The diversity advantage

by 07 Aug 2007

Companies that embrace diversity open themselves up to a new source of competitive advantage, writes Allan Schweyer

Diversity used to mean quotas and targets, it used to centre on compliance and focus on gender, race and ethnicity. Today, diversity is a competitive advantage, it is focused on inclusiveness as opposed to tolerance and affirmative action. It includes most of the population in the sense that it recognises the differences in talent –from age to lifestyle and from contingent to traditional.

In 2004, Dr Richard Florida unveiled extensive research that compared thriving cities in the US to those that are stagnant or in decline. Among his findings were that successful cities, including Boston, San Francisco and Austin, have one consistent trait in common – they tend to be more open and more tolerant of talented individuals who are not part of the mainstream culture for whatever reason.

Among Florida’s more celebrated work is his ‘gay index’. By overlaying statistics on the size of the gay population in cities across the US with data including unemployment statistics, GDP per capita, and growth, he was able to show a high correlation between cities with larger than average gay populations and sustained success on each of his measures. Florida’s point isn’t that we should deliberately source and hire gay workers, but that talented people, who are different in a variety of ways, are drawn to regions and workplaces that are inclusive and that value a person for the skills and talent they bring rather than whether they conform.

It is clear that the ‘traditional’ North American and Australian workforces, whether that means white male or full-time, ‘on-premises’, are only a memory today. Already, more than a quarter of the US workforce is non-white and almost half is non-male. In North America, almost all workforce growth between now and 2050 will be among the diverse, non-white population. For many sectors, including retail and hospitality, the lack of a diversity strategy is already suicidal. Moreover, the ‘contingent’ or alternative workforce, made up of contract, temporary, remote and part-time workers, already accounts for more than 35 per cent of the workforce and is growing at five-times the rate of the traditional workforce.

Increasingly, diversity is also about the young, mid-career, boomer and senior generations. We’ve always had a multi-generational workforce but, until recently, we haven’t recognised the importance and advantages of segmenting it and adjusting our messages, benefits and motivators to suit groups that are driven by clearly different factors.

Of course the wise talent manager takes diversity to its ultimate advantage. Today, with the advantages technology brings and by engaging every manager and supervisor as a talent manager, the work experience can be customised and maximised for each and every worker on a one-to-one basis. This goes beyond individual learning plans and individual performance goals to include individualised retention and engagement initiatives, customised total rewards packages and flexible enough work arrangements that can maximise the performance and commitment of everyone.

In many ways, and certainly compared to the more complex demographic challenges most western nations face, diversity can be seen as the ‘low-hanging fruit’ of talent management issues in the coming years. After all, the main requirement in seizing the opportunity is in understanding the benefits of an inclusive, welcoming culture. These include the advantages of disparate thinking, which has been shown to foster more creativity and lead to faster innovation; the advantage of reflecting customer diversity in the workforce and the advantages in recruiting that come from being known as a great place to work for minorities.

Each are collectively worth fortunes to organisations. The solution goes far beyond a campaign of cross-cultural training, however. Diversity for competitive advantage must be quickly embraced by companies today so that antiquated attitudes are changed and the new, inclusive workforce can emerge.

By Allan Schweyer, president of the Human Capital Institute