The Business Case for Diversity
By Annette Merritt Cummings
The diverse workforce
There was a time when the words "diversity", "globalism" and "multiculturalism" were simply viewed by some business leaders as extensions of politically correct language and thought. Yet, by 2005, things have clearly changed: The world is growing smaller, and both the United States and countries worldwide are noting an influx of new-wave immigrants. These burgeoning populations are changing the demographics of their new homelands, and, as a result, diversifying consumer markets in those regions.
In response, corporate leaders have increasingly begun to invest in consultants and strategists who can help them reach out to their new audiences, and thus, broaden their opportunities to sell product. The experts, however, aren't telling their clients anything revolutionary. Rather, they are advising them of a credo that some human resources and organization development professionals have long held: never underestimate the bottom-line value of a diverse workforce.
So, contrary to popular assumptions, it is neither altruism nor a fear of legal reprisal regarding quotas that precipitates the growing interest in workplace diversity. Rather, the business community has been met with a formidable strategic business planning challenge: how to acknowledge, strategize and capitalize on the changing populations in their midst. The solution? To find employee talent that is knowledgeable, ethnically rich and culturally aware.
The rise in spending power
In America today, Latino spending power is expected to reach almost 10 percent of the overall nation's spending power in five years, up from about 5 percent in 1990, according to the Selig Center for Economic Growth at the University of Georgia. It's a heady statistic when one considers that the Latino "community" isn't comprised of a homogeny of consumers who have the same tastes and interests. Rather, Cubans, Puerto Ricans, Mexicans and other groups in the United States who all fall under our simplistic category of "Hispanic", have widely varying traditions, levels of acculturation and brand loyalties. This makes it impossible to advertise to them successfully using one pat branding message or colorful campaign.
The same predicament our businesses face in getting the attention of Latinos, applies, for example, to Asian Americans, whom the Selig Center predicts will have a spending power of $526 billion by 2008, up from $334 billion in 2003. Looking within their ranks, organizations are realizing that their workforce is truly the front line for conceiving ways of selling their wares to diverse consumers. Having a homogenous makeup of professionals, therefore, with the same shared ethnicities, race and background, decreases the likelihood of having the multicultural savvy needed to survive.
The Supreme Court rulings
An obvious link between business and diversity has emerged front-and-center in American life, so much so that our highest court, the Supreme Court, recently acknowledged as much in its rulings in the cases of Gratz v. Bollinger and Grutter v. Bollinger. The court's decisions centered on the University of Michigan's Undergraduate and Law School admissions policies and whether the use of race in those policies is constitutional.
Frank Scruggs, shareholder at Greenberg Traurig, and a labor and employment attorney in the firm's Miami office, says that in deciding those cases, the court had to wrangle with whether "achievement of a racially and ethnically diverse student body represents a compelling governmental interest that warrants race-conscious admissions decisions," and, Scruggs adds, "whether the University of Michigan's policies are narrowly tailored to achieve such interest."
The ruling handed down was a mixed blessing of sorts. On the one hand, the Justices ruled that race could indeed be used as a consideration in admitting students; on the other hand, the court also surgically narrowed the way race can be factored in making those admissions decisions.
Scruggs puts it this way: "Because activists have expressed their determination to challenge diversity initiatives as "reverse discrimination", companies will want to use the guidance provided by the Supreme Court in the Michigan admissions cases to strengthen their programs."
In its decision, the Court wrote, "major American businesses have made clear that the skills needed in today's increasingly global marketplace can only be developed through exposure to widely diverse people, cultures, ideas and viewpoints." Hearing the philosophy--and sound business sense--of diversity being echoed by our highest court leaves little room for second-guessing the wisdom of whether diversity is a best practice.
In conclusion
In the last 20 years, the notion of workplace diversity has transformed itself from a legal imperative to a mode of survival. Going forward, as American-based businesses stake their claims on the global marketplace and on the ever-transforming populations on their home turf, those companies that have moved with the times--and amended their notions of recruitment and hiring--will be the ones to become worldwide success stories.
If pragmatism initially led the way for workforce diversity to flourish, a touch of idealism, along with good corporate citizenship, will continue to fuel it in the halls of responsible businesses across the globe.
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