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Striving for a diverse workforce is a dominant issue for human resource professionals. Its evolution in human resources has given diversity a new face. But a simple definition of diversity is different for each organization. Today diversity in the workplace encompasses more than the traditional view that focuses primarily on gender and race. It has taken on a much broader definition. The changing demographics of the labor force and marketplace are making it necessary for companies to step up their diversity recruitment programs. According to the Society for Human Resource Management, leveraging workplace diversity is increasingly seen as a vital strategic resource for competitive advantage.
What is Diversity?
What is your organization’s definition of diversity? Today, there is more to diversity than just gender and race. It has evolved from anti-discrimination compliance to focusing on inclusion, and the impact on a company’s bottom line. Diversity in today’s workplace refers to racial minority groups, ethnic minority groups, women, older persons, persons with disabilities, persons of nontraditional sexual orientation, persons for whom English is a second language, and other nontraditional groups. According to one human resource generalist, another dimension of diversity even includes characteristics that influence our lives and our value systems. Some of these include geographic location, income, religion, recreational habits, educational background, work experience, parental status, and marital status. So, there is no one set definition. The definition of diversity depends on the organization and its stage of development regarding workforce diversity.
Why is Diversity Recruiting Important?
Diversity recruitment is good for business. Diversity recruiting is important to a company’s profitability. In today’s global economy, buying power rests in the hands of people from all walks of life. To appeal to this large customer base, companies need to hire people from all walks of life. By employing a diverse workforce, companies can tap into their specialized insights and knowledge about the marketplace. This is why it is becoming increasingly important for a company’s makeup to reflect the makeup of their customer base.
The labor force will be affected by the aging of the baby-boom generation-persons born between 1946 and 1964. Advantages to Having a Diverse Workforce Companies that diversify their workforces will have a distinct competitive advantage over those that do not. There are several predominant factors that motivate companies to have diverse workforces. Demographic changes that are affecting the labor pool and available talent will make diversity recruitment a growing factor in the coming years. Over the next 10 years it is hard to believe that North America and Europe are only expected to produce 3 percent of the world’s new labor force. The labor force will continue to age. The African American labor force is projected to grow by 17 percent from 2004 to 2014. absenteeism. The growth rates for diverse groups are projected to be faster than the rate for whites. while 75 percent of the new entrants will come from Asia. 57 percent of the labor force will be women and people of color by 2014. especially in the coming years. and low productivity Return on Investment (ROI) from various initiatives. the labor force of white men is only expected to grow by 7 percent during this period. Minorities are the fastest-growing part of the labor force. policies and practices Gaining and keeping greater/new market share (locally and globally) with an expanded diverse customer base 6) Increased sales and profits . with the number of workers in the 55-and-older group projected to grow by 49. What are some of these demographic changes that will affect the labor force in the coming years? The labor force is becoming more diverse. In contrast. The labor force of women is expected to grow by 11 percent during this period.1 percent. The workforce is becoming more global. reaching nearly 92 million. Companies will have to adjust to the changing demographic composition of the labor force to stay competitive in today’s marketplace.Diversity recruitment is also important if a company wants to build a quality workforce. As a result. companies are becoming increasingly concerned about how to retain older workers. only representing 43 percent of the labor force or 70 million by 2014. White men will be a minority. The Asian labor force is expected to grow at a comparable 32 percent. A recent report from the Society for Human Resource Management identifies six key reasons recruiting a diverse workforce should be part of an organization’s strategic goals and objectives: 1) 2) 3) 4) 5) Greater adaptability and flexibility in a rapidly changing marketplace Attracting and retaining the best talent Reducing costs associated with turnover. This is nearly 5 times the 10 percent growth projected for the overall labor force. With competition for talent growing. The Hispanic labor force is projected to grow by 34 percent from 2004 to 2014. The workforce is aging.
Use Referrals Referrals can be a powerful tool for diversity recruitment programs. a company can experience lower turnover once it has built a favorable reputation and a more positive employer brand. they are building a reputation for goodwill and establishing themselves as an “employer of choice. Diversity referrals work well when current and former employees can adequately market your organization. and will become even more challenging as demographic trends change the labor force. is only expected to increase by 140 percent. Positive community relations are another advantage of employing a diverse workforce. an organization needs to be prepared and take steps to help turn an average diversity recruiting program into a “shining star”. . For example. add to the stress of competition.1 trillion.Another advantage of having a diverse workforce is being able to utilize its knowledge when it comes to relating to different groups in the marketplace. immigration challenges. the retirement of the baby boomers in the next 10 years makes retention of older workers a key concern. When companies develop outside relationships or partnerships with minority communities and suppliers.S. and why someone might want to consider joining them. Asian Americans and Native Americans is expected to exceed $1. Imagine having a diverse workforce to help reel in the immense buying power of our future minority population. 2) Determine whether any employee demographic groups have more negative perceptions than others. by a gain of $1. There are four ways to improve the effectiveness of an employee referral program: 1) Find out what current and former employees are saying. both current and former employees are empowered with the information necessary to express why they work where they work. According to the Selig Center for Economic Growth. the purchasing power of minorities in our country will outpace that of whites in the next five years. Building and Maintaining a Diverse Workforce An effective diversity recruitment program can provide companies with a valuable competitive advantage. workers compared with other countries. or 242 percent! The buying power of whites. This way. in 2009. Competing for skilled and talented employees is challenging. In addition. This is becoming very important as purchasing power in the United States starts to shift in the near future. competition from other countries.5 trillion. This is more than triple the 1990 level. For these reasons. 3) Develop methods to communicate with employees and actively manage their perceptions. and fear of terrorism in the U. Hispanics. These positive external relationships help it to better attract the best talent. U. in comparison.S.” In the long run. Employee referral programs should routinely measure employee perception. 4) Persistently push out stories to employees that provide unique and compelling reasons why diverse individuals would want to work for your organization. To make the task more difficult.S. the combined buying power of African Americans. lower education levels of U.
Having a plan for building and maintaining a diverse workforce will give organizations an extra edge for when those changes come. A program that recruits from part-time schools. About 5 to 10 percent of all individual hiring managers’ pay should be based on diversity recruiting and retention results. Employees are better able to assist the organization in their efforts to identify key diversity candidates. Once these internal objectives are reached. Companies can establish ties with the student chapters of minority professional organizations. and phased retirement are appealing to older workers. A company can make itself more appealing to its diverse workforce by increasing employee satisfaction. Employees can be given a small reward for just identifying the names of diversity candidates.Offer Incentives. community colleges and other post-high school educational programs can help pull in more minorities. with the idea of eventually hiring them to participate in a management training program. Relationships with community and philanthropic groups also help companies with their long-term diversity efforts. The success of diversity recruiting could also be tied to senior management pay. Components of a Successful Diversity Recruitment Campaign Establish Clear Goals A successful diversity recruitment campaign starts with clear goals. Connect With External Diverse Professionals. The goals of a diversity recruitment program must be communicated throughout the entire organization in an effort to achieve both internal and external objectives. companies can build other outside relationships with minority organizations. One way is to sponsor scholarships for school minority groups such as the student chapter of the National Black MBA Association. a company must make sure that goals are tailored to the needs. Training is one good way to accomplish this. Recognition. For a diversity program to work. flexible work arrangements. issues and goals of the organization and its core values and priorities. Organizations and Communities In addition to building college relationships. Rewarding managers for great diversity recruiting is a must. as well as the director of recruiting and the vice president of human resources. All levels of employees should be made aware of the importance and function of diversity recruitment program objectives. Establish College Relationships Establishing relationships with colleges is another good way to diversify the workforce. For example. and Rewards Few companies are offering rewards for identifying or hiring diverse people. it makes it easier to reach external goals. Bringing in students as interns is another effective strategy. benefits and workplace programs such as reward initiatives. .
Build the Business Case for Diversity Powerful and effective arguments need to be made for excellence in diversity recruiting. providing unique workplace benefits. For a diversity program to work. pointing out the many advantages of having a diverse workforce. According to an article by the Society of Human Resource Management (SHRM). Employees and management need proof that diversity is a business issue and has strategic importance to organizations. an organization must build a “business case” or economic case to managers for having a diverse workforce. and use your recruitment website to post your company’s core values and profile individual employees. Get the word out that your company is a good place to work by using referral programs.or women-based events. Senior management must be committed to the vision to provide strength to the program and must be held accountable for results. because metrics provide a true measurement of why diversity matters. Minorities need to be shown that a company is a good place for them to work. Market research can help an organization understand “who” it is trying to sell to. Use Metrics Using data about their workforce can help companies track results and identify diversity management concerns. use award programs to recognize employees.” Use Market Research Human resource professionals should make use of the latest market research to diagnose and improve their existing diversity recruitment campaign. . sponsoring minority. and identifying their job selection decision criteria. They can also help support the business rationale for diversity. “creating a culture of inclusion requires leadership commitment throughout the entire business enterprise. Market research can benefit diversity recruitment in two important ways: identifying candidate demographics. Market research also helps identify what these candidates expect in a job through the use of surveys and focus groups. Metrics help identify strengths and weaknesses in a diversity recruitment campaign. Build Diversity Message into Company Employment Brand Another very important way to make diversity recruiting more effective is to build a diversity message into your recruitment brand. Top management must support diversity for reasons more than just avoiding legal issues or to be politically correct. They have to be made aware of the business and monetary impact that diversity recruiting can have on the bottom line of an organization. and their basic demographics.
Once these intangibles are converted into monetary values. measuring results is tough because the necessary data needed to measure diversity has not been collected. For some. For example. companies can determine their Return on Investment (ROI). These include: Attitude survey data Organizational commitment Climate survey data Employee complaints Grievances Discrimination complaints Stress reduction Employee turnover Employee transfers Customer satisfaction survey data Customer complaints Customer response time Teamwork Cooperation Conflict Decisiveness Employee Tardiness Communication . Companies can establish broader organizational metrics in the following six categories: • • • Demographics Organizational culture Accountability • • • Productivity/profitability Benchmarking Programmatic measures Measuring the ROI of diversity There are several intangible variables linked to diversity results that can be converted to monetary values.Using HR Metrics to Track Diversity Recruitment According to a recent survey by The Conference Board. diversity programs usually produce intangible results such as improved communication or improved teamwork. Effectively measuring diversity initiatives has been a struggle for many companies. over three-fourths of human resource professionals indicated that they expect their use of human capital measures to help meet strategic goals will increase over the next three years. Following are traditional tools used to measure diversity: Equal employment opportunity and affirmative action metrics Employee attitude surveys Cultural audits Focus groups Management and employee evaluations Training and education Customer surveys Accountability and incentive assessments Cooperation Conflict Decisiveness Employee Tardiness Communication Research shows that broader measures are likely to be more comprehensive and can better demonstrate the business impact of diversity management.
In fact. the average investment in this case is $25. Also. In contrast. recruiters are still challenged to find enough people to fill certain positions. BCR= diversity initiative benefits divided by diversity initiative costs. Among diverse groups. diversity staffing is often mistaken for affirmative action or even as reverse discrimination. only 12 percent of Hispanics and 18 percent of Blacks age 25 and older have a Bachelor’s degree or higher. fewer are enrolling in high-demand technical college programs such as engineering and other sciences.000 ($10.There are five basic steps for converting intangible results into monetary values: 1) 2) 3) 4) 5) 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 The Diversity Return on Investment (DROI) is calculated by using the diversity initiative cost and benefits to get the Benefit/Cost Ratio (BCR). The average ROI = annual savings/average investment ($10. Asians are generally educated to a higher level than other minorities. The measurable value of the program is determined to be three years.000 ($50.000 per year). During a three-year period. Barriers to Success A significant barrier to the success of a diversity recruitment campaign is the lack of knowledge about the advantages of having a diverse workforce in the first place. although Blacks are better-educated today and are much more aware of opportunities than they were even 10 years ago. Another barrier to the success of a diversity recruitment campaign is that the educational levels of some minorities are historically lower than other demographic groups. Instead.000) = 40 %. Since the average book value is about half the cost.000 ÷ 2). the program will have a net savings of $30.000. Another barrier to success is the myth that diversity staffing has never been proven to work. Workplace diversity is not usually seen as a means of increasing sales and profits. 49 percent of Asians age 25 and older have a Bachelor’s degree or higher. This ratio is also called a Cost-to-Benefit ratio. Overall. The DROI calculation is the net benefit of the diversity initiative ÷ the initiative costs: DROI% = (net diversity initiative benefits ÷ initiative costs) x 100.000/$25. This is the same basic formula used to evaluate other investments in which the ROI is reported as earnings divided by the investment. Here is an example: the initial cost of a diversity awareness program may be $50. Consequently. . 31 percent of non-Hispanic whites age 25 and older have a Bachelor’s degree or higher.
a company needs to communicate that it really is a great place to work. . that definition should be used to create specific diversity program goals and be communicated to the entire organization. Metrics can also help prove that diversity recruitment is important to a company’s bottom line. Conclusion The definition of workforce diversity is still evolving. It is important for the entire workforce to realize that there are more than just legal reasons why a diverse workforce is advantageous. At the same time. and San Francisco. Hiring Asians to more rural areas or even small cities is challenging because they live primarily in coastal cities. Using metrics can help an organization track progress of a diversity recruitment program and find strengths and weaknesses. To help solve this problem. and include its diversity message in its employment brand. Los Angeles. Adjusting work polices to allow more telecommuting and virtual work can help give companies that leading edge in recruiting a diverse workforce. Minorities tend to live in urban areas. their definition of diversity will be different as well.Even just plain geography can be a barrier to recruiting diverse candidates. Determining your company’s definition of diversity is a first step. Providing a strong business case to senior management that diversity has direct impact on profit is imperative. and are at different stages in developing their workforce. Because companies all have different needs to fill in terms of diversity. some companies have set up small offices in urban areas so that employees who prefer to live in the city can still be employed by them. The greatest gain in Asians over the past decade is in cities such as New York. Once an organization has decided what diversity means. It is important to make clear the purpose and goals of a diversity recruitment program so a company can assess successes and effectiveness of the program. One more thing that can be a barrier to the success of striving for a diverse workforce is lack of clear goals.