, corporate-wide diversity initiatives result in:
o Increased market share both nationally and globally*
o Increased "reputational capital" as an "employer or vendor of choice"
o Improved ability to attract and retain top talent
o Competitive advantage through multiple perspectives**
o Reduced turnover costs***
o Significant reductions in litigation costs for EEO complaints
* Studies have shown that companies with a diverse employee and supplier base are more successful in gaining access to multicultural markets.
**A recent study by the American Management Association found that heterogeneous teams (vs homogeneous teams) consistently produced superior corporate results.
***Costs estimates on training a new employee range between 2% to 4% of annual salary.
Corporate-wide support for diversity significantly enhances employee well-being and results in a more fully engaged workforce focused on meeting business goals. All of which adds up to a healthier bottom line.
As the demographics of America have changed, so to have American markets. In addition to the primary diversity functions of recruitment, retention, training, mentoring, and minority purchasing, targeting specific ethnic or cultural communities for improved market share is another important benefit of a focus on diversity. The collective buying power of African Americans, Asian Americans, Latinos and American Indians is expected to reach $1.3 trillion by 2001 - up from $647 billion in 1990 (Selig Center for Economic Growth at the University of Georgia). It is important to note that half of all Hispanics in America live in just two states: California and Texas (US Dept. of commerce, Economics and Statistics Administration; U.S. Census Bureau).
While many companies have increased profitability with successful diversity initiatives others that have failed to fully answer the call of diversity in a timely, business serious way have seen both their stock prices and reputational capital damaged with high-profile and costly lawsuits. Prominent cases such as the ones brought against Coca Cola (192.5 million) and Texaco (142.5 million) illustrate the cost of failing to fully respond to the realities of diversity.
Locally, many Dallas area corporations have extended their commitment to diversity through participation in the Dallas Together Forum Private Sector Covenant for Workplace Diversity and Minority Economic Opportunity. The goals of the organization are built upon the premise "that Dallas will benefit from substantially increased level of ethnic minority participation in the area's economic mainstream."
From media interests to financial institutions, from information technology to education, the bottom lines of many organizations hine on responding to the realities of diversity. Increasingly, successful companies are making the connection between promoting and managing diversity for a competitive advantage. Understanding and responding to America's wealth of diversity is not a matter of choice, but a critical component of success.
"Our effectiveness at using the talents of all people of different backgrounds, experiences and perspectives is key to our competitive advantage."
Texas Instruments Worldwide Diversity Statement
The above quote reflects a recognition of the positive impact diversity can have in the workplace and on markets. In short, well beyond EEO compliance, and altruistic approaches to "do the right thing", savvy corporations know: diversity management makes good business sense. Credible, measured, corporate-wide diversity initiatives result in:
o Increased market share both nationally and globally*
o Increased "reputational capital" as an "employer or vendor of choice"
o Improved ability to attract and retain top talent
o Competitive advantage through multiple perspectives**
o Reduced turnover costs***
o Significant reductions in litigation costs for EEO complaints
* Studies have shown that companies with a diverse employee and supplier base are more successful in gaining access to multicultural markets.
**A recent study by the American Management Association found that heterogeneous teams (vs homogeneous teams) consistently produced superior corporate results.
***Costs estimates on training a new employee range between 2% to 4% of annual salary.
Corporate-wide support for diversity significantly enhances employee well-being and results in a more fully engaged workforce focused on meeting business goals. All of which adds up to a healthier bottom line.
As the demographics of America have changed, so to have American markets. In addition to the primary diversity functions of recruitment, retention, training, mentoring, and minority purchasing, targeting specific ethnic or cultural communities for improved market share is another important benefit of a focus on diversity. The collective buying power of African Americans, Asian Americans, Latinos and American Indians is expected to reach $1.3 trillion by 2001 - up from $647 billion in 1990 (Selig Center for Economic Growth at the University of Georgia). It is important to note that half of all Hispanics in America live in just two states: California and Texas (US Dept. of commerce, Economics and Statistics Administration; U.S. Census Bureau).
While many companies have increased profitability with successful diversity initiatives others that have failed to fully answer the call of diversity in a timely, business serious way have seen both their stock prices and reputational capital damaged with high-profile and costly lawsuits. Prominent cases such as the ones brought against Coca Cola (192.5 million) and Texaco (142.5 million) illustrate the cost of failing to fully respond to the realities of diversity.
Locally, many Dallas area corporations have extended their commitment to diversity through participation in the Dallas Together Forum Private Sector Covenant for Workplace Diversity and Minority Economic Opportunity. The goals of the organization are built upon the premise "that Dallas will benefit from substantially increased level of ethnic minority participation in the area's economic mainstream."
From media interests to financial institutions, from information technology to education, the bottom lines of many organizations hine on responding to the realities of diversity. Increasingly, successful companies are making the connection between promoting and managing diversity for a competitive advantage. Understanding and responding to America's wealth of diversity is not a matter of choice, but a critical component of success.
