Upload
ella-may
View
219
Download
4
Embed Size (px)
Citation preview
The Business Case for Diversity & Inclusion:Why Diversity is Good for Business
Eric PetersonManager, Diversity & Inclusion
Society for Human Resource Management
2
The Evolution of the FieldOver the last twenty years, the field has evolved considerably …
Compliance Case“Diversity is something
we’re forced to do … by law.”
Values Case“Diversity is the right thing
to do … for our people.”
BusinessCase
“Diversity is the smartthing to do … for
our business.”
3
The Compliance Case for DiversityDiversity in the US began as a legal mandate, and that tradition continues …
1960 1970 1990 20001980
1 2,3 4 5 6 7 8 8
1961: Creation of the Equal Employment Opportunity Commission (EEOC)
1964: Passage of the Civil Rights Act (incl. Title VII)
1965: Creation of the Office of Federal Contract Compliance
1967: Passage of the Age Discrimination in Employment Act
1973: Passage of the Rehabilitation Act of 1973
1990: Passage of the Americans with Disabilities Act
1996, 2007: Failed attempts to pass the Employment Non-Discrimination Act
1
3
4
5
6
7
2
8
1983: Expansion of Title VII of the Civil Rights Act of 1964
The Values Case “vs.” The Business Case
4
• There are many reasons why an organization might/should focus on Diversity.
• Usually, these fall under two broad themes: the Values Case and the Business Case.
Values CaseValues Case Business CaseBusiness Case
“It’s the right thing to do, and will make our people happier.”
“It’s a smart thing to do for business , and will improve our bottom line.”
• Both the Values Case and the Business Case are important and necessary; they do not contradict each other, but rather complement each other.
5
Why is a Business Case Important?
• Strategic Diversity Management Plans depend on the commitment of many people in the organization, not the least of which are your CEO or equivalent, and Senior Leadership Team.
• These leaders are naturally focused on the financial health and well-being of the organization.
• A strong business case for diversity will clearly show that creating a diverse and inclusive workplace will benefit everyone in the organization, by making the organization stronger, more resilient, and more competitive.
5
After all, why isn’t “doing the right thing” enough?
The Business Case for Diversity
6
When managed well, diversity is one of the most important assets an organization has in order to achieve and maintain a competitive
advantage.
Effective diversity management = competitive advantage
Workplace Diversity Defined
7
Skin color
Gender
Age
Education
Socio-economic StatusNative born/non native
Geographic Location
Military Experience
Parental Status
Smoker/Non smoker
Thinking Styles
Work Background
Religion
Functional SpecialtyCommunication Style
Marital StatusBeliefs
Culture Values
Behaviors
Visible Diversity
Traits
Invisible Diversity
Traits
Sexual OrientationPhysical Abilities/Qualities
Personality Level in Organization
Body Type/Size
Ethnicity
Two Definitions of “Inclusion”
8
Inclusion is the achievement of a work environment in which all individuals are treated fairly and respectfully; have equal access to opportunities and resources; and can contribute fully toward an organization’s success.
Inclusion is the capacity to leverage difference.
Key Challenges a More Diverse Workforce Brings
9
Communication & Language Issues
Expectations (salaries, benefits)
Increased Turnover
More Training
Potential for Conflict
Generational Differences
Accommodations
Opportunities a more Diverse Workplace Brings
10
Fresh, new ideas
Technological Competence
Greater capacity for
Risk
Cultural Competence
Increased Language
Skills
Global Focus
11
The Business Case for Diversity (cont’d)
1. Greater adaptability and flexibility in a rapidly changing marketplace
2. Attracting and retaining the best talent
3. Reducing costs associated with turnover, absenteeism and low productivity
4. Return on investment from various initiatives, policies and practices
5. Gaining and keeping greater/new market share (locally and globally) with an expanded diverse customer base
6. Increased sales and profits
7. Mitigate and minimize legal risks
Source: Lockwood, N., June 2005, “Workplace Diversity: Leveraging the Power of Difference for Competitive Advantage”, Research Quarterly. Society for Human Resource Management: www.shrm.org/hrresources
Diversity & Inclusion helps the business’s bottom line in the following ways:
12
1. Greater flexibility and adaptability
Customer Service
Flexibility & Adaptability
The Changing Workforce
13
2. Attracting & Retaining the Best Talent
• Which do you believe?1. Talent exists independently of variables such as race, gender,
sexual orientation, ability, religion, marital/parental status, or socio-economic background, or
2. Talent is tied to variables such as race, gender, sexual orientation, ability, religion, marital/parental status, or socio-economic background.
• If #1, how much talent does your organization currently have access to?
• We are facing a global shortage of talent – are you prepared?
14
2. Attracting & Retaining the Best Talent (cont’d)
Greater competitiveintensity
22%
Increasing numberof markets served
11%
Increasing size of company
19%
Finding talent 31%
Source: McKinsey & Company
Finding talent is seen as the most important management challenge facing business executives in the next 5 years
15
• Building leadership capability starts with creating a culture that makes employees want to stay
• Ensuring that all employees have full and equal access to opportunities
• Implementing leading-edge talent management programs such as:– Mentoring– Cross-functional development assignments– Job rotations– Special assignments– Career pathing– Skills inventories– Succession planning (55% of employers are already doing succession
planning)
2. Attracting & Retaining the Best Talent (cont’d)
3. Turnover, Absenteeism, Low Productivity
16
• More likely to stay with that company
• More likely to recommend their company to others
• Less likely to have experienced discrimination
• Less likely to have missed days at work
• More engaged in their work
In diverse & inclusive work environments, employees are:
Source: Gallup Organization, “Civil Rights in the Workplace Survey,” 2005
3. Turnover, Absenteeism, Low Productivity (cont’d)
17
• Each year, more than 2 million people voluntarily leave organizations due to perceived unfairness (cumulative comments/jokes, unfair policies, perceived invisibility)
• This trend costs U.S. corporation $64 billion each year
• This figure is nearly equivalent to the combined revenues of Google, Goldman Sachs, Starbucks, and Amazon.com, and does not include costs associated with litigation or loss of reputation
Source: Level Playing Field Institute, “The Corporate Leavers Survey,” 2007, LPFI.org
5. Greater/New Market Share
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
2000 2007 2012
BlackHispanic/LatinoNative AmericanAsianMultiracial
19
Billi
ons
Buying Power by Race
Source: Jeffrey M. Humphreys, The Multicultural Economy 2007, www.selig.uga.edu
20
6. Increased Sales and Profits
• NASDAQ by 28%• Standard & Poor’s 500 by 25%• Dow Jones Industrial Average by 22%
Source: – DeGroat, TJ, No Way to Measure Diversity's Value? Mainstream Article Ignores the Hard Facts, DiversityInc.com http://www.diversityinc.com/public/19452.cfm
Over a 10-year period, the index of publicly traded companies in DiversityInc’s Top 50 Companies for Diversity list outperformed the:
21
7. Mitigate and Minimize Legal Risk
• Over the past 10 years, major race and gender discrimination lawsuits cost U.S. corporations $2.3 billion in settlements alone.
• In FY 2007, there were 17,734 disability discrimination charge filings.
• In the same year, there were 2,880 religion-based discrimination charge filings
Source: U.S. Equal Employment Opportunity Commission; http://www.eeoc.gov/
2.3 Billion?