Yes

by Gary Maclean

Created on: April 03, 2008   Last Updated: May 30, 2011

What does a diversified group of employees do for a corporation? What does a company gain from having a racially, ethnically mixed staff of employees? Outside of forced quotas or equal rights of any kind, what is there that might persuade any company to blend their employee make up? If a corporation has a group of employees from different ethnic, racial, cultural, perhaps even spiritual, backgrounds, are there any benefits to be enjoyed?

I don't know what the promise of workforce diversity is supposed to be, but I have to imagine it has something to do with dollars. Few other benefits would convince an organization to freely participate in any program, let alone one that is so potentially crippling as forced diversification. A study conducted by Covenant Investment Management on the performance of the S&P 500 showed that organizations that excel at building a diverse workforce will experience better financial performance in the long run than organizations which are not effective in managing diversity. In other words, if you build a diverse workforce you are going to make more money. That is one heck of a promise, now, can diversity deliver?

That same study found, the annualized return for the 100 companies which rated lowest in workforce diversity, averaged 7.9 percent. This is compared to 18.3 percent for the 100 companies that rated the highest. The stock market performance of the firms that were high performers on workforce diversity was 2.5 times higher than that of the firms that invested little in diverse work forces.

Some additional benefits experienced by those organizations developing diverse workforces include;

IMPROVED GLOBAL MANAGEMENT CAPACITY: About 30% of the 200 companies surveyed indicated they have a more successful program of placing management employees across the globe. They feel this is due to having built their workforce to include diverse backgrounds that may already be familiar with the global surroundings of their specific location.

AVOIDED COURT COSTS: Another 30% of the S&P 200 indicated that by having the right employee available, who was familiar with specific customs and cultures, they were able to avoid what could otherwise have been very time consuming and expensive litigation.

IMPROVED ACCESS TO NEW MARKETS: The more diverse your management group is, the more markets your organization has knowledge of. 40% of the S&P 200 study indicated this was indeed a benefit and it has paid off for them.

LOWERED ABSENTEEISM RATES: This was reported as a realized benefit that progressively gets better as their workforce is diversified more and more. 40% of the S&P 200 agreed.

REDUCED LABOR TURNOVER: Over 50% of the S&P studied organizations, cited a reduced turnover as one of the primary benefits of developing a diversified workforce.

HELPED TO OVERCOME LABOR SHORTAGES: By opening up the employment ranks to all cultures and backgrounds it was possible to expand the hiring perimeter. More potential employees became available therefore more employees were able to be reviewed for certain positions. This was reported as a benefit by over 60% of all respondents.

ENHANCED CUSTOMER SATISFACTION: Speaking from my own personal experience, I prefer to speak with someone of similar national backgrounds when I contact an OEM (Original Equipment Manufacturer). We can understand each other better for one thing. The more diversified your workforce the better able your company will be to directly communicate with all customers across the globe. Again, a 60% positive response for this benefit.

IMPROVED INNOVATION AND CREATIVITY AMONGST EMPLOYEES: (60%) With the expanded backgrounds and experiences of a diversified work group an organization is bound to gain new ideas and directions. Everyone, thinking differently, providing more ideas, suggesting better directions; a very healthy environment indeed.

IMPROVED MOTIVATION AND EFFICIENCY OF EXISTING STAFF: (60%) With the influx of new talent, existing employees will be shaken from their potential perches of comfort and stability. They will be invigorated and driven to new heights.

HELPED TO ATTRACT AND RETAIN HIGHLY TALENTED PEOPLE: (65%) Other multi-cultural individuals, on the outside looking in, will be significantly more enthused about coming to an organization for potential employment where that organization already employs a veritable wealth of talent from all segments of the population.

ENHANCED CORPORATE REPUTATION: (70%) By opening the candidate requirements to all potential employees rather than a select group, the organization will have such a stronger pool to choose from. The stronger their own workforce the better their output. The better their output the more attractive their reputation.

STRENGTHENED CULTURAL VALUES WITHIN THE ORGANIZATION: (75%) Working next to and with people of any and all cultures, day in and day out, will serve to promote what America started out to be in the first place; a giant melting pot. Employees will share beliefs, standards, ideas, backgrounds, customs, everything about themselves with one another. All employees will ultimately improve their own personal understanding and acknowledgment of different cultures and backgrounds. With understanding comes strength.

These being the recognized benefits shared by a large percentage of the 200 Standard & Poor organization surveyed, indicates to me they should also make up the promise of diversified work groups. Based on those descriptions I would have to say that workforce diversity does indeed live up to its promise.

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