GRDC News - April 2005
 

Study: Senior Management Sees Benefits of Diversity

Boston, Mass. – March 4, 2005-- Senior management at more than 60 percent of major companies accepts the business case for corporate diversity and believes such programs give a competitive advantage, according to a study by Novations/J. Howard & Associates, a Boston-based global consulting firm.

The business case contends that diversity and inclusion efforts make a definite contribution to the bottom line by improving performance and building new leadership, according to Novations/ J. Howard, which surveyed more than 1,700 senior human resource executives on management attitudes and the diversity function.

While management at a majority of companies accepts the business case, at 18.6 percent there is ambivalence, according to the findings, but even so they consider diversity good for the organization. At only 7.6 percent of organizations does management reject the business case but nevertheless acknowledges diversity as a “fact of corporate life.” Finally, management at only 6.9 percent of companies supports diversity primarily as a good defense.

“Although the rationale and evidence driving inclusion programs vary from organization to organization there seems to be a consensus that diversity is good for business,” said Mike Hyter, president and CEO of Novations/J. Howard. “I doubt we would have gotten that kind of positive finding as recently as ten years ago.”

Among the study’s findings:

• Senior management at a majority of organizations rates the diversity program as competitive with those of similar companies, while 27.1 percent concedes the company is behind.
• Senior management at 48.6 percent makes diversity a competitive selling point, while 33.5 percent strongly supports diversity but is low key about promoting it.
• HR executives at 45 percent of companies report that senior management is “very committed” to the success of diversity efforts, while 40 percent is “somewhat committed.” Ten percent is “not so committed” and 5.6 percent “not committed at all.”
• HR executives at 24 percent of organizations report that senior management sometimes has overly ambitious expectations of the diversity program, while 44 percent indicates senior management is “pretty realistic.” Nevertheless, one-third of respondents concedes that senior management does “not have any idea what to expect” from diversity efforts.
• Nearly half of companies rely on outside consultants to shape diversity consulting and training strategies.
• Within the past year 41.8 percent of companies surveyed employees on diversity issues.
• Within the past year 37.9 percent of companies had their diversity program assessed by an outside consultant; 17.9 percent did so within the past 1-2 years.
• At 30 percent of companies the diversity function reports directly to the President or CEO, while at 29 percent it reports to the senior management team or vice-president level.
• Compared with other employee groups, first-line managers receive diversity training most often.

The Novations Internet survey of 1,780 senior human resource and diversity executives was conducted by independent research firm Equation Research.