Diversity Efforts Can Support Business Imperatives

Linda Gravett, Ph.D., SPHR

It's no secret that in today's global marketplace, competition is keen and the skills, knowledge and abilities required to keep up with, let alone lead, the competition are becoming increasingly sophisticated. Supplier relationships are often spread across the globe and can become very complex, given language and cultural barriers. The demographics of the existing or potential customer base of many organizations is a moving target. In the meantime, shareholders in private sector companies and stakeholders in public sector organizations have high expectations for profit or results as a return on their investment in time, money, or both. Additionally, this society has become very litigious and we've seen an increase in costly sexual harassment , racial harassment, and other diversity-related lawsuits in the U.S. These factors support the need for strategic planning and a diversity initiative as a component of that planning.

Organizations today spend a great deal of time, effort and money on sending their leaders to off-site retreats and conducting an annual strategic planning session. Typically, a major portion of the time is devoted to establishing a Mission Statement (why are we here?) and a Vision Statement (where do we see ourselves going?). Unfortunately, these plans often don't focus on implementation tactics for achieving the Mission and Vision, taking into consideration environmental barriers and support mechanisms that the organization faces. Some companies develop tactics; that is, methods to carry out their objectives and goals, but don't establish a series of process checkpoints and measures to assess how well those tactics are being carried out.

In order to achieve its Mission and Vision, your organization will require specific competencies to ensure survival and success. For example, do you have employees who know how to find potential customers for your product or service? Do you have staff who know how to craft the message that will appeal to these potential customers? If you wish to expand your marketplace into South America, do you have employees who understand the language and culture in target countries? Do you have Human Resources staff who are conversant with the labor laws of the target countries?

Perhaps your organization has established the objective of enhancing its image within the community as part of its strategic plan. The concept of 'responsible corporate citizen' may be different in other countries. In Swedish companies, for example, parents are often allowed to take paternity or maternity leave at their discretion. The desire for balancing work and family life has been a mainstay of their society, and an expected work benefit, far longer than in the U.S. Swedes frequently surprise their international clients when they leave at 5:00 p.m. with the announced intention of spending time with their families. U.S. business people might judge this behavior as a lack of commitment to work, when in fact the Swedes are demonstrating their strong commitment to quality of life. If a U.S. organization plans to build an organization in Sweden, tactics to address this conceptual difference must be developed.

Years ago, I was carrying out a segment of my organization's strategic plan which was to develop and deliver training for new accounting procedures in the public sector. Sounds pretty straightforward, right? The organization where I was employed was in the Far East, and my trainees were all Japanese. Since I could speak the language, I was under the mistaken impression that conducting the training would not be a problem. Indeed, during the workshop my students were smiling and nodding and had no questions when I asked if anyone needed clarification. Following the workshop, I was totally frustrated when all my students (who were also my direct reports) continued to use exactly the same accounting procedures that they were using before the training!

I called upon a Japanese colleague for some advice, and he reminded me of Japanese cultural norms. The 'boss' is revered, as is a teacher. In this case, I was both. If the students had asked questions during the workshop, it would have caused me to 'lose face' because I couldn't teach effectively. I had to find another way to educate my students and ensure they had their questions addressed. During the follow-up workshop, I designed small mini-quizzes and provided individual feedback to clarify points that weren't being grasped. This time, the training was successful. However, I had wasted a training day in terms of my time and the time of five employees!

A critical component of strategic planning is implementation. I know of no organization today that can afford to omit tactics that address the diversity of its customers, suppliers, shareholders and employees if it wants to ensure that it successfully achieves its Mission and Vision.

Your Diversity Initiative Can Enhance Recruitment and Retention

A 1999 joint survey conducted by Saratoga Institute in New York and Interim Services found that lack of a tailored career development program is one of the top three reasons that the 'emergent employee' leaves an organization. The 'emergent employee' is not only the often-described Generation X'er who wants to balance work and family life, he or she is the employee of any age who desires to work with the employer to match individual interests with organizational objectives. The study found that others drivers for retention are the quality of supervision and the scope and flexibility of work. Regardless of the reason employees leave, turnover is expensive, and proactive efforts to retain qualified employees are required to ensure that the best and the brightest don't defect to your competitors.

A well-crafted, carefully planned diversity initiative can bring many positive results to an organization, one of which is improved recruiting and retention capability. I'm referring to a diversity initiative that's multifaceted, not simply an Affirmative Action Plan. If your organization's mission and vision require specific core competencies, the diversity initiative should revolve around these fundamental questions:

Do we currently have the skills, knowledge and abilities we need to ensure that this organization meets its long-term objectives?

In those areas where there's a shortfall in core competencies, where can we obtain the most qualified people?

Do we have employees who currently have the potential and interest to expand their knowledge and skills? If we do, how can we develop these capabilities?

If we don't have employees now with the right mix of skills - or potential to acquire them -- what are the recruiting sources available to us?

What will it take to attract the people with the skills we need? Does our organizational culture provide the kind of environment that potential employees want?

There is ample data in industry that demonstrates the positive correlation between organizational commitment and job satisfaction. Likewise, evidence supports the positive correlation between job satisfaction and productivity in terms of both quality and quantity. A diversity initiative that contains a focused recruiting plan and targeted retention methods can improve the odds that more of your employees will have a high level of job satisfaction and organizational commitment.

You may still be wondering how a recruiting plan can be a part of a diversity initiative. Let's say that your organization has decided to pursue the business of a growing segment of the marketplace -- Hispanics. You've conducted strategic planning among your leadership and found, during the environmental scanning phase, that Hispanics have not only language differences but cultural differences such as family norms and buying habits. After checking your internal candidate inventory you find that you don't have any employees within the organization who are Hispanic, speak fluent Spanish, or have experience with the Hispanic culture. This leaves you with the option of recruiting outside the organization, but will simply placing ads in the classified section of the local newspaper attract applicants with the skills and experience you require? Probably not.

To ensure that recruiting efforts stay ahead of the need for Hispanic employees, your Human Resources strategic plan would need to incorporate ways to build a relationship with the Hispanic community and to locate Hispanic web sites and periodicals in which to place ads. The Human Resources efforts would also have to reach into the training and education arena to ensure that current employees and supervisors understand and appreciate the cultural norms of (future) Hispanic coworkers. The plan should include ways to build the capacity within your organization for team efforts in problem solving and resolving conflicts among a workforce that has a different cultural heritage, to enhance productivity and profitability.

Retention efforts are a critical part of the diversity initiative. Even though there are some 'givens' that enhance retention, such as quality of supervision and meaningful work, other drivers of organizational commitment vary in relation to one's age, race, personality, gender, education or any number of other factors. Since replacement and retraining costs are very high, especially in technical positions, well-planned retention efforts can have a definite, positive impact on profitability. One size does not fit all, however, when it comes to peoples' reason for staying with an organization.

According to research conducted by Cornelius Grove and Willa Hallowell and reported by the Society for Human Resource Management, native white males will make up 38% of the U.S. workforce, compared to the current 42.5%. Today's workforce is more racially and ethnically diverse than ever before (20% is non-white). More women are in the workforce than 20 years ago: 48% of today's workforce is female. In 1994, the median age of workers nationwide was 38 years. The median age projected for the year 2005 is 41. As we become increasingly diverse, individual, tailored efforts in the form of benefits, telecommuting, and career development will be required to keep qualified employees.

I believe it's time now to begin recruiting for requirements, not tradition, and to hold employees accountable for the skills, knowledge, and behaviors that are necessary to ensure our organizations' survival and success.

Diversity Results in Various Phases of the Initiative

In this Western culture, too often we expect results -- productivity, return on investment, profit -- almost immediately. U.S. companies are not always willing to invest in the future if the 'future' is a year or more away. Like any other change in an organization's approach toward doing business, the results of a diversity initiative are not always immediately apparent. I'd like to explore the different phases of a diversity initiative and describe the bottom line results that a company can expect in each phase.

My experience has shown that most organizations fall into one of the phases on the continuum below in terms of diversity efforts:

In the status quo stage, an organization's leaders focus on recruiting and retaining a workforce that is pretty much like them. This can be the case whether the leadership is white male, Black female or college educated. People at top levels either consciously or unconsciously seek out new employees who are like them in terms of both appearance and world view.

A status quo organization has limitations: limited perspectives about making a product, delivering a service, building a customer or client base, marketing the product, and other aspects of the business. The cost in terms of lost sales, failure to add to the existing customer base, and technological advances will vary from organization to organization -- however, there is a cost. Perhaps the leadership assures itself that 'things are OK -- we're making a profit.' The question becomes, "can we continue to expand, meet customer demands, and stay competitive for another five years?" The company may not have the right core competencies to answer in the affirmative because it's hiring based on tradition, not requirements.

A company in the reactive stage is one that has grown large enough to have a person on staff who understands the need for compliance with protective labor laws such as Title VII of the Civil Rights Act , or a company that is seeking a government contract and must have an Affirmative Action Plan to bid for that contract. Whatever the situation, the company reacts to a law, or a specific incident such as a sexual harassment claim, rather than articulating a diversity initiative to meet their strategic objectives.

Companies in the reactive stage find that they're spending money on grievances, law suits, managerial time spent in resolving conflicts, and turnover. Daily firefighting is more the order of the day rather than taking an objective, long-term approach toward attracting, developing, and retaining people with the core competencies the company requires.

In the proactive stage, key people within the organization plan ahead for the needs of the company and take steps to prevent absenteeism, turnover, inadequate supervision, and poor customer service. For example, the Human Resources Department stays abreast of pending legislation and develops and recommends policies that will communicate how the organization will comply with new laws. When problem solving or process improvement teams are developed, an intentional effort is made to include employees across functions and demographic groups to ensure that different perspectives are represented and creativity is enhanced. The company begins to experience sounder decisions and a workforce that is more committed to providing quality work.

As companies progress along the diversity continuum, the leadership decides to include the diversity initiative as an integral component of its strategic planning process. Instead of engaging in recruiting, training, and employee development activities because of the law or public pressure, the organization makes a conscious effort to include diverse backgrounds, perspectives, and talents based on individual talents rather than on factors such as age, race, ethnicity or gender.

During the redefinition stage, organizations establish and focus on business imperatives and take steps to ensure that they have, or obtain, the right mix of skills, knowledge, and abilities to achieve those objectives. The financial benefit comes to the company when, instead of scattering its resources in terms of people, time, and money, it remains focused on the priorities that will maximize its competitive edge. The company's Human Resource professionals can develop recruiting methods,

compensation and benefits, and educational programs that support company objectives rather than using the 'shotgun approach' toward achieving goals.

Few organizations are truly in the final stage of the continuum, managing diversity. Managing diversity is a process that includes performance management systems, communications systems, and career development initiatives. In short, managing diversity is the day-to-day focus on concrete, specific ways to enhance the synergy that results from systems that promote the utilization of 100% of every employee's skills, 100% of the time. This is a high standard and takes ongoing creativity and effort to maintain.

Study after study has demonstrated that organizations that manage diversity effectively experience less absenteeism and turnover, less managerial time and energy spent on resolving conflicts that could be settled between and among employees, improved productivity and safety, and a more positive public image. Each of these results can be quantitatively measured to demonstrate a return on investment for the time and money spent on diversity efforts. Diversity initiatives are not simply 'feel good' activities; they positively affect the organization's ability to remain viable in a highly competitive global marketplace.