Does it pay to invest in diversity?
It’s a notion that many, especially in the human resources world, take for granted, and yet it also continues to be hotly debated.
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“Measuring diversity’s value remains an elusive task,” read a headline in the Society for Human Resource Management’s January newsletter. And Workforce Management’s “Dear Workforce” mailer tackled the question this month: “Can you calculate the ROI of diversity?”
“We have not seen a valid tool for accurately measuring the return on investment in diversity,” was the reply. “That is not to say that there’s no business value in managing a diverse work force well; it’s just that no reliable method has been developed to measure that value definitively.”
Interviews with local HR directors suggest Rhode Island employers don’t have a measure of diversity’s ROI, either. But some say it’s not necessary, because it is common sense to recognize the correlation between relying on the ideas of people from different ages, genders and ethnic backgrounds and fiscal success in the marketplace.
“Our success as a company depends on us working together no matter what our differences are,” said Kyle Adamonis, senior vice president of human resources at Taco Inc. in Cranston. “We would not be as creative. People bring a lot to the table through their differences.”
Taco’s work force is 59 percent white, 26 percent Asian, 10 percent Hispanic, and 5 percent black and other races. (For comparison, the 2000 U.S. Census found 81.9 percent of Rhode Islanders were non-Hispanic white, 8.7 percent Hispanic, 4.5 percent black and 2.3 percent Asian.)
Being diverse provides financial benefits because of Taco’s global clientele, Adamonis said. The company works with companies in Mexico and Brazil. Having employees that speak the language improves communication and makes Taco more competitive.
Brandon Melton, senior vice president for human resources at the Lifespan health care network, has a
similar view. For hospitals, he said, it is important to employ a staff that is consistent with the patient population. “When patients are comfortable, they will want to come back,” he said.
Lifespan started campaigning to recruit a more diverse professional work force about two years ago in response to a rising numbers of black and Hispanic patients, Melton said. The company reached out to 28 community-based organizations, including the Urban League of Rhode Island and the Hispanic American Chamber of Commerce of Rhode Island.
“We reached out to them and said, ‘Send us your clients,’ ” Melton said. The company also contacted 48 local elementary, middle and high schools in an attempt to recruit future employees at a young age. About 60 Hispanic and African-American high school students participated in a summer youth employment program sponsored by Lifespan.
Since the diversity campaign started, Lifespan has increased the number of professionals from its target ethnic backgrounds by 39 percent, Melton said. Though the company has not tried to calculate the ROI of diversity, Melton said he may have those metrics within a year.
“It’s not easy to do,” Melton said. “But it’s not impossible to do. It can be done.”
Elissa O’Brien, Rhode Island director of the Society for Human Resource Management, said shifts in the labor force such as the aging of baby boomers make it necessary for employers to embrace diversity to ensure they’ll have the workers they need.
“Companies need to pull resources from diverse sections,” O’Brien said. “Part of a way to do that is not only getting them in the door, but making them feel comfortable and welcome.”
On that front, results of a Gallup Poll co-sponsored by the Human Resource Society, Kaiser-Permanente and United Parcel Service unveiled last December suggest that diversity does pay.
The poll included seven questions gauging employees’ satisfaction with their companies’ efforts to promote diversity and protect against discrimination. The results showed a close correlation between that and two key factors: overall satisfaction and loyalty.
Among companies in the top one-third on diversity, an average of 61 percent of workers said they were “extremely satisfied” with the company, compared with 21 percent for those in the lowest third. Similarly, among workers who “strongly” agreed that their company head was committed to diversity, 65 percent said they’d recommend their company to others, compared with 29 percent of those not convinced the company head was committed to diversity.
“These data make it pretty clear that it makes good business sense to have operable diversity efforts in organizations,” said Gallup Government Division Partner Max Larsen.
One way to provide a comfortable work environment is acknowledging the religious holidays of different cultures and allowing employees of different religious backgrounds the option to take that day off, O’Brien said. Offering health benefits to domestic partners is another way to incorporate diversity into corporate culture.
Planning corporate diversity events also helps promote the importance of understanding diversity. Taco’s diversity program coordinates a cultural day for employees to gather and place dots on a map of the world to mark the global heritage of its employees.
Though some employees thought it was silly, Adamonis said, others wrote to her and told her it made them understand and appreciate the diversity in their workplace.
“It all ties into return on investment,” O’Brien said. “You have more talented folks coming in if you are valuing diversity. … When you are open to other people’s ideas and perspectives, you make a better product and provide better services when serving multiple demographics.”
