Reference no: EM13860303 , Length: word count:1500
Key benefits of implementing a diversity and inclusion programme include improved bottom , competitive advantage, superior business performance, employee satisfaction and loyalty.
1.Benefits of diversity: profit, performance, and talent Yet companies will not seek diversity unless this business competency results in increased profit and metrics that substantiate the necessity to expand the emphasis on diversity (Diversity Inc., 2002). Irrefutable measurable benefits can be derived from properly implemented policies to promote diversity (Jamrog, 2002). The most evident measurable benefits are improved bottom line, competitive advantage, superior business performance, employee satisfaction and loyalty, strengthened relationship with multicultural communities, and attracting the best and the brightest candidates.
Improved bottom line. Diversity initiatives benefit companies' bottom line and help them maintain a competitive edge, according to a 2001 survey by the Society for Human Resource Management and Fortune magazine (SHRM, 2001).
The survey was mailed to 839 human resource (HR) professionals at Fortune 1000 companies and to the organizations on Fortune's list of the 100 best US companies to work for.
Respondents were asked to indicate how diversity initiatives have affected 20 different issues relating to the bottom line. The respondents (n = 87) to the bottom-line question indicated that diversity efforts make fiscal sense for their companies. The top five positive impacts on the bottom line were improving corporate culture (79 percent), helping recruit new employees (77 percent), improving relationships with clients (52 percent), higher retention of employees (41 percent), and decreasing complaints and litigation (41 percent) (SHRM, 2001) (see Table I).
Competitive advantage. "Recruiting and retaining people of diverse backgrounds who can share a common set of values...and approach to business - is a priority for today's competitive organization" (McCormack, 2002, p. 1). Human resource professionals agree. Nearly 91 percent of respondents in the SHRM study believe that diversity initiatives help the organization keep a competitive advantage through improving corporate culture (83 percent), improving employee morale (79 percent), higher retention of employees (76 percent), and easier recruitment of new employees (75 percent) (SHRM, 2001).
Superior business performance. A third benefit of a commitment to diversity is superior business performance. Diversity in gender, race, and age on senior management teams is correlated with superior business performance in worker LODJ 25,1 74 productivity, net operating profits, gross revenues, total assets, market share, and shareholder value (Bureau of National Affairs, 1998). Diversity drives creativity and performance, insists diversity expert Robert Hayles. "On complex tasks, with equally skilled leadership, diverse teams will out perform teams that aren't diverse" (Ideas and Trends in Personnel, 1997, p. 179).
Attract the best and the brightest. Is it possible today to find candidates to achieve the desired diversity? Women and ethnic minorities will represent approximately 70 percent of all new entrants to the US workforce by 2008 (US DOL, 1999).
Top candidates will work for companies that aggressively recruit through programs for multi-ethnic students, affiliations with multicultural organizations, and active campaigns on job sites aimed at diverse candidates. Promoting diversity attracts talented workers, reduces turnover, and unleashes creativity (Silverstein, 1995; Diversity Inc., 2002).
Employee satisfaction and loyalty. Attention to diversity increases employee satisfaction and loyalty (McBride and Bostian, 1998). Companies with good track records of equitable opportunities will find it easier to recruit and retain talented women and ethnic minorities, who prefer to work where they can % responding Initiative n ¼ 87 Improves corporate culture 79 Improves recruitment of new employees 77 Improves client relations 52 Higher retention of employees 41 Decreased complaints and litigation 41 Enables the organization to move into emerging markets 37 Positively affects profitability indirectly 32 Increases productivity 32 Positively affects profitability 28 Maximizes brand identity 23 Has not impacted bottom line 7 Increased complaints and litigation 1 Negatively affects profitability 0 Lower retention of employees 0 Impedes the organization from moving into emerging markets 0 Deteriorates client relations 0 Deteriorates corporate culture 0 Hinders recruitment of new employees 0 Negatively affects profitability indirectly 0 Decreases productivity 0 Detracts from brand identity 0 Other 0 Note: Percentages will not equal 100 percent as multiple responses were allowed Source: Adapted from SHRM/Fortune survey (2001)
Table I. How diversity initiatives have impacted the bottom line Leading the diverse workforce 75 expect to advance (LDI, 2002; Catalyst, 2001; Larson, 2002). If new women and minority hires see no one who looks like them has ever made it into upper management, they will conclude that they have to go elsewhere for advancement (Gardenswartz and Rowe, 1998; Lewis, 2002). Strong CEO and upper-management