News & Information

CCH® HR MANAGEMENT — 11/15/05

Diversity is important to the bottom line

Reducing costs and improving profits are two key results of a diverse workforce, according to a 2005 Workplace Diversity Practices Survey released by the Society for Human Resource Management (SHRM). Based on responses from 400 HR professionals, the survey examines how organizations are managing workplace diversity, and how effective they are.

Diversity issues are taking on increasing importance because of expected changes to the workforce in the areas of gender, age, race and ethnicity in the coming decades. As these demographics changes take place, it will be even more important for organizations to use and measure successful diversity initiatives. "If organizations want to remain competitive in the marketplace, diversity has to be a part of its strategic goal," said Susan R. Meisinger, SPHR, president and CEO of SHRM. "With Baby Boomers expected to work long into retirement and the population growing more diverse in terms of race and ethnicity, organizations should use strong diversity initiatives now to maintain their competitiveness."

Reduced absenteeism, increased retention.

The survey found that organizations can measure the impact of a diverse workplace through reduced costs in absenteeism and retention, and improved recruitment, public image and overall corporate culture. Seventy-eight percent of HR professionals said that diversity practices have helped reduce costs, while 74 percent said it improved the financial bottom line.

The survey also found that large organizations are more likely to measure the impact of diversity while small and medium organizations generally lacked the resources to measure diversity practices. However, only 38 percent of all organizations have a method of measuring the impact of diversity practices.

Top-level commitment.

Diversity at the executive level is among the best indications of how committed an organization is to diversity. Fifty-three percent of HR professionals agreed that their board of directors was diverse in terms of age, ethnicity, gender, religion, education and socioeconomics. The survey also found that HR professionals indicated that a diverse board generally increased the effectiveness of the diversity practices in the organization.

Source: Society for Human Resource Management.

For additional information on this and other HR topics, consult CCH Human Resources Management or Personnel Practices/Communications.

Visit our News Library to read more news stories.