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The Business Case for Diversity

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The Business Case for Diversity Training for Supervisors Reviewed April 2013 * Introduction We have become not a melting pot but a beautiful mosaic. – PowerPoint PPT presentation

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Title: The Business Case for Diversity


1
The Business Case for Diversity Training for
SupervisorsReviewed April 2013
2
Introduction
  • We have become not a melting pot but a beautiful
    mosaic. Different people, different beliefs,
    different yearnings, different hopes, different
    dreams.
  • Jimmy Carter
  • Many employers are unaware of the benefits of
    and ways to achieve workplace diversity. This
    presentation provides this information as well as
    how to measure the impact of a diversity
    initiative.
  • This is a sample presentation intended for
    supervisors and other employees with management
    responsibilities. It is designed to be
    presented by an individual who is knowledgeable
    in diversity, metrics and business strategies and
    who is familiar with the companys strategic
    business plan. This is a sample presentation that
    must be customized to include the companys
    policies, culture and strategic objectives.

3
Objectives
  • At the end of this presentation, you will be able
    to
  • Define diversity.
  • Describe what a diversity initiative is.
  • Cite business reasons for initiating diversity
    programs.
  • Name the four primary steps in establishing a
    diversity initiative.
  • Explain how and what metrics are used to measure
    the impact of a diversity initiative.

4
What is Diversity?
  • Diversity in the employment context is defined
    as the collective mixture of differences and
    similarities that includes for example,
    individual and organizational characteristics,
    values, beliefs, experiences, backgrounds,
    preferences and behaviors.
  • Workplace diversity can be a significant
    positive force in assuring success by allowing
    each and every one of us to believe in ourselves
    and to contribute the best we have to offer.

5
What is a Diversity Initiative?
  • A diversity initiative is a "comprehensive
    managerial process for developing an environment
    that works for all employees."
  • Roosevelt Thomas, Beyond Race and Gender.
    (AMACOM, 1992).
  • Companies who recognize that they are only as
    good as their employees devote a great deal of
    time and resources to hiring the most talented
    individuals. By striving to build and maintain a
    diverse workforce, they have access to a larger
    pool of candidates thus improving the odds of
    hiring the best people. Employers who put people
    first, regardless of their race, religion,
    gender, age, or physical disability have an
    advantage over competitors.

6
Group Discussion
  • What is diversity?
  • What is a diversity initiative?

7
Business Reasons for Initiating Diversity Programs
  • Increased sales revenue.
  • More customers.
  • Greater market share.
  • Greater relative profits.

8
Business Reasons for Initiating Diversity
Programs (contd)
  • Increased sales revenue
  • Minorities in the U.S. now represent the largest
    25 sales growth markets for some products.
  • Companies realize that increasing the amount of
    purchasing from minority businesses may mean
    increased sales over the long term (Models of
    Organizational Change, Morgan, 1997).

9
Business Reasons for Initiating Diversity
Programs (contd)
  • More customers
  • Just as the workforce is becoming more diverse,
    so is your market.
  • "Minorities" are now the majority in six out of
    the eight largest metropolitan areas of the
    Unites States.
  • The combined African-American, Hispanic-American
    and Asian-American buying power is more than 750
    billion dollars.
  • Women are the primary investors in more than half
    of U.S. households.

10
Business Reasons for Initiating Diversity
Programs (contd)
  • Greater market share.
  • From 1990 to 2005, minority group market share
    and purchasing power doubled.
  • The present and future monetary power of diverse
    markets is more apparent each year.

11
Business Reasons for Initiating Diversity
Programs (contd)
  • Greater relative profits.
  • According to a study by Cedric Herring, professor
    of sociology at the University of Illinois at
    Chicago
  • Average sales revenues of organizations with low
    racial diversity were approximately 3.1 million,
    compared with 3.9 million for those with medium
    diversity and 5.7 million for those with high
    diversity.
  • Herring, Cedric. "Does Diversity Pay? Racial
    Composition of Firms and the Business Case for
    Diversity" Paper presented at the annual meeting
    of the American Sociological Association,
    Montreal Convention Center, Montreal, Quebec,
    Canada, Aug 11, 2006

12
Group Discussion
  • What are business reasons for initiating a
    diversity program?

13
Steps in Establishing a Diversity Initiative
  • The four primary steps in establishing a
    diversity initiative are
  • Accessing opportunity internally.
  • Reducing liability internally.
  • Accessing opportunity externally.
  • Reducing liability externally.

14
Steps in Establishing a Diversity Initiative
Step 1 - Accessing Opportunity Internally
  • Assessing opportunity internally focuses on
    building an inclusive work environment that
    attracts and retains talented people, encourages
    creativity and innovation and obtains commitment
    and top performance from employees.
  • Are there disparities between groups in how they
    perceive they are treated (e.g., by seniority,
    race, age, gender, education, parental status,
    etc.)?
  • What is the demographic makeup of your workforce
    by level and how does that compare to the
    surrounding labor force? Who are you not having
    access to in recruiting and promoting?
  • What are your projected recruitment needs in
    terms of skills and positions?
  • What are the statistics in the labor market
    relative to your needs?
  • Where are there untapped resources of talent
    within the organization such as overqualified,
    underutilized or undeveloped employees?
  • What obstacles are recruiters finding?
  • What are your organization's critical needs for
    creativity and innovation?

15
Steps in Establishing a Diversity Initiative
Step 2 - Reducing Liability Internally
  • Reducing internal liability involves minimizing
    risk and cutting the
  • cost of problems that result when diversity is
    mismanaged.
  • What are the statistics around grievances,
    complaints and lawsuits in your organization that
    demonstrate vulnerability or unaddressed
    problems?
  • How much has your organization spent on legal
    fees and settlements for discrimination and/or
    wrongful termination lawsuits?
  • Which departments, divisions, or groups are
    experiencing low morale, diminished performance
    or conflict?
  • What are the statistics regarding absenteeism?
  • What is the rate of turnover and what is the cost
    to the organization of replacing those who leave?
  • What do exit interviews tell you about why people
    leave?

16
Steps in Establishing a Diversity InitiativeStep
3 - Accessing Opportunity Externally
  • Accessing opportunity externally requires
    focusing on a growing and changing marketplace.
    The demographic changes in a customer base mean
    opportunities for growth in new and different
    products and services.
  • What are the demographics of your existing and
    projected customer base?
  • How do the demographics of your workforce compare
    to those of your customer (client or patient)
    base?
  • In how many countries do you do business?
  • How many languages and cultures are represented
    in your marketplace?
  • How many of these languages and cultures are
    represented in your workforce?
  • What are your customers' or clients' perceptions
    of your workforce?
  • What do customer satisfaction surveys tell you
    about missed opportunities and needed
    improvements in products or services?

17
Steps in Establishing a Diversity InitiativeStep
4 - Reducing Liability Externally
  • Reducing liability externally pertains to
    limiting negative perceptions about your
    organization in the marketplace. A damaged image
    because of diversity-related insensitivity is
    costly in lost customers and markets.
  • What customer complaints have you received?
  • What (if any) discrimination lawsuits have been
    brought against your organization by external
    entities?
  • What is the rate of repeat business or customer
    loss? How does that rate compare to others in
    your industry?
  • Are there any instances of negative publicity for
    your organization (e.g., bad press, boycotts,
    protests)?
  • Where are there negative perceptions about your
    organization by external entities?

18
Group Discussion
  • What are the four steps in establishing a
    diversity initiative?

19
Diversity Metrics
  • Meaningful metrics promote support for
    dedicating resources for diversity initiatives
    and help link diversity initiatives to
    organizational strategic goals and objectives.
  • Examples of meaningful data
  • Level of participation in the firms diversity
    vision formulation.
  • Number of diverse employees in formal mentoring
    programs who get promoted.
  • Percentage of diversity objectives aligned with
    key strategic business objectives that are tied
    to bonus and compensation systems.
  • Representative mix on the board of directors.
  • Overall organizational climate and culture
    ratings and their effects on all represented
    groups.

20
Diversity Metrics (contd)
  • The return on investment (ROI) of a diversity
    initiative is measurable. Follow these five
    steps to establish monetary values
  • Identify a unit of measure that represents a unit
    of improvement.
  • Determine the value of each unit.
  • Calculate the change in performance data.
  • Determine an annual amount for the change.
  • Calculate the total value of the improvement.

21
Group Discussion
  • What are the five steps in assigning monetary
    value to intangibles?

22
Summary
  • Diversity is defined as the collective mixture of
    differences and similarities that includes for
    example, individual and organizational
    characteristics, values, beliefs, experiences,
    backgrounds, preferences and behaviors.
  • A diversity initiative is a "comprehensive
    managerial process for developing an environment
    that works for all employees.
  • The four steps in establishing a diversity
    initiative are assessing opportunity internally,
    reducing liability internally, accessing
    opportunity externally and reducing liability
    externally.

23
Summary (contd)
  • Business reasons for initiating diversity program
    are increased sales revenue, more customers,
    greater market share and greater relative
    profits.
  • Meaningful diversity metrics promote support for
    dedicating resources for diversity initiatives
    and help link diversity initiatives to
    organizational strategic goals and objectives.

24
Evaluation
  • Please be sure to complete and leave the
    evaluation sheet you received with your handouts.
  • Thank you for your attention and interest!
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