Most companies in the US now understand the benefits of a diverse workforce, although many still lack the infrastructure to attract and retain one. But is diversity a liability or an asset? asks Pepi Sappal
Imagine an organisation filled with people of all generations, colours, cultures and accents, where every individual's background, sexual orientation and family circumstances are accepted, valued and catered for. Although such workplaces are rare, many companies are striving to become "diversity friendly", especially in the US.
When you look at the figures, it's easy to see why. In the US, minority groups alone spend more than $650bn. A survey carried out by US-based Internet research firm Harris Interactive Inc and marketing firm Witeck-Combs last year, put gay spending power at $450bn annually in the US. That's roughly the same amount as the country's 33 million Latinos are expected to spend this year. If you add to that the spending power of the retired population plus the nation's millions of disabled, it certainly makes a compelling case for investing in diversity. If companies want a share of this pie, then their talent must represent this consumer base.
"The best way to do that is by recruiting a diverse workforce that mirrors your customer base," says John Brock, COO of Cadbury Schweppes. "A diverse workforce is also essential in a global economy. It is the best way to expand into new markets and stimulate new business ideas, as well as improve customer relations. By managing this diversity effectively, we get a better understanding of our customers and do well in our markets all over the world. And that's a significant competitive advantage."
Organisations that have invested in diversity initiatives have reaped the benefits. Take the Union Bank of California (voted the No 1 Best Company for Minorities in 1999 by Fortune magazine) - its stock appreciated at a 34% compound rate for the past five years. In fact, Fortune's Top 50 best companies for minorities as a whole actually outperformed the S&P 500. No wonder other organisations are following suit.
But companies are not pursuing diversity solely because of bottom-line benefits. Demographics have also influenced the increasing take-up of diverse candidates. Given that minorities will a