There’s a strong business case to be made for encouraging a diverse workforce. In addition to being an excellent recruitment and retention tool, the effect of diversity initiatives on a company’s bottom line can be huge. A diverse workforce can tap into the wide variety of abilities that employees from different backgrounds and abilities bring to the table. It can also help foster relationships between employees and the company’s customers and partners. In short, a diverse workforce is not just a politically correct concept. It’s a business necessity that can give a company a competitive advantage.
Diverse workers create new opportunities
This Harvard Business School article, “IBM Finds Profit in Diversity,” looks at how IBM linked a focus on staff diversity to client diversity, which led to new business opportunities. When Lou Gerstner became CEO, he launched a diversity task force initiative to discover ways to appeal to a broader group of employees and customers. The article outlines the factors that made the initiative so successful, including a huge jump in the number of female, ethnic minority and gay, lesbian, bisexual and transgender executives. “By deliberately seeing ways to more effectively reach a broader range of customers, IBM has seen significant bottom-line results.” The task force also created a link between the company’s diversity goals and its business goals. “IBM’s efforts to develop the client base among women-owned businesses have quickly expanded to include a focus on Asian, black, Hispanic, mature (senior citizens), and Native American markets. The Market Development organization has grown revenue in the company’s Small and Medium-Sized Business Sales and Marketing organization from $10 million in 1998 to hundreds of millions of dollars in 2003.”
The cost-benefit analysis of diversity
This report, from a study by the European Commission Directorate-General for Employment, Industrial Relations and Social Affairs, examines the measurement of the costs and benefits of workforce diversity policies, such as voluntary initiatives by businesses to recruit, retain and develop employees from diverse social groups. The report delves into several issues surrounding the implementation of diversity initiatives, including a look at the business case for diversity and a section that outlines internal and external obstacles to the adoption of diversity policies.
Be diverse or perish
From ezinearticles.com, “Diversity in the Workplace: Benefits, Challenges and Solutions” is a call to action for businesses. “As the economy becomes increasingly global, our workforce becomes increasingly diverse. Organizational success and competitiveness will depend on the ability to manage diversity in the workplace effectively. Evaluate your organization’s diversity policies and plan for the future, starting today.” The article presents an overview of the reasons for and ways to achieve diversity. “Companies that encourage diversity in the workplace inspire all of their employees to perform to their highest ability. Company-wide strategies can then be executed; resulting in higher productivity, profit, and return on investment.”
The case for diversity recruitment
“Diversity Recruiting — The Compelling Business Case” delivers what it promises with an overview of the potential benefits from embracing diversity. Under the heading “Customers demand it,” the author describes how “a major bank found that by increasing the diversity of its counter staff it attracted a more diverse range of customers as well as increasing its overall sales at the branches that more closely ‘mirrored’ the population of the neighborhoods in which they were located.” Under “Avoiding major blunders,” he points out how a more diverse product development team that has “a broad range of experiences can more easily ‘question’ and spot product features and advertising elements that can potentially offend or turn off a significant portion of the customer base.”
Diversity as a business imperative
This article “Winning with Diversity” from BostonWorks looks at moving past recruitment into exploiting the business potential of a diverse workplace. “This means recognizing that diversity is not just a recruitment, retention and employee development issue, but that the benefits of diversity can extend to marketing, expanding market share and improving customer loyalty. Companies have been pretty good about recruiting diverse talent, but now, once they get that talent in the door, they are looking for ways to really leverage that diversity.” Gilroye Griffin, managing director for Korn/Ferry’s diversity practice, says, “if companies don’t do it, their competitors will, and they will be getting more business when they do… Anyone who is doing diversity for do-goodism will fail.”
Ann Macaulay is a freelance editor and regular contributor to Canadian HR Reporter. Her Web Sight column appears regularly in the CloseUp section.