The Benefits of Diversity

Organization Behavior

The Benefits of Diversity

Affirmative action has been the center of many heated debates for decades now. Affirmative action policies are used in the United States to give advantages to racial minorities in areas of education, employment, health care, or government funding. These "minorities" are underrepresented groups in society, especially when defined by race, ethnicity, or gender. Until the mid-1960's, legal barriers prevented blacks and other racial minorities in the United States from entering many jobs and educational institutions. Although women were rarely legally barred from jobs or education, many universities would not admit them and many employers would not hire them. The Civil Rights Act of 1964, which prohibited discrimination in public accommodations and employment, was the first modern legislation to address these barriers. A section of the act known as Title VII, which specifically banned discrimination in employment, laid the groundwork for the following development of affirmative action (Diversity Guidlines). As the view of management, I am in favor of affirmative action because I believe diversity comes with many benefits in the workplace. Diversity in the workplace can reduce lawsuits, increase marketing opportunities, recruitment, creativity, and business image (Esty). In an era when flexibility and creativity are keys to competitiveness, diversity is critical for an organization's success.

The business benefits of a diverse workforce are well known. Organizations that employ people from a wide variety of backgrounds are known to be productive and happier (Kiely). Quantitative measures of productivity include output quality, output quantity, and the time needed to complete a task. Greater output increases cost per unit, which in turn increases profits. Happier workers will raise the companies overall moral. Happy workers will drive down the turnover rate, and cost can be cut on training and development cost of new employees, as well as recruiting cost due to unnecessary turnover.

Diverse workforces are more innovative (Kiely). Greater innovations produce new products ideas, new operational ideas, and new marketing ideas. Innovation helps your company grow and expand as business evolves with new tools and technology to give a competitive advantage. Innovation comes from unique and critical thinking. Diversity helps takes the ideas of different age groups, genders, and ethnicities and brings them together to complete an idea or project.

Diversity is also designed to help you increase effectiveness in recruiting and supervising staff, and to maximize the benefits for people working in a diverse environment (Cartwright). It will help your organization prevent discrimination by learning while creating the most effective workplace possible. Diversity in the workplace is designed to assist managers, supervisors and recruiters by increasing their awareness about the benefits of diversity and providing practical solutions and information that can be applied in the workplace.

To measure how diversity is affecting a companies hiring and retention programs, a firm can compare the turnover rate of women and minorities to men. They can then compare this turnover rate to previous existing year's trend line. A firm can also take note on the percentage of mothers who return from maternity leave. Not only will effective recruiting reduce training and recruiting cost, but it will also reduce expenses and lost revenue due to inexperience of new employees on the job.

Buying power, particularly in today's global economy, is represented by people from all walks of life. These include different ethnicities, races, ages, abilities, genders, sexual orientations, etc. To ensure that their products and services are designed to appeal to these diverse customer bases, companies must hire people to whom they are marketing too. These employees can bring specialized insights and knowledge, as well as innovative marketing tactics. Companies who interact directly with the public are finding increasingly important to have the makeup of their workforces reflect the makeup of their customer base (Sonnenschein).

In today's global market, diversity is a must. Traditional barriers are being broken down, and for many companies cross border trade is essential for the company's success and growth. A decade ago Japan, Europe and North America were responsible for over 80% of global commerce, but new markets are opening up throughout the world and these have brought increased opportunity and also competition (Murray). In addition, rapid developments in

technology such as the Internet have made new markets accessible to even the smallest of companies. The growing markets of Latin America, Asia and Central and Eastern Europe are now playing an ever more important role in global buying, selling and manufacturing. Diversity within a company can help the firm better understand the culture, customs, and the way of doing business internationally. Customers also prefer to do business with a workforce that which they can identify, and that have a strong commitment to their community.

A company is also encouraged to adopt diversity programs to stay out of legal trouble. Many companies are under legislative mandates to be non-discriminatory in their employment practices. Non-compliance with Equal Employment Opportunity or Affirmative Action legislation can result in fines and/or loss of contracts with government agencies (Diversity Guidelines). In the context of such legislation, it makes good business sense to make use of a diverse workforce. In 1996, Texaco agreed to allocate $35 million for a task force to implement changes in their human resources programs after being sued for racial discrimination. The plan included revising company recruitment and hiring procedures to reflect diversity in the workforce, focusing on career development and retention of current employees, and increasing the number of women, and minority owned business partners. (Diversity at Work)

There are documented cases of where diversity greatly benefited business. In the early 1980s, a group of women at Reebok complained at the fact that they could not find a good aerobics shoe. Listening to that complaint, Reebok began

marketing aerobics shoes, and within two years went from a $12 million-a-year shoe company to a $3 billion powerhouse. Since then, the company has recognized the importance of diversity, making it a corporate priority. CEO Paul Fireman said that in order to become diverse, a company must find people with different stories to tell at every level of employment, and then make room for them to talk. Diversity, he has said, does not