Our nation and our workforce are both becoming more diverse. The share of people of color in the United States is increasing; more women are entering the labor force; and gay* and transgender individuals are making vital contributions to our economy, while being increasingly open about who they are. To that end, businesses that embrace diversity have a more solid footing in the marketplace than others.
A diverse workforce combines workers from different backgrounds and experiences that together breed a more creative, innovative, and productive workforce. And businesses have learned that they can draw upon our nation’s diversity to strengthen their bottom line. In this way, diversity is a key ingredient to growing a strong and inclusive economy that’s built to last.
Let’s look at the top 10 economic benefits of workplace diversity.
1. A diverse workforce drives economic growth. Our nation’s human capital substantially grows as more women, racial and ethnic minorities, and gay and transgender individuals enter the workforce. A McKinsey & Company study, for example, found that the increase in women’s overall share of labor in the United States—women went from holding 37 percent of all jobs to 47 percent over the past 40 years—has accounted for about a quarter of current GDP.
2. A diverse workforce can capture a greater share of the consumer market.By bringing together individuals from different backgrounds and experiences, businesses can more effectively market to consumers from different racial and ethnic backgrounds, women, and consumers who are gay or transgender. It is no surprise, then, that studies show diversifying the workplace helps businesses increase their market share.
3. Recruiting from a diverse pool of candidates means a more qualified workforce. When companies recruit from a diverse set of potential employees, they are more likely to hire the best and the brightest in the labor market. In an increasingly competitive economy where talent is crucial to improving the bottom line, pooling from the largest and most diverse set of candidates is increasingly necessary to succeed in the market.
4. A diverse and inclusive workforce helps businesses avoid employee turnover costs. Businesses that fail to foster inclusive workplaces see higher turnover ratesthan businesses that value a diverse workforce because they foster a hostile work environment that forces employees to leave. The failure to retain qualified employees results in avoidable turnover-related costs at the expense of a company’s profits. Having a diverse and discrimination-free work environment helps businesses avoid these costs.
5. Diversity fosters a more creative and innovative workforce. Bringing together workers with different qualifications, backgrounds, and experiences are all key to effective problem-solving on the job. Similarly, diversity breeds creativity and innovation. Of 321 large global enterprises—companies with at least $500 million in annual revenue—surveyed in a Forbes study in 2011, 85 percent agreed or strongly agreed that diversity is crucial to fostering innovation in the workplace.
6. Businesses need to adapt to our changing nation to be competitive in the economic market. Census data tell us that by 2050 there will be no racial or ethnic majority in our country. Further, between 2000 and 2050 new immigrants and their children will account for 83 percent of the growth in the working-age population. Our economy will grow and benefit from these changing demographics if businesses commit to meeting the needs of diverse communities as workers and consumers.
7. Diversity is a key aspect of entrepreneurialism. Our nation’s entrepreneurs are a diverse set of people of color, women, gay, and transgender individuals. According to the Census Bureau, people of color own 22.1 percent of U.S. businesses. Moreover, women own28.8 percent of U.S. businesses, and Latina-owned businesses in particular are the fastest-growing segment of the women-owned business market. According to the National Gay and Lesbian Chamber of Commerce, gay or transgender individuals own approximately 1.4 million(or approximately 5 percent) of U.S. businesses.
8. Diversity in business ownership, particularly among women of color, is key to moving our economy forward. The diversity of our nation’s business owners helps boost employment and grow our economy. For example, women of color own 1.9 millionfirms. These businesses generate $165 billion in revenue annually and employ 1.2 million people. Latina-owned businesses in particular have total receipts of $55.7 billion since 2002.
9. Diversity in the workplace is necessary to create a competitive economy in a globalized world. As communities continue to grow, it’s important to harness the talent of all Americans. Businesses should continue to capitalize on the growth of women, people of color, and gay and transgender people in the labor force. Our increasing diversity is a great opportunity for the United States to become more competitive in the global economy by capitalizing on the unique talents and contributions that diverse communities bring to the table.
10. Diversity in the boardroom is needed to leverage a company’s full potential. By 2050 there will be no racial or ethnic majority in the United States, and our nation’s boardrooms need to represent these changing demographics. Currently people of color and women only represent about 14.5 percent and 18 percent, respectively, of corporate boards among the senior management of Fortune 500 companies. Recruiting board directors with a breadth of expertise and varied experiences will make companies more proficient.
Sophia Kerby is Special Assistant for Progress 2050, and Crosby Burns is Research Associate for the LGBT Research and Communications Project at the Center for American Progress.
* In this column, the term “gay” is used as an umbrella term for people who identify as lesbian, gay, or bisexual.
Download this column (pdf)
You are: Managing Human Resources
Managing Diversity in the Workplace
The Chancellor's Committee on Diversity defines Diversity as:
So why is it when many people think of diversity, they think first of ethnicity and race, and then gender? Diversity is much broader. Diversity is otherness or those human qualities that are different from our own and outside the groups to which we belong, yet present in other individuals and groups.
It's important to understand how these dimensions affect performance, motivation, success, and interactions with others. Institutional structures and practices that have presented barriers to some dimensions of diversity should be examined, challenged, and removed. A good starting-point for thinking about diversity is to become familiar with UC’s systemwide Non-Discrimination Statement:
“It is the policy of the University not to engage in discrimination against or harassment of any person employed or seeking employment with the University of California on the basis of race, color, national origin, religion, sex, gender identity, pregnancy, physical or mental disability, medical condition (cancer-related or genetic characteristics), ancestry, marital status, age, sexual orientation, citizenship, or status as a covered veteran. This policy applies to all employment practices, including recruitment, selection, promotion, transfer, merit increase, salary, training and development, demotion, and separation.”
Of course, diversity also encompasses a wide variety of other differences, including work experience, parental status, educational background, geographic location, and much more. And managing diversity means more than simply observing legal and policy requirements. It also means actively promoting community and comfort with difference, as noted in UCSF’s Principles of Community:
“We recognize, value, and affirm that social diversity contributes richness to the University community and enhances the quality of campus life for individuals and groups. We take pride in our various achievements and we celebrate our differences.”
As this suggests, workplace diversity can provide tremendous benefits in terms of improved morale, outside-the-box thinking, greater teamwork, and an atmosphere of mutual understanding and respect.
Workforce diversity is a reality at San Francisco. We already reflect the national demographic trends predicted for the year 2000 by the Hudson Institute in its 1987 report, Workforce 2000. Accommodation issues for our diverse workforce, such as childcare, elder care, flexible work arrangements, disability accommodation, and literacy are being addressed in the workplace.
Managing diversity is defined as "planning and implementing organizational systems and practices to manage people so that the potential advantages of diversity are maximized while its potential disadvantages are minimized," according to Taylor Cox in "Cultural Diversity in Organizations."
Managing diversity well provides a distinct advantage in an era when flexibility and creativity are keys to competitiveness. An organization needs to be flexible and adaptable to meet new customer needs.
Heterogeneity promotes creativity and heterogeneous groups have been shown to produce better solutions to problems and a higher level of critical analysis. This can be a vital asset at a time when the campus is undergoing tremendous change and self-examination to find new and more effective ways to operate.
With effective management of diversity, the campus develops a reputation as an employer of choice. Not only will you have the ability to attract the best talent from a shrinking labor pool, you can save time and money in recruitment and turnover costs.
The campus will fulfill its role as a public institution by reflecting the diversity of the state as well as meeting the increasing demand to provide informed services to an increasingly diverse customer base.
How Well Do You Manage Diversity?
If you were able to answer yes to more than half the questions, you are on the right track to managing diversity well.
To address diversity issues, consider these questions: what policies, practices, and ways of thinking and within our organizational culture have differential impact on different groups? What organizational changes should be made to meet the needs of a diverse workforce as well as to maximize the potential of all workers, so that San Francisco can be well positioned for the demands of the 21st century?
Most people believe in the golden rule: treat others as you want to be treated. The implicit assumption is that how you want to be treated is how others want to be treated. But when you look at this proverb through a diversity perspective, you begin to ask the question: what does respect look like; does it look the same for everyone? Does it mean saying hello in the morning, or leaving someone alone, or making eye contact when you speak?
It depends on the individual. We may share similar values, such as respect or need for recognition, but how we show those values through behavior may be different for different groups or individuals. How do we know what different groups or individuals need? Perhaps instead of using the golden rule, we could use the platinum rule which states: "treat others asthey want to be treated." Moving our frame of reference from what may be our default view ("our way is the best way") to a diversity-sensitive perspective ("let's take the best of a variety of ways") will help us to manage more effectively in a diverse work environment.
You have a key role in transforming the organizational culture so that it more closely reflects the values of our diverse workforce. Some of the skills needed are:
It's natural to want a cookbook approach to diversity issues so that one knows exactly what to do. Unfortunately, given the many dimensions of diversity, there is no easy recipe to follow. Advice and strategies given for one situation may not work given the same situation in another context.
Managing diversity means acknowledging people's differences and recognizing these differences as valuable; it enhances good management practices by preventing discrimination and promoting inclusiveness. Good management alone will not necessarily help you work effectively with a diverse workforce. It is often difficult to see what part diversity plays in a specific area of management.
The Office of Affirmative Action, Equal Opportunity and Diversity is experienced in providing help with training and advice on the variety of situations that occur, tailored to your specific environment. Their website is www.aaeod.ucsf.edu.
To illustrate, the following two examples show how diversity is an integral part of management. The first example focuses on the area of selection, the second example looks at communication:
Fair vs. Same Treatment
Many people think that "fairness" means "treating everyone the same." How well does treating everyone the same work for a diverse staff? For example, when employees have limited English language skills or reading proficiency, even though that limit might not affect their ability to do their jobs, transmitting important information through complicated memos might not be an effective way of communicating with them. While distributing such memos to all staff is "treating everyone the same," this approach may not communicate essential information to everyone. A staff member who missed out on essential information might feel that the communication process was "unfair." A process that takes account of the diverse levels of English language and reading proficiency among the staff might include taking extra time to be sure that information in an important memorandum is understood. Such efforts on the part of supervisors and managers should be supported and rewarded as good management practices for working with a diverse staff.
Managing Diversity is Different from Affirmative Action
Managing diversity focuses on maximizing the ability of all employees to contribute to organizational goals. Affirmative action focuses on specific groups because of historical discrimination, such as people of color and women. Affirmative action emphasizes legal necessity and social responsibility; managing diversity emphasizes business necessity. In short, while managing diversity is also concerned with underrepresentation of women and people of color in the workforce, it is much more inclusive and acknowledges that diversity must work for everyone.
Consequences of Ignoring Diversity
Ignoring diversity issues costs time, money, and efficiency. Some of the consequences can include unhealthy tensions; loss of productivity because of increased conflict; inability to attract and retain talented people of all kinds; complaints and legal actions; and inability to retain valuable employees, resulting in lost investments in recruitment and training.
Human Resources Web site http://ucsfhr.ucsf.edu/
Employee Development & Training classes and workshops
Staff Diversity Program, Staff Equity and Diversity Services
Title IX Compliance Office
Campus ADA Coordinator (Americans with Disabilities Act)
Staff Internship Program
Employment, Employee Relations, and Labor Relations Units in Human Resources
LGBT Web site http://www.ucsf.edu/cge/lgbtr/
Center for Gender Equity Web site http://www.ucsf.edu/cge/
Office of Affirmative Action, Equal Opportunity, and Diversity http://www.aaeo.ucsf.edu/
Andre's purpose is to reconnect people to their Dignity and Honor in Being Human.