Diversity pays dividends

Although managing a diverse workplace can result in increased staff loyalty, retention, profit and international business advantage, it takes skill and commitment to get right, say diversity experts.

"Managers can't manage diverse cultures successfully until they understand what culture is and know their own culture," says Romie Littrell, associate professor of international business for the Auckland University of Technology (AUT).

Littrell, who teaches diversity management to business degree students, says some people find it easier than others to develop, manage and work in a diverse work environment.

And diversity is not just about ethnicity. Organisations may seek people of diverse ages, personalities, personal backgrounds and skill-sets as well as those who are ethnically diverse.

"When you are involved in international business you quickly become aware of the difficulties of selling to, communicating with and advertising to people different to yourself," Littrell says. "This is one reason why people need to learn more about managing diversity." Obviously, managing diversity takes strategy and effort. But why bother? And why, when faced with two equal job candidates, do some companies have a diversity policy of choosing the one closest to a minority group?
Laurie Bunting, managing director for executive recruitment firm Swann Group, says conformity, particularly at management level, can stifle a business.

"Without personal, ethnic and other kinds of diversity, everyone sits round the meeting table and nods their head. Depending on the nature of the work, diverse thinking is very beneficial to a business," Bunting says.

Littrell says businesses that develop a diverse team of people gain synergy in problem-solving. "Japanese and Americans approach research and development in different ways - the Japanese use it to create a new product of higher quality while Americans put innovation first and assume quality will follow. Have them work together and the result is superior, the process dynamic."

Although some businesses champion diversity for altruistic or "socially responsible" reasons, those motives can deliver unexpected results to the bottom-line, as Brian Carren, general manager for Mt Albert Pak N'Save, discovered.

Carran employs 320 staff of 14 ethnicities and has a policy of hiring immigrants who can't find a first job in New Zealand.

Although some are hampered by language barriers, many are "overqualified" doctors, dentists, lawyers and engineers.

"I must have the most intelligently staffed supermarket in New Zealand,"says Carran. "Eventually they move on but while they're here - and that can be as long as a year or two - they're loyal and diligent, grateful for the job, and very intelligent."

He says while language and cultural barriers can slow induction and training processes, encouraging staff diversity has delivered his business a higher retention rate and a happy workforce.

He recruits 30 fewer people a year compared with similar supermarkets, saving about $100,000 a year.

Many international businesses know that championing diversity, for whatever motives, makes more money.

In August, Sandra Kerr, director for the British business network Race for Opportunity (RfO), says: "Diversity is good for profitability. The estimated value to our member's bottom-line this year from diversity strategies is calculated at £13.3 billion ($34 billion)." And 91 per cent of RfO's business members had developed a business case to promote racial diversity.

Who else is keen on diversity? Internationally, the Hyatt hotel chain splits its diversity initiatives into five parts: commitment, accountability, training, measurement and communication.

Hyatt also has diversity policies supporting gay, lesbian, bisexual and transgender employees - a less common type of policy that's rarely mentioned in academic or management diversity forums.

Philippa Reed, chief executive for the Equal Employment Opportunity (EEO) Trust, says IBM, Carter Holt Harvey, Westpac Bank, Barclay Engineering and the insurance firm IAG are all international brands that know how to champion diversity in New Zealand.

Reed says a diversity survey by the trust explored the motivation of New Zealand organisations committed to diversity strategies and found that both economic and ethical reasons were important: 67 per cent of respondents said their diversity strategies were designed to "attract and retain the best talent" and 63 per cent included "social responsibility" as a motivation.

Reed says other motivators were senior management commitment, a desire to enhance the reputation of the business in the community, and the need to meet statutory requirements and legislation around recruitment and employment.

Diversity initiatives resonated positively with the staff and boosted the employment brand of some respondents.

Others said increasing the ethnic diversity of staff had helped build links to the local community.

Some organisations employ a diversity manager to develop strategies to meet the needs of employees and customers of diverse ages, cultures, abilities, religions, life-stages, thinking styles, and beliefs.

Karyn Herbert, diversity manager for Westpac Bank, says "managing the diversity of our employees and customers is the key to unlocking our business success".

"Women may want to fulfil career and personal goals, younger people may want the flexibility to study, travel, pursue sporting interests or attend one off events." Herbert says businesses need to recognise and plan for differences in individual age, perspective, experience or background, and realise the business benefits of accommodating diversity - retaining key talent, increasing employee morale and improving customer service and knowledge.

Littrell says that although larger corporate companies generally do a good job of educating staff and customers about the effectiveness of diversity, small and medium-sized businesses often have a poor track record. He says this is partly because of the ageing workforce of countries such as New Zealand, Australia and Japan, and a corresponding lack of short courses in diversity management.

Littrell cites a Massey University study in which identical resumes carrying different names were sent to human resources managers throughout New Zealand.

The resumes that gave western European names generated more job offers than those with Indian or Asian names.

"In a litigious society like the United States, HR managers found to be discriminating on the basis of name would probably find themselves before a court before too long," Littrell says. New Zealand managers will do better if they court workplace diversity and reap the business benefits.