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Building the Case

Since the early 1990s evidence has been mounting to suggest that there are numerous benefits associated with the adoption of sound diversity management programmes by employers. You will need to understand the benefits for adopting such an approach, if and when you decide to start building the case for implementing a diversity management programme within your organisation.

Over the last number of years, a variety of researchers have detailed the benefits of adopting a diversity management approach such as:

• Improved performance/productivity (Agocs and Burr, 1996; Richard, 2000)
• Increased creativity/flexibility (Cox and Blake, 1991; Robinson and Dechant, 1997)
• Higher quality problem-solving (Cox and Blake, 1991; Hubbard, 1999)
• Improved understanding/penetration of markets (Cox and Blake, 1991; Robinson and Dechant, 1997)
• Increased staff morale and job satisfaction (Agocs and Burr, 1996)
• Improvements in staff retention/less absenteeism (Agocs and Burr, 1996; Robinson and Dechant, 1997)
• Less law suits (Robinson and Dechant, 1997)

Human Resource associations have also identified benefits of diversity management. According to the Society for Human Resource Management, the following are five key factors that make diversity initiatives important to businesses:

Diversity initiatives can:

• Improve the quality of your organisation's workforce and can be a catalyst for a better return on your investment in human capital.
• Capitalize on new markets since customer bases are becoming more diverse.
• Attract the best and the brightest employees to a company.
• Increase creativity.
• Increase flexibility, ensuring survival.

Source: http://www.shrm.org/diversity/businesscase.asp

In 2000 and 2001, Mi.st [ Diversity Consulting conducted a survey of business leaders throughout Europe and found that the four benefits of diversity most often mentioned were:

• Improved team effectiveness and cooperation (interpersonal)
• Increased productivity (individual)
• Improved customer intimacy (consumers and markets)
• Broader access to labour markets (recruitment)

Results from this survey were analysed and all the benefits of Diversity and Diversity Management were summarised in the following table:

Source:
Michael Stubor (2002): ‘ Corporate Best Practice: What some European Organizations are Doing Well to Manage Culture and Diversity'. In G. Simmons (Ed.), Eurodiversity: A Business Guide to Managing Difference, Butterworth-Heinemann, London

Alongside the benefits outlined above there are other background forces that drive the adoption of a diversity management approach by employers. Two common forces are described below:

Labour Force Supply Issues

The composition of the labour force in the EU is changing on an ongoing basis. Two of the most important changes in recent years are:

• The ageing of the workforce
• The enlargement of the EU giving rise to a larger presence of ethnic minorities

As a result, employers need to be able to successfully accommodate a more diverse range of employees. Click here for information on EU demographic statistics.

Costs of Discrimination Cases

Although, anti-discrimination legislation has now been introduced in a number of European countries, employees are still facing prejudices that circulate in the workplace. This gives rise to employees taking discrimination cases against their employer, which can be damaging for the employer in terms of negative public opinion and high costs. An effective diversity management approach should give rise to an environment that benefits all employees, where they feel valued and empowered and are enabled to reach their full potential. In such a positive environment it is highly unlikely that an employee would bring a discrimination case against their employer.

For examples of recent court cases please click here.

Footnote: References
Agocs C. and Burr C. (1996): Employment equity, affirmative action and managing diversity: assessing the differences, International Journal of manpower, Vol. 17, No. 4, pp30-45.

Cox T. and Blake S. (1991); Managing Cultural Diversity: implications for organizational competitivenes s, Academy of Management Executive, Vol. 5, No. 3, pp45-56.

Hubbard E. (1999): Diversity and the Bottom Line: Facts, Figures and Financials, Diversity Factor, Vol. 7, No. 4, pp29-33.

Richard O. (2000): Racial diversity, business strategy, and firm performance: A resource-based view, Academy of Management Journal, Vol. 43, pp164-177.

Robinson G. and Dechant K. (1997): Building a Business Case for Diversity, Academy of management Executive, Vol. 11, No. 3, pp21-31.