The measure of success

In the final article in their diversity series, Professor
Amin Rajan and Sharon Harris identify the bottom-line impact of having a
diverse workforce

Our survey of the workforce diversity policies of 500 UK employers has
revealed that it is difficult to isolate the business benefits of a diverse
workforce, because such policies form just one part of a business strategy.
However, qualitative assessment in our research has revealed how organisations
have benefited from such policies. These are:

– Reduced recruitment costs

– Increased employee motivation

– Growth in new business

– Innovation through new ideas.

Other benefits are also believed to be in the pipeline for the organisations
surveyed, and by their very nature, they can only materialise over a longer
period. These include:

– Greater corporate resilience and effectiveness Life experiences of women,
ethnic minority groups and the disabled – acquired through discrimination or
challenging circumstances – are believed to equip them better to cope with
change and stay ahead of it

– More responsive business cultures The new initiatives seek to shift
management attitudes from being inward looking to outward looking, from
backward looking to forward looking. Old attitudes are at variance with new
market realities.

Overall, around 54 per cent of companies have achieved one or more of their
targeted benefits. Also, the HR-related benefits have been the first to come
through, with business-wide benefits.

The examples are illuminating.

– A retail bank markedly increased its share of ethnic minority customers by
appointing tellers and managers to reflect the make-up of its local customers.
Some managers also participated in designing a successful national marketing
campaign aimed at recruiting small businesses run by minority groups. Its
success has duly galvanised its competitors to follow suit

– A motor component supplier has experienced a two-fold increase in new
ideas from the shopfloor, ever since its managers were retrained to acquire a
more engaging style with respect to its diverse workforce. These ideas have
resulted in faster line speeds, less defects, lower inventories and higher
employee productivity. Like its principal customer, Toyota, the firm has now
created a fast-track process for capturing new ideas, taking them to concept
proof stage within three months, implementing the ones that pass the stage and
banking the rest. Its employee retention rate has also risen by 20 per cent,
although some allowance must be made for difficult general economic conditions

– A nationwide recruitment agency won a big government contract because it
had the diversity of staff to support and mentor various disadvantaged,
unemployed young people into work. It is now also involved in helping
legitimate asylum seekers get on the job ladder and develop life skills that
help them to be integrated

– A small management consultancy has become an important player in a supply
chain that provides consultancy services to public bodies; partly because it
meets the Government stipulations on diversity on a scale other players in the
chain do not, and because it has a diverse workforce that has superior
relationship management skills. Its immediate clients are the ‘big four’
accountancy firms and IT companies who run major outsourced contracts for
public bodies. Its workforce has an even gender mix and represents 15 ethnic
groups. The consultancy is also used by larger clients in their business
pursuit teams.

Measuring and observing

The pragmatic attitude to diversity benefits, as illustrated above, is no
less evident in the ways that companies have tried to assess them. There is
ample recognition that because the nature and timing of benefits may vary,
assessment should measure what is measurable and get a gut reaction for the

A number of tools are used to monitor the results (figure 2 above). Some rely
on gut reactions of customers, suppliers, employees and shareholders; others
rely on quantifiable measures. What is measurable gets measured, what is
observable gets observed.

Overall, though, the study concludes that on both sides of the Atlantic, the
new-found interest in diversity is no fad. Its benefits stem from a more
talented workforce that has generated new ideas, met customer needs and created
new business opportunities in a high-productivity environment.

It has also enhanced corporate image for progressive employers, and reduced
recruitment costs through higher retention and motivation. Not least, it has
helped organisations to develop a presence in different national cultures and
to build external alliances and networks.

This article is based on Harnessing Workforce Diversity to Raise the
Bottom Line. This report is the subject of a conference in London on 7 October,
with business leaders from Shell, HSBC, Sainsbury’s, Unilever and Deutsche Bank
as keynote speakers. For further details, contact Jenny Latham on 01892 526757.

Amin Rajan is the chief executive of CREATE and Sharon Harris is the UK
head of diversity at Deutsche Bank

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