Diversity Efforts Pay Off - Even During a Downturn

The ongoing recession has prompted many struggling organizations to view their diversity and inclusion initiatives as "nice-to-have" activities that can be safely suspended until the economy improves. But a top HR expert says such efforts still rate "must-have" status—and the right approach can provide a company with a serious competitive edge.

By Anne Stuart

These days, companies of all sizes and types have zeroed in on one common big-picture goal: outlasting the recession.

"Right now, people are in survival mode," says Dr. Shirley Davis, Director of Diversity and Inclusion Initiatives for the Society for Human Resource Management (SHRM). "They're asking, ‘What's the least we can do to ride out this wave? What are some of the least-critical things we can cut?'"

In that environment, many might understandably view diversity efforts as falling into that "least-critical" category, qualifying as strong candidates for back-burner status until times improve.

But Davis argues diversity should remain on every organization's high-priority list despite the downturn. In fact, she says, strong, genuine initiatives can even provide companies with a serious competitive advantage just when they need it most.

"Never before have diversity and inclusion been more important than now, even in this global climate of turmoil and chaos," says Davis, who serves as thought leader on global diversity issues for Alexandria, Va.-based SHRM, which represents more than 250,000 HR professionals in more than 140 countries. "It's a time of redefining and repositioning."

As part of that effort, she says, many organizations have taken a hard look at every aspect of how they do business--and, in many cases, concluded that diversity is a critical part of the package.

"A clear business strategy around diversity has become much more of a business necessity," Davis says. "It used to be a values case: ‘We do it because it's the right thing to do.'" These days, there's also a business case. "Now we do it not just because it's the right thing to do, but because it makes good business sense," she says.

Those who do the right thing—and do it well—stand to profit from their efforts, Davis continues: "Diversity is going to be an enabler to sustainability and competitiveness, if we can ensure that we are building robust, comprehensive, strategic diversity initiatives that are aligned to needs of business."

Davis cites recent research indicating that diversity remains a priority worldwide as well as in the United States. In a study conducted for SHRM earlier this year, the Economist Intelligence Unit (EIU) surveyed 546 senior executives on five continents. The findings: Eighty-six percent of respondents reported having active diversity and inclusion initiatives. Fifty-five percent reported having efforts that "strongly" or "very strongly" support diversity and inclusion, while 31 percent said they had policies that at least "moderately" support those goals.

Diversity Drivers
Davis cites several major factors that are contributing to continued widespread interest in diversity issues. Among them:

• Globalization, with ever more U.S. companies conducting business in other countries. "We've got to understand other nations' people, cultures, values, laws and norms," Davis says.

• Immigration, with growing numbers of immigrants seeking jobs at U.S. companies.

• Competitive pressures, with companies seeking just the right mix of employees to stay out in front of their rivals. "Some companies have realized that their ability to compete comes down to their great talent – and their talent has to be diverse," Davis says.

• Branding considerations, with companies paying more attention to their target audiences. "You've got to make sure that your organization reflects and understands and can meet the needs of a greater, more diverse consumer audience," Davis says.

• Leadership opportunities, with forward-thinking executives stepping up to protect and even expand their investments in diversity and inclusion initiatives.

The SHRM/EIU survey also cited these drivers: interest in fairness and justice for historically disadvantaged groups, concerns about having large enough talent pools in the future and, of course, compliance with regulations.

Diversity Definition: A Work in Progress
Diversity initiatives typically still cover the traditional categories of race, ethnicity, religion, gender, age and marital status. But today, many have expanded to address other areas as well.

Among them: U.S. military veterans, particularly those seeking work after active duty overseas. "Some need to be assimilated back into our culture after being away for years," Davis says. And some are returning with injuries that may require specific some accommodation. Another current high-profile category: the gay and lesbian community, particularly in states that have legalized same-sex marriage.

In Davis's view, a truly diverse workplace also includes what she calls "diversity of thought" – essentially, the opposite of a homogenous culture where everybody thinks alike. "You need to go beyond the comfort of your current culture," she says. "You need people who reflect the diverse state of consumers that you want to attract--or that you already have and want to keep."

Who's in Charge?
Like any other organization-wide effort, a successful diversity initiative requires enthusiastic support from top management. Some CEOs and corporate boards have publicly reinforced their companies' commitment to diversity by appointing Chief Diversity Officers to oversee such efforts. "They recognize that they need someone at the top to drive the effort, just the way they need a COO or a CFO or a Chief Marketing Officer," Davis says. However, such positions remain the exception rather than the rule: In the June 2009 SHRM/EIU survey, just 6 percent of respondents reported having CDOs at their companies.

Well-known employers with executive-level diversity positions include Campbell's Soup Co., Coca-Cola Co., General Electric Co., IBM, McDonald's Corp., Merck & Co. and PricewaterhouseCoopers LLP, among others. Many universities and government agencies have also created such positions.

Meanwhile, many midsize and smaller organizations still run diversity initiatives through HR, often as a percentage of one manager's time. (That was the case among 59 percent of the SHRM/EIU participants surveyed.) In those cases, Davis says, it's important to recognize that successful diversity efforts require more than traditional HR expertise, including relevant marketing, branding and messaging know-how; targeted recruiting skills; the ability to forge partnerships with minority organizations; and possibly some experience with ensuring supplier diversity.

For the past three years, SHRM has been working to professionalize the field, developing standards, definitions and a common nomenclature. In SHRM research involving more than 2,000 HR Managers, participants overwhelmingly called for formal diversity training and certification as well. For that reason, SHRM now offers a variety of diversity-oriented information and events (see "Resources," below).

An All-Inclusive Approach
Perhaps the biggest diversity trend in recent years is the additional emphasis on inclusion.

"Ten years ago, ‘inclusion' wasn't a connotation that we used in this field," Davis acknowledges. But eventually, thought leaders in the field realized that while diversity may add new voices to an organization, that doesn't necessarily mean that anyone's listening. As Davis puts it: "You can have diversity and still not have inclusion." In some cases, she says, "Diversity brings people in, but the culture doesn't embrace them. You may have diverse talent, but that doesn't mean that those employees are engaged or leveraged or have access to opportunities. They may not be in senior leadership, they may not be in line for promotions, they may not be part of succession planning."

For that reason, many organizations are now specifically weaving inclusion into their diversity initiatives. Davis says the concept is really quite simple: "Inclusion allows you to create a work environment and culture, and policies and practices, that allow everyone equal access to opportunity -- and give everyone the chance to succeed."

Doing Diversity
For those interested in launching or beefing up their diversity/inclusion initiatives, Davis offers the following advice:

Start with the right mindset. View diversity and inclusion initiatives as a way to bring people closer together rather than setting them apart. "The current definition of diversity is that we look at the ways that we are different--but also at the ways that we are similar," Davis says.

Choose a champion. "Your first question should be: Who is going to lead this effort?'" Davis says. If you don't have a dedicated diversity officer, she recommends appointing an employee who has "the courage and credibility to work at all levels and with all employees."

Take an enterprise-wide approach. "The effort needs to be integrated throughout the organization," says Davis, noting that many such diversity efforts sidelined during the recession have been developed as distinct programs rather than as core values woven deeply into corporate culture.

Conduct an organization-wide diversity/inclusion audit. Review what has—and hasn't—worked in the past. "Understand why things failed. Understand how not to make the same mistakes," Davis says. If possible, do a competitive analysis to see how your efforts stack up against those of your rivals. Build a business case for new or expanded initiatives.

Go beyond just adopting a broader approach to hiring. "Look inside the organization," Davis says. Try to identify existing staffers who might be ripe for development—or specific areas that might benefit from additional diversity-related programming or messaging.

Take a comprehensive, long-term approach. "Don't just do one training event and think you're done," Davis advises. "Build out a plan for one year, two years, even five years."

About Our Expert
Anne Stuart is a Boston-based freelance journalist who specializes in writing about business, career and workplace issues. She is a former staff editor or writer for Inc., CIO and Harvard magazines, The Associated Press and several daily newspapers. Her work has also appeared in CFO, Corporate Counsel, Deliver and many other magazines, newspapers, newsletters and Web site.

Back  |   Employer White Paper Archive