Study Cites Diversity Progress, Barriers

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Executives from large companies around the world said they’ve made significant progress in diversity and inclusion efforts focused on gender, ethnicity, national origin, race and color, according to a Forbes Insight study, but they face certain barriers as they develop and implement diversity strategies.

The report, Fostering Innovation Through a Diverse Workforce, released July 14, 2011, reflects insights from 321 executives who have direct responsibility or oversight for their companies’ diversity and inclusion programs and who work for large global enterprises with revenues of more than $500 million.

Thirty-five percent of respondents came from the Americas, 34 percent from Asia-Pacific and 31 percent were from Europe, the Middle East and Africa.

Nearly half of the respondents (44 percent) held C-level titles or were board members. About a third held corporate management positions or were in HR or talent management, while 21 percent came from business operations and 12 percent from finance.

Most respondents (54 percent) cited gender diversity as the area in which they feel they had made the most progress, followed by ethnicity/national origin (mentioned by 42 percent) and race/color diversity (mentioned by 39 percent).

As for areas needing the most improvement, respondents agreed that disability and age topped the list, at 29 and 28 percent respectively, followed by sexual orientation, noted by 23 percent of respondents as an area for improvement.

The executives who responded said they saw a number of barriers that could impact their organizations’ ability to develop or implement a strategy for workplace diversity and inclusion:

  • Middle management fails to execute diversity programs adequately (46 percent).
  • Budgetary issues prevent greater implementation (46 percent).
  • The company is too focused on survival in the current economy (42 percent).
  • There is a failure to recognize the connection between diversity and business drivers (41 percent).

Diversity Drives Innovation

Nevertheless, 85 percent of respondents agreed (48 percent strongly so) that diversity is crucial to gaining the perspectives and ideas that foster innovation.

“Diversity fosters creativity,” Frédéric Rozé, CEO for L’Oréal USA, is quoted as saying in the report. “We need to generate the best ideas from our people in all levels of the company and incorporate them into our business practices.”

Consequently, more than three-quarters of respondents (78 percent) said their companies planned to put more focus on leveraging diversity for their business goals, including innovation, over the next three years.

“Executives understand that their companies can’t be successful on a global platform if they don’t have a diverse and inclusive workforce,” the report authors noted. “Multiple voices lead to new ideas, new services and new products and encourage out-of-the-box thinking.”

Finding a way to tap into a diverse pool of employees can even help companies avoid negative media attention such as that experienced by C.B. Fleet Co., Inc., owner of the brand Summer’s Eve, which made headlines for a series of commercials that used various voices and accents that some said reflected racial and ethnic stereotypes, according to an article published by AdWeek July 27, 2011.

Huey Wilson, a member of Mattel’s diversity board, told Forbes Insights that their employee resource groups (ERGs) have been used for just such a purpose: “We have to make sure that we’re culturally sensitive. There have been some big near misses that we might not have avoided without the ERGs.”

Other findings:

  • A diverse and inclusive workforce is crucial for companies that want to attract and retain top talent. Most companies (65 percent) have programs to recruit diverse employees, but fewer focus on developing and retaining them after they’ve been hired (53 and 44 percent, respectively).  Development efforts include mentoring and employee resource groups, while retention efforts focus on talent reviews, monitoring of turnover and management accountability.
  • Most companies have diversity and inclusion strategies, yet such strategies vary. For example, Asia-Pacific companies are more likely to have programs that focus on age and nationality than others, and European companies are more likely to look at disability or sexual orientation.
  • Organizations’ diversity efforts won’t change significantly over the next three years. The top priority—retention and development of diverse talent, which was cited by 43 percent of respondents—will be the top priority in three years’ time. Yet respondents said that “ensuring diversity in the workplace in general”—which respondents said was their second priority at the time of the survey—would be less important in three years than managing cross-generational issues, leveraging diversity for business goals and ensuring diversity at all levels of management, issues that respondents expected would increase in importance.
  • Responsibility for the success of a company’s diversity and inclusion efforts lies with senior management. Seven out of ten companies reported that the buck stops at the C-level and the board of directors.

When it comes to implementing policy and programs, however, 65 percent of respondents said the responsibility shifts to HR.

Rebecca R. Hastings, SPHR, is an online editor/manager for SHRM.