National Survey Reveals Workplace Diversity Is Critical in Attracting and Retaining Talent

Capital H Group
October 1, 2009 | COMMENTS

Diversity in the workplace continues to remain an important business driver and priority for many Fortune 500 companies. In a Harris Interactive survey commissioned by Capital H Group, 95% of those surveyed say that senior management views creating a diverse workforce as a major goal.

Ninety-three percent of those surveyed say that diversity is treated as a key business driver, impacting business goals, strategies and results at their organizations. A vast majority of respondents (91%) report that their organizations set clear expectations of what is required regarding diversity and inclusion. Critical in today's competitive global marketplace, 92% say their company's current diversity and inclusion practices have helped their organization's ability to attract and retain talent. And at least 96% of respondents believe their perspective and background is respected and valued by their manager, senior leadership, peers, and direct reports.

Defining Diversity

A high percentage of respondents say they manage or lead a diverse team (97%) and that team diversity was beneficial to performance (69%); however most respondents appear to narrowly define diversity. When asked in what ways their team is diverse, 31% cited only gender and race/ethnicity. In addition:

• 61% mentioned only primary dimensions of diversity (gender, race/ethnicity, age, religion, sexual orientation, and disability)
• Only 6% mentioned background/experience, 3% said personality, 3% said workstyles
• No respondents mentioned talents, skills, or abilities (which are also key components of a diverse and inclusive workplace)

Non-diversity ranking companies were more likely than diversity companies to define diversity in their team as gender/race only—38% vs. 25%. White respondents were more likely to say gender/race only compared to people of color (36% vs. 23%); people of color were much more likely to provide an expanded definition of diversity than whites (60% vs. 30%). And finally, there were clear differences between position levels with respect to the definition of diversity, citing gender/race only: senior management 19%, middle management 35%, and administrator/office manager 60%.

“We are not surprised that many survey respondents define diversity pretty narrowly. That is the traditional thinking about diversity and the starting point for these efforts,” says Capital H Group managing partner Keith Swenson. “We encourage and work with companies to broaden their definition and awareness of diversity, while building solutions that foster an inclusive workplace. The results are much more impactful.”

Benefits of a Diverse Team

When asked about the benefits of having a diverse team, respondents said:

• Thinking about issues from different viewpoints (36%)
• Gathering fresh perspectives (21%)
• Generating insight of various customer relationship strategies (19%)
• Learning about different lifestyles/cultures (12%)

Diversity Inc. respondents were slightly more likely than those from non-diversity companies to say “gathering fresh perspectives” was the biggest benefit (28% vs. 14%). “The benefits of a diverse workforce are almost endless—they enable companies to increase innovation, recruit top-notch talent, and better connect with customers, to name a few,” explains Wake Forest University Dean of Business and former chairman and CEO of PepsiCo Steve Reinemund. “I saw this day in and day out during my 23 years at PepsiCo and we have incorporated this key principle in business education at Wake Forest today.”

Evaluating and Improving Diversity Efforts

Sixty three percent of those surveyed said that there are elements of their performance review explicitly tied to diversity and/or inclusion goals. A higher percentage of respondents from diversity companies than from non-diversity companies say their performance review is tied to D&I goals (70% vs. 56% respectively).

“Ideally if the vast majority of respondents say diversity is a major goal, a key business driver and that they know what is expected of them from a diversity and inclusion standpoint, we should see a higher percentage of people being evaluated against these metrics,” continues Swenson. “This type of measurement and reinforcement are key to achieving powerful business results.”

When asked what senior leaders should do more of the most common answer was lead by example (73%) compared to acknowledge successes (68%); reward compliance (54%); clearly define diversity and inclusion goals (50%); and offer more training (47%).

Respondents from diversity and non-diversity companies viewed “lead by example” as equally important.

“As a former CEO, I could not agree more about the importance of leaders setting the tone. The best diversity strategies will not be successful if they are not followed and fully supported by leaders in a company,” notes Reinemund. “This was part of the culture at PepsiCo and diversity and inclusion initiatives were integrated at every level in the organization.”

Reinemund's unparalleled commitment to diversity at PepsiCo has been documented by The Harvard Business Review as a business case: “Meeting the Diversity Challenge at PepsiCo: The Steve Reinemund Era.”

Capital H Group is a management consulting firm in Chicago. For more information, visit www.capitalhgroup.com.