2005 Workplace Diversity Practices. Survey Report A Study by the Society for Human Resource Management

Transcription

1 2005 Workplace Diversity Practices Survey Report A Study by the Society for Human Resource Management

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3 2005 Workplace Diversity Practices Survey Report Evren Esen SHRM Survey Research Specialist SHRM October 2005 Research

4 This report is published by the Society for Human Resource Management (SHRM). The interpretations, conclusions and recommendations in this report are those of the author and do not necessarily represent those of SHRM. All content is for informational purposes only and is not to be construed as a guaranteed outcome. The Society for Human Resource Management cannot accept responsibility for any errors or omissions or any liability resulting from the use or misuse of any such information Society for Human Resource Management. All rights reserved. Printed in the United States of America. This publication may not be reproduced, stored in a retrieval system or transmitted in whole or in part, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior written permission of the Society for Human Resource Management, 1800 Duke Street, Alexandria, VA 22314, USA. For more information, please contact: SHRM Research Department 1800 Duke Street, Alexandria, VA 22314, USA Phone: (703) Fax: (703) Web:

5 2005 Workplace Diversity Practices Survey Report Contents v About This Report v About SHRM v About SHRM Research v About the Author v Acknowledgments 1 Introduction 2 Methodology 4 Key Findings 5 Survey Results 17 Conclusions 18 A Look Ahead: A Future View of Workplace Diversity Practices 20 Demographics 22 Survey Instrument 29 SHRM Survey Reports

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7 SHRM Research About This Report In June 2005, the Society for Human Resource Management (SHRM) conducted its Workplace Diversity Practices Survey, which asked HR professionals about the diversity practices utilized by their organizations. For the purposes of this survey, workplace diversity was defined as an inclusive corporate culture that strives to respect variations in employee personality, work style, age, ethnicity, gender, religion, socioeconomics, education and other dimensions in the workplace. Survey findings are discussed in the survey results section. Interpretations about future trends in diversity practices are presented at the end of the report in the section titled A Look Ahead. Statistically significant findings by demographic variables such as organization staff size and sector also are integrated in the survey report, where applicable. These data may appear in a table or only as text along with the overall survey findings. About SHRM The Society for Human Resource Management is the world s largest association devoted to human resource management. Representing more than 200,000 individual members, the Society s mission is to serve the needs of HR professionals by providing the most essential and comprehensive resources available. As an influential voice, the Society s mission is also to advance the human resource profession to ensure that HR is recognized as an essential partner in developing and executing organizational strategy. Founded in 1948, SHRM currently has more than 550 affiliated chapters and members in more than 100 countries. Visit SHRM Online at About SHRM Research SHRM Research produces high-quality, leading edge research and provides expertise on human resource and business issues for the purpose of advancing the HR profession. SHRM s cutting edge research is used by human resource professionals to develop their knowledge and to provide strategic direction to their organizations. As leading experts in the field of HR, SHRM works closely with leading academics, policy makers and business leaders. About the Author Evren Esen is a survey research specialist for SHRM. Her responsibilities include designing, conducting and analyzing surveys on HR-related topics. She has a graduate certificate in survey design and data analysis from The George Washington University in Washington, D.C. Acknowledgments This report is the culmination of a team effort. Steve Williams, Ph.D., SPHR, SHRM Director of Research, provided valuable expertise adding to the content of the survey report. Jennifer Schramm, SHRM Manager v

8 of Workplace Trends and Forecasting, provided insight on future trends in diversity. Deb Keary, SPHR, SHRM Director of Knowledge Center and head of SHRM s Diversity Advisory Council, and Nancy Lockwood, SPHR, GPHR, SHRM HR Content Expert, also contributed to the content of the survey. The Workplace Diversity Practices Survey instrument was developed by the SHRM Survey Program. Mary Elizabeth Burke, SHRM Market Research Specialist, was instrumental in the design of the survey. Todd Campbell, SHRM Manager of Diversity, contributed to the direction of the survey project, as did Keith Greene, SPHR, SHRM Vice President of Member Relations. SHRM s Workplace Diversity Special Expertise Panel, specifically Cornelia Gamlem, Marna Hayden, Anne McMahon, Lorraine Mixon-Page and Rhoma Young, provided valuable insight and recommendations for the survey instrument. vi

9 Introduction SHRM Research Workplace diversity practices refer to efforts organizations engage in to provide an inclusive corporate culture that values differences and promotes opportunities for all employees. Traditionally, diversity programs have focused mostly on race and gender and other physical dimensions. However, today s definition of diversity covers a broad spectrum of individual and group differences ranging from work styles and generational perspectives to political and religious preferences. Under the umbrella of diversity practices, organizations are employing methods of understanding and relationship-building that encourage the voice of all employees to be heard and embraced. To gain a competitive advantage, organizations are learning that perspectives of diverse employee groups add value and creativity to organizations strategic direction. In fact, the practice of embracing and leveraging differences for the benefit of the organization through the collaboration of cultures, ideas and experience is proving to make a strong business case. 1 Diversity is even more relevant due to the interconnectivity of global markets. The world no longer operates in silos, nor do businesses. To remain competitive, organizations must understand the preferences and needs of their diverse customer base, which may include ethnic and cultural groups that go beyond simply race and gender. The intricacies of knowledge necessary to serve a wider market share require that organizational leadership rely upon a conglomeration of ideas. The results of this survey provide insight, from the perspectives of HR professionals, on what organizations are doing to manage diversity in the workplace. The most commonly used diversity practices are revealed as are the efforts made by organizations to measure the impact of diversity and its effect on the financial bottom line. 1 Lockwood. N. R. (2005). Workplace diversity: Leveraging the power of difference for competitive advantage. SHRM Research Quarterly, 2. 1

10 Methodology Asample of HR professionals was randomly selected to participate in the survey from SHRM s membership database, which included approximately 190,000 individual members at the time the survey was conducted. Only members who had not participated in an SHRM survey or poll in the last six months were included in the sampling frame. Members who were students, consultants, academics, located internationally and who had no address on file were excluded from the sampling frame. In June 2005, an that included a link to the SHRM Workplace Diversity Practices Survey was sent to 3,000 randomly selected SHRM members. Of these, 2,411 s were successfully delivered to respondents, and 400 HR professionals responded, yielding a response rate of 17%. The survey was accessible for a period of three weeks. Three reminders and one fax reminder were sent to nonrespondents in an effort to increase response rates. The sample of 400 HR professionals was representative of the SHRM membership population, particularly with respect to industry. There were some differences in organization staff size with more HR professionals from small- and medium-staff-sized organizations and fewer from large-staff-sized organizations represented in the sample than in the SHRM membership population. Notes and Caveats Analysis by organization staff size: Throughout this report, analyses by respondents organization staff size are presented and discussed, when applicable. Organizations are grouped into three categories based on the worldwide number of employees at the HR professional s business: small organizations (1 to 99 employees), medium organizations (100 to 499 employees) and large organizations (500 or more employees). Analysis by organization sector: Analyses by organization sector are discussed, when applicable. Sectors are divided into three areas: 1) private for-profit; 2) private nonprofit; and 3) public/government. Differences: Conventional statistical methods were used to determine if observed differences were statistically significant (i.e., there is a small likelihood that the differences occurred by chance). Therefore, in most cases, only results that were significant are included, unless otherwise noted. 2

11 SHRM Research Generalization of results: As with any research, readers should exercise caution when generalizing results and take individual circumstances and experiences into consideration when making decisions based on this data. While SHRM is confident in its research, it is prudent to understand that the results presented in this survey report are only truly representative of the sample of HR professionals responding to the survey. Number of respondents: The number of respondents (indicated by n ) is noted in all tables and figures and indicates the number of individuals (not organizations) who provided data relevant to a particular table or figure. The number of respondents varies from table to table because some respondents did not answer all of the questions. Individuals may not have responded to a question on the survey because the question or some of its parts were not applicable or because the requested data was unavailable. This also accounts for the varying number of responses from one table to another or within a table. Confidence level and margin of error: A confidence level and margin of error give readers some measure of how much they can rely on survey responses to represent all SHRM members. Given the level of response to the survey overall, SHRM Research is 95% confident that responses given by responding HR professionals can be generalized to all SHRM members, in general, with a margin of error of approximately 5%. For example, 76% of HR professionals reported that their organizations presently had diversity programs. With a 5% margin of error, the reader can be 95% certain that between 71% and 81% of SHRM members would report that their organizations presently had diversity programs. It is important to know that as the sample size decreases, the margin of error increases, and therefore the margin of error for each individual question will vary depending on the number of responses to that particular question. 3

12 Key Findings About three-quarters of organizations currently addressed diversity in their workplaces through the use of practices that promoted inclusiveness. However, most of these organizations did not have staff dedicated exclusively to diversity, making it very likely that diversity fell under the purview of the HR function. About two-thirds of respondents reported that their organizations provided training on diversity issues, most of which tended to be mandatory for top-level executives and nonexecutive managerial staff. The most prevalent diversity practices used by organizations were allowing employees to take unpaid leave to observe a religious or cultural holiday not already observed by the organization, using recruiting strategies designed to help increase diversity within the organization and engaging in community outreach related to diversity. HR professionals indicated that the most important outcomes of diversity for their organizations were reduction in costs associated with turnover, absenteeism and low productivity, as well as an improved financial bottom line, decreased complaints and litigation and improved public image of the organization. Slightly more than one-third of organizations measured the impact of their diversity practices and even fewer collected diversity return-on-investment data, according to responding HR professionals. Those that did use these measures, used the following indicators: 1) the number of diverse employees recruited (the most frequently used measure); 2) the number of diverse employees retained; and 3) evidence of diversity at all levels of the workforce (from rank-andfile to senior management employees). Most HR professionals indicated that the diversity practices used by their organizations were either somewhat or very effective. About one-half of HR professionals agreed that their organizations boards of directors were diverse in terms of age, ethnicity, gender, religion, socioeconomics, education, etc. In addition, HR professionals were more likely to perceive that their diversity practices were effective if their organizations boards were diverse. 4

13 Survey Results SHRM Research As shown in Figure 1, 76% of HR professionals reported that their organizations had practice(s) in place that addressed workplace diversity. Almost all large-staffsized organizations (94%) and fewer small (60%) and medium (71%) organizations reported implementing diversity practices. Figure 2 indicates that only about one out of five organizations (21%) had staff dedicated exclusively to diversity practices. These organizations had a median Figure 1 Organizations With Diversity Practices in Place (n = 361) No 24% of three staff per organization dedicated solely to diversity. As shown in Figure 3, most of the organizations with staff that focused solely on diversity were large organizations (40%). In small and medium organizations, those responsible for diversity practices probably had other roles as well and did not devote all of their time to diversity. As a general trend, additional analyses of the data showed that organizations that had staff dedicated exclusively to diversity issues used diversity practices to a greater degree and were more likely to offer diversity training at their organizations. Figure 2 Organizations With Staff Dedicated Exclusively to Diversity Practices (n = 398) Yes 21% Yes 76% No 79% Note: Excludes HR professionals who indicated that they were not sure whether their organizations had any diversity practices in place. Source: SHRM Source: SHRM 5

14 Figure 3 Organizations With Staff Dedicated Exclusively to Diversity Practices (by Organization Staff Size) 40% 9% 12% Small (1 99 employees) (n = 116) Source: SHRM Medium ( employees) (n = 150) Large (500 or more employees) (n = 127) Table 1 Workplace Diversity Practices Utilized by Organizations n Yes No Allow employees to take unpaid leave to observe a religious or cultural holiday not observed by the organization % 15% Employ recruiting strategies designed to help increase diversity within the organization % 21% Engage in community outreach related to diversity (e.g., links between organization and educational institutions, government, etc.) % 26% Ensure that diversity is a consideration in every business initiative and policy % 27% Provide career development opportunities designed to increase diversity in higher-level positions within the organization (e.g., mentoring, coaching, etc.) % 37% Collect measurements/metrics on diversity-related practices % 44% Employ retention strategies designed to help retain a diverse workforce % 48% Employ strategies to ensure diversity in the organization s suppliers, contractors, etc % 49% Demonstrate diversity awareness in the form of celebrating different cultural events (e.g., Black History Month, Hispanic Heritage Month) % 53% Allow employees to swap holidays to observe an unpaid religious or cultural holiday (e.g., work on Christmas to take time off during Passover) % 57% Support employee affinity groups (groups formed around an aspect of diversity) % 71% Provide career development opportunities specifically tailored for diverse employees % 72% Offer training in English as a second language % 80% Provide incentive pay for management linked to the achievement of organizational diversity goals % 88% Note: Data are sorted in descending order by yes column. Excludes respondents who indicated that they were not sure whether their organizations had any diversity practices in place. Source: SHRM 6

15 SHRM Research How is diversity addressed in the workplace? Table 1 illustrates the workplace diversity practices utilized by organizations, according to HR professionals, and Table 2 shows these data by organization size. The top three practices were: 1) allowing employees to take unpaid leave to observe a religious or cultural holiday not already observed by the organization (85%); 2) using recruiting strategies designed to help increase diversity within the organization (79%); and 3) engaging in community outreach related to diversity (74%). Many organizations ensured that diversity was a consideration in every business initiative, according to 73% of HR professionals. Yet, only slightly more than one-half (56%) of organizations collected measurements/metrics on diversity-related practices. Large organizations, however, were more than two times more likely than small organizations to collect diversity metrics. The least utilized practice by organizations was linking incentive pay for management to the achievement of organizational diversity goals, although about 21% of large organizations did so compared with less than 10% of small- and medium-sized organizations. The overall trend was that large organizations tended to participate in more workplace diversity practices than small and medium organizations. Large organizations probably have more resources and staff to devote to diversity. Data were also analyzed by organization sector. HR respondents from the public/government sector indicated that their organizations collected measurement/metrics on diversity practices more than private for-profit organizations. Diversity activities that promoted aware- Table 2 Workplace Diversity Practices Utilized by Organizations (by Organization Staff Size) Small Medium Large Differences (1-99 Employees) ( Employees) (500 or More Employees) by Organization (n = 116) (n = 150) (n = 127) Size Employ recruiting strategies designed to help increase diversity 62% 70% 91% Large > small within the organization Large > medium Engage in community outreach related to diversity (e.g., links 53% 69% 85% Large > small between organization and educational institutions, government, etc.) Large > medium Collect measurements/metrics on diversity-related practices 29% 45% 77% Large > small Large > medium Provide career development opportunities designed to increase 42% 64% 74% Medium > small diversity in higher-level positions within the organization Large > small (e.g., mentoring, coaching, etc.) Employ strategies to ensure diversity in the organization s suppliers, 36% 40% 66% Large > small contractors, etc. Large > medium Demonstrate diversity awareness in the form of celebrating different 28% 35% 63% Large > small cultural events (e.g., Black History Month, Hispanic Heritage Month) Large > medium Support employee affinity groups 17% 16% 45% Large > small (groups formed around an aspect of diversity) Large > medium Provide career development opportunities specifically tailored for 23% 20% 39% Large > medium diverse employees Offer training in English as a second language 9% 21% 25% Large > small Provide incentive pay for management linked to the achievement of 7% 6% 21% Large > small organizational diversity goals Large > medium Note: Percentages are column percentages. Data sorted by large organization column. Sample sizes of the organization size categories are based on the actual number of respondents answering the organization size question; however, the percentages shown are based on actual number of respondents by organization size who answered this question. Source: SHRM 7

16 ness by celebrating different cultural events, such as Black History Month, Older Americans Month, etc., were used by public/government and private nonprofit organizations more than by private for-profit organizations. Public/government entities were also more likely than private for-profit organizations to ensure that diversity was a consideration in every business policy. Figure 4 illustrates the diversity areas that were being addressed by responding HR professionals organizations. Eighty-nine percent of HR respondents reported that their organizations covered gender in their diversity practices, followed by ethnicity (88%), race (86%), age (84%), disability (73%) and religion (68%). Six out of 10 organizations addressed sexual orientation in diversity practices and 49% covered language. Public/government organizations were more likely to include disability in their diversity practices compared with private for-profit organizations. HR professionals were asked about the importance of specific outcomes of diversity practices at their organizations. These data are shown in Figure 5. The reduced costs associated with turnover, absenteeism and low productivity were an outcome of diversity practices that was most important to organizations, according HR professionals: 78% indicated it was very important. The very important outcomes of diversity practices that followed were improved financial bottom line (74%), decreased complaints and litigation (74%) and improved public image of the organization (73%). Only 51% of HR professionals indicated that improved employee opinion surveys/diversity audits were very important outcomes of diversity practices, placing them at the bottom of the list. HR professionals from large organizations were more likely to indicate that the recruitment of a diverse workforce, the presence of diversity at all levels of the workforce (e.g., from rank-and-file employees to senior management), a diverse client/customer base and improved employee opinion surveys/diversity audits were very important outcomes of diversity practices, compared with respondents from small and medium Figure 4 (n = 305) Areas of Divesity Covered by Organizations Gender Ethnicity Race Age 89% 88% 86% 84% Disability 73% Religion 68% Sexual orientation 60% Language 49% Other 6% Note: Percentages do not total 100% due to multiple response options. Source: SHRM 8

17 SHRM Research organizations. A greater proportion of HR professionals indicated that the retention of a diverse workforce was very important for large organizations, compared with medium ones. These data are shown in Table 3. A diverse client/customer base and recruitment of a diverse workforce were more likely to be very important for public/government organizations than for private for-profit organizations. HR professionals were asked if their organizations provided diversity training. These data are depicted in Figure 6. About two-thirds (67%) of respondents reported that their organizations had training on diversity issues. HR respondents from large organizations reported offering diversity training more than those from small and medium organizations. Private nonprofits were more likely to have diversity training than private for-profit organizations, according to HR professionals. Table 4 displays whether diversity training was mandatory, voluntary or nonexistent for different employee levels. Overall, when an organization offered diversity training, it tended to be mandatory. Sixty percent of HR professionals indicated that their organizations top-level executives (e.g., CEO, president, CFO, etc.) were required to attend diversity training. Seventy per- Figure 5 Importance of Workplace Diversity Practice Outcomes Reduced costs associated with turnover, absenteeism and low productivity (n = 303) Improved financial bottom line (profits) (n = 302) 5% 17% 78% 10% 16% 74% Decrease in complaints and litigation (n = 302) 10% 16% 74% Improved public image of the organization (n = 305) 3% 24% 73% Increased organizational competitiveness (n = 301) 6% 24% 70% Retention of a diverse workforce (n = 304) 8% 27% 66% Recruitment of a diverse workforce (n = 305) Diversity of thought and decision-making in the organization (n = 300) Diversity at all levels of the workforce (e.g., rank-and-file to senior management) (n = 303) A diverse client/customer base (n = 303) Improved employee opinion surveys/diversity audits (n = 303) 10% 25% 66% 8% 26% 66% 10% 29% 61% 15% 27% 58% 18% 31% 51% Not Very Important Somewhat Important Very Important Note: Percentages may not total 100% due to rounding. The figure is sorted by very important responses. Source: SHRM 9

18 cent of HR professionals indicated that diversity training was mandatory for nonexecutive managerial-level employees (e.g., director, manager, etc.). Only about one-half (53%) of respondents reported that nonmanagerial employees were required to participate in diversity training. Making a business case for diversity is crucial for HR professionals. Measuring the impact of diversity practices is a first step. Yet, only 38% of HR professionals indicated that their organizations had a method for measuring the impact of diversity practices, as shown in Figure 7. Large organizations were more likely to have Table 3 Importance of Workplace Diversity Practice Outcomes (by Organization Staff Size) Small Medium Large Differences (1-99 Employees) ( Employees) (500 or More Employees) by Organization (n = 116) (n = 150) (n = 127) Size A diverse client/customer base Very important 46% 50% 71% Large > small Large > medium Somewhat important 36% 28% 23% Not very important 17% 23% 6% Small > large Medium > large Diversity at all levels of the workforce Very important 51% 56% 72% Large > small (e.g., rank-and-file to senior management) Large > medium Somewhat important 40% 35% 18% Small > large Medium > large Not very important 9% 9% 9% Improved employee opinion Very important 42% 45% 61% Large > small surveys/diversity audits Large > medium Somewhat important 39% 35% 24% Not very important 19% 20% 14% Improved financial bottom line (profits) Very important 71% 76% 73% Somewhat important 19% 19% 13% Not very important 10% 5% 15% Large > medium Increased organizational competitiveness Very important 65% 64% 78% Somewhat important 29% 32% 14% Small > large Medium > large Not very important 6% 4% 9% Recruitment of a diverse workforce Very important 56% 60% 78% Large > small Large > medium Somewhat important 34% 28% 15% Small > large Medium > large Not very important 10% 12% 7% Retention of a diverse workforce Very important 63% 59% 75% Large > medium Somewhat important 33% 32% 17% Small > large Medium > large Not very important 4% 9% 8% Note: Percentages are column percentages and may not total 100% due to rounding. Sample sizes of the organization size categories are based on the actual number of respondents answering the organization size question; however, the percentages shown are based on actual number of respondents by organization size who answered this question. Source: SHRM 10

19 SHRM Research a method for measuring the impact of diversity practices than small and medium organizations. Figure 8 illustrates the indicators that organizations measured to determine the impact of diversity practices. According to 89% of HR professionals, the number of diverse employees recruited was the most used measure, followed by the number of diverse employees retained (75%) and evidence of diversity at all levels of the workforce (e.g., rank-and-file to senior management) (72%). Although employee opinion surveys/diversity audits rated at the bottom of the very important outcomes of diversity practices (see Figure 5), they appeared to play a greater role in measuring the impact of diversity practices, according to 68% of HR professionals. Large organizations, more than small, relied upon the number of diverse employees recruited as a method for measuring the impact of diversity practices. Measuring the impact of diversity practices provides organizations with data that can be captured from year to year. These findings are relevant in tracking Figure 6 (n = 301) Training on Diversity Issues No 33% Figure 7 (n = 227) Measuring the Impact of Diversity Practices Yes 38% Yes 67% No 62% Note: Excludes HR professionals who indicated that they were not sure whether their organizations measured the impact of diversity practices. Source: SHRM Source: SHRM Table 4 Employee Level and Diversity Training n Mandatory Training Voluntary Training No Training Available Top-level executive (e.g., CEO, president, CFO, etc.) % 36% 4% Nonexecutive managerial-level employees (e.g., director, manager, etc.) % 30% 1% Nonmanagerial-level employees % 41% 7% Note: Percentages may not total 100% due rounding. Only HR professionals who indicated that their organizations provided diversity training were asked this question. Source: SHRM 11

20 the tangible outcomes of a coordinated diversity program. An even more meaningful step for organizations is the collection of data that signifies the return that diversity practices have on the organizations investment. Few organizations, however, collected return on investment (ROI) data. Only 14% of HR professionals indicated that their organizations measured the ROI of their diversity practices. These data are shown in Figure 9. Organizations with staff dedicated exclusively to diversity were four times more likely to collect ROI data on diversity practices compared with those organizations that did not. SHRM s Research Quarterly, Workplace Diversity: Leveraging the Power of Difference for Competitive Advantage, provides a guideline for calculating a diversity return on investment. 2 2 Lockwood. N. R. (2005). Workplace diversity: Leveraging the power of difference for competitive advantage. SHRM Research Quarterly, 2. Figure 8 (n = 87) How Organizations Measure the Impact of Workplace Diversity Practices Number of diverse employees recruited 89% Number of diverse employees retained Diversity evident at all levels of the workforce (e.g., rank-and-file to senior management) Employee opinion surveys/diversity audits 68% 72% 75% Improved corporate culture Number of complaints and litigation Improved public image 53% 52% 52% Client/customer base diversity Reduced costs associated with turnover, absenteeism and low productivity 46% 45% Improved financial bottom line (profits) Evaluation of employees sensitivity/knowledge of diversity Increased organizational competitiveness Recognition/awards through published lists or diversity organizations 37% 35% 33% 31% Other 3% Note: Percentages do not total 100% due to multiple response options. Only HR professionals who indicated that their organizations measured the impact of diversity practices were asked this question. Source: SHRM 12

21 SHRM Research Figure 9 (n = 210) Return on Investment Measured by Organizations Yes 14% Figure 10 depicts how effective HR professionals believed their organizations diversity practices were in meeting the organizations desired outcomes. A majority (66%) of respondents indicated that their diversity practices were somewhat effective in achieving their intended results. Seventeen percent felt their programs were very effective, and 18% indicated that they were not at all effective. HR professionals from organizations that did not have staff dedicated exclusively to diversity were twice as likely to perceive their diversity practices to be ineffective compared with those that had diversity staff in place. Note: Excludes HR professionals who indicated that they were not sure whether their organizations conducted ROI analysis on diversity practices. Source: SHRM No 86% One of the most powerful means of showing an organization s commitment to diversity is a diverse board of directors. A company s board is the public face of the organization and shows a commitment to diversity to the organization s workforce. Of the HR professionals who reported that their organizations had a board of directors, about one-half (53%) agreed (responded somewhat agree and agree ) that their organizations boards of directors were diverse Figure 10 Effectiveness of Workplace Diversity Practices (n = 296) 66% 18% 17% Not at all effective Somewhat effective Very effective Note: Percentages may not total 100% due to rounding. Source: SHRM 13

22 in terms of age, ethnicity, gender, religion, socioeconomics, education, etc. HR professionals from the public/government sector were two times more likely to agree that their boards were diverse compared with private for-profit organizations. These data are depicted in Figure 11. Table 5 examines the relationship between HR professionals average level of agreement that their organizations boards were diverse and the effectiveness of their organizations diversity practices in achieving their desired outcomes. The findings suggest that as the agreement level about a diverse board increased, so did the perceived effectiveness of diversity outcomes. HR professionals who indicated that their organizations were very effective in reaching their diversity outcomes also reported that their boards were more diverse. In contrast, HR professionals who indicated their diversity outcomes were only somewhat effective or not at all effective also reported that their boards of directors were less diverse. These data reveal the impact of a diverse board on diversity practices across the entire organization. Similar to Table 5, Table 6 reveals that HR professionals from organizations that offered diversity training were much more likely to perceive their diversity practices as very effective compared with those from organizations that did not offer diversity training. Figure 11 Diversity in Organizations Boards of Directors (n = 210) 30% 32% 16% 21% Disagree Somewhat disagree Somewhat agree Agree Note: Excludes HR professionals who indicated that they were not sure whether their organizations boards of directors were diverse. Excludes respondents whose organizations did not have a board of directors. Percentages may not total 100% due to rounding. Source: SHRM Table 5 Perceived Effectiveness of Diversity Practices and Diversity of Organization s Board of Directors Overall, how effective or ineffective do you believe your organization s diversity practices are in achieving your organization s desired outcomes? Not At All Effective Somewhat Effective Very Effective (n = 52) (n = 194) (n = 50) Do you agree or disagree that your organization s board of directors is diverse? Note: Average ratings are based on a scale where 1 = disagree and 4 = agree (higher averages mean that the board was more diverse). Sample sizes are based on the actual number of respondents answering the effectiveness of diversity practices question. Source: SHRM 14

23 SHRM Research The last series of questions asked HR professionals to indicate how well various diversity statements described their organizations. These data are illustrated in Figure 12. Fifty-four percent of HR professionals indicated that the statement My organization is inclusive of diverse cultures and values described their organizations very well. This was followed by 53% of HR respondents who reported that the statement Senior management at my organizations believes that diversity is important was very descriptive of their organizations. Less than one-half (45%) of HR professionals indicated that the statement Diversity practices are primarily developed by the HR department described their organizations well. Only 17% of respondents perceived a positive link between diversity practices and their organizations financial bottom line. Table 6 Perceived Effectiveness of Diversity Practices and Diversity Training Overall, how effective or ineffective do you believe your organization s diversity practices are in achieving your organization s desired outcomes? Not At All Effective Somewhat Effective Very Effective (n = 51) (n = 91) (n = 50) Does your organization provide any training on diversity issues? Yes 43% 69% 86% No 57% 31% 14% Note: Percentages may not total 100% due rounding. Sample sizes and percentages shown are based on the number of respondents who answered both questions using the response options provided. Source: SHRM Figure 12 Degree to Which Statements Describe Organization s Diversity Practices My organization is inclusive of diverse cultures and values (n = 301) Senior management at my organization believes that diversity is important (n = 296) My organization promotes and advances diverse talent (n = 300) Diversity practices are primarily developed by the HR department (n = 300) Employees at my organization believe that diversity is important (n = 300) Employees at my organization believe that senior management is committed to workplace diversity (n = 299) Diversity practices give my organization a competitive advantage (n = 298) My organization s workforce is diverse at all levels (e.g., rank-and-file and senior management) (n = 299) Diversity practices have positively affected my organization s financial bottom line (n = 295) 7% 39% 54% 9% 39% 53% 10% 42% 48% 11% 44% 45% 9% 52% 40% 16% 50% 34% 26% 42% 32% 20% 50% 30% 36% 48% 17% Does Not Describe At All Describes Somewhat Describes Very Well Note: Percentages may not total 100% due to rounding. The figure is sorted by describes very well responses. Source: SHRM 15

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25 Conclusions SHRM Research Managing a diverse workforce can be challenging, and in most organizations, HR professionals play a salient role in making sure that diversity happens. Workplace diversity begins with hiring and retaining a diverse group of employees, but it does not end there. Successful diversity practices reach out to all employees, creating a corporate culture that is inclusive regardless of similarities or differences. Diversity, however, takes work, and there are a myriad of ways that organizations can shape their workforce so that all perspectives are valued. Teaching organizations how to be diverse is spearheaded by HR professionals through diversity training programs, a sound diversity communication strategy and an emphasis on employee development methods such as mentoring, coaching and succession planning. One of the most effective ways to show employees, customers and clients that diversity is valued by the organization is to have diversity visible at all leadership levels. This requires a commitment on behalf of senior management to not only hire diverse employees, but to groom them to take on future leadership roles. One way to do this is to tie diversity outcomes to management compensation. Yet, findings from this survey reveal that only 12% of HR professionals used this incentive, making it the least utilized diversity practice. In order for diversity to provide organizations with competitive advantages, more organizations will need to make it an integral part of their corporate business strategies. Another powerful message that promotes an organization s value to diversity is the composition of its board of directors. Efforts to modify board membership so that it includes diversity can be tied to greater trends toward corporate governance and diversity of the workforce, customer base and other stakeholders. 3 Just as diversity of the workforce benefits the organization by bringing together varying leadership styles, worldviews, work styles and expertise, the same is true at the board level. HR professionals need to continue to be diligent in recruiting and retention strategies in order to ensure workplace diversity. In addition to collecting diversity metrics and making sure that the numbers are satisfactory, organizations will be expected to offer creative programs that allow individuals and groups to feel that their experiences bring value to their jobs and their organizations. This requires that diversity of experiences, opinions, work styles, etc., be rewarded through increased exposure of diverse employees in higher-level posts within the organization. The contribution of HR is vital in these efforts, and in most cases, HR leads organizations in developing their employees and creating customized career paths. HR can add even more impact by integrating the organization s efforts to tie diversity to the bottom line by heading diversity return-on-investment projects. 3 Lockwood. N. R. (2005). Workplace diversity: Leveraging the power of difference for competitive advantage. SHRM Research Quarterly, 2. 17

26 A Look Ahead: A Future View of Diversity By Jennifer Schramm, Manager, Workplace Trends and Forecasting The workforce is expected to become much more diverse in almost every way in the decades to come. Longer life expectancy and uncertainties over retirement income make it likely that a larger range of age groups will be represented in the workforce as older workers remain at work for a much longer time. Women have already entered the workforce in large numbers, but education rates indicate that they may begin to dominate professions previously made up largely of men. Immigration and other demographic patterns also indicate that there will be greater ethnic, racial, linguistic and cultural diversity. SHRM s Workplace Diversity Special Expertise Panel also predicts that many diversity issues will relate to access to certain key benefits particularly health care insurance. With the cost of such benefits increasing and the number of individuals without health insurance rising, there is a growing possibility of a divide between those who have access to such benefits through their employer and those who do not. This could be further complicated if access issues exacerbate already existing inequalities Workplace Diversity Special Expertise Panel Top Trends 1. Health care concerns. 2. Aging workforce. 3. Multicultural and multiracial population. 4. Immigration. 5. EEO/regulatory changes. 6. Technology advances. 7. Education/income gaps. 8. Generational differences. 9. Terrorism. 10. Same-sex unions. Source: SHRM Special Expertise Panels 2005 Trends Report along racial or ethnic lines and could become a potential source of generational tensions, given the aging status of the workforce. Even though more organizations may try to scale back the number of individuals covered by various kinds of benefits, societal trends may act as a countertrend to this: changing family structures may challenge traditional ideas of what constitutes a family in family benefit plans and more organizations may begin offering coverage to domestic partners (whether same or opposite sex). Another important access issue that may grow in importance is access to learning and education. In a knowledge economy, education will continue to be a key factor in determining lifetime earnings and other forms of compensation, such as benefits. According to the panel, widening education costs and income gaps could pose a challenge to promoting equal opportunities and could mean employers have to take on a greater role in training and education. Access to technology and other technology issues such as privacy are also likely to play a greater role. One important diversity dimension to this is the growing expectation for reasonable accommodation for individuals with disabilities. With technology making it easier for employers to enable individuals with disabilities to participate in the workforce, organizations that fall behind in making such accommodations could find themselves at a greater risk of lawsuits if expectations are not met. According to the survey report, larger organizations currently appear to have a wider variety of diversity policies in place than medium and small organizations. If access issues, such as access to health care insurance, retirement savings assistance or education and training, grow in importance as diversity issues, this may pose a special chal- 18

27 SHRM Research lenge to smaller organizations. With such costs continuing to increase and hitting smaller employers particularly hard, it may be more difficult to offer such benefits to all employees. For larger employers, these kinds of issues may have an important impact on public perception of the company. The findings from the SHRM 2004 Generational Differences Survey Report indicate that larger organizations also report slightly more problems relating to generational differences than small- and medium-sized employers, and it is possible that benefits access issues may play a larger role in aggravating tensions between workers of different generations in larger organizations. These differences between small and large organizations demonstrate how trends relating to diversity could play out very differently depending on a number of different factors. 19

28 Demographics Census Region (n = 380) Midwest (Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota, Wisconsin) 31% South (Alabama, Arkansas, Delaware, District of Columbia, Florida, Georgia, Kentucky, Louisiana, Maryland, Mississippi, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Virginia, West Virginia) 30% West (Alaska, Arizona, California, Colorado, Hawaii, Idaho, Nevada, New Mexico, Montana, Oregon, Utah, Washington, Wyoming) 23% Northeast (Connecticut, Maine, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Vermont) 17% Organization Staff Size (n = 393) Small (1-99 employees) 30% Medium ( employees) 38% Large (500 or more employees) 32% Unionized Employees (n = 385) Yes 15% No 85% The 15% of organizations that had unionized employees reported that 57% of their employees were covered under a collective bargaining agreement. Organization Industry (n = 387) Services (profit) 13% Manufacturing (durable goods) 12% Health 10% Wholesale/retail trade 8% Government 6% Finance 5% Educational services 4% High-tech 4% Insurance 4% Manufacturing (nondurable goods) 4% Services (nonprofit) 4% Telecommunications 3% Construction and mining/oil and gas 2% Newspaper publishing/broadcasting 2% Transportation 2% Utilities 2% Other 16% 20

29 SHRM Research Organization Sector (n = 385) Private for-profit organization 65% Private nonprofit organization 13% Public/government organization 18% Other 4% Percentage of Workforce by Gender Percentage of Workforce by Ethnic Group (n = 312) African American/Black 12% Asian/Pacific Islander 6% Caucasian/White 68% Hispanic/Latino(a) 12% Native American 1% Other 1% (n = 346) Males 52% Females 48% 21

30 Survey Instrument SHRM 2005 Workplace Diversity Practices Survey The Society for Human Resource Management (SHRM) is conducting a survey on diversity in the workplace. Your responses to this survey will be kept strictly confidential. Responses from all participants will be combined, analyzed and the findings reported only in their aggregate form. Please participate in this survey by answering the following questions and clicking the submit button at the end no later than June 21, If you have any questions, please contact the SHRM Survey Program by telephone at (703) or by at surveys@shrm.org. Thank you in advance for sharing your time and knowledge. Your insight and experiences as an HR professional are invaluable to us in this effort. Results of this survey will appear free to all respondents on the Survey Program homepage on SHRM s Web site. Please visit the Web site at This survey should take no more than 10 minutes to complete. Introduction: For the purposes of this survey, a broad definition of workplace diversity refers to an inclusive corporate culture that strives to respect variations in employee personality, work style, age, ethnicity, gender, religion, socioeconomics, education and other dimensions in the workplace. 22

31 SHRM Research 1. Does your organization have ANY practices in place that address workplace diversity? Yes No [Go to question 12] Not sure 2. Please indicate which of the following diversity practices your organization participates in. Allows employees to swap holidays (e.g., work on Christmas to take time off during Passover) to observe an unpaid religious or cultural holiday Allows employees to take unpaid leave to observe a religious or cultural holiday not observed by your organization Provides career development opportunities designed to increase diversity in higher-level positions within the organization (e.g., mentoring, coaching, etc.) Provides career development opportunities specifically tailored for diverse employees Yes No Not Sure Collects measurements/metrics on diversity-related practices Engages in community outreach related to diversity (e.g., links between organization and educational institutions, government, etc.) Demonstrates diversity awareness in the form of celebrating different cultural events (e.g., Black History Month, Hispanic Heritage Month) Supports employee affinity groups (groups formed around an aspect of diversity) Ensures that diversity is a consideration in every business initiative and policy Provides incentive pay for management linked to the achievement of organizational diversity goals Employs recruiting strategies designed to help increase diversity within the organization Employs retention strategies designed to help retain a diverse workforce Employs strategies to ensure diversity in the organization s suppliers, contractors, etc. Provides training in English as a second language Other (please specify): 23