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Business Case for Diversity

Before embarking on a diversity initiative, it's a good idea to identify why working on diversity issues will benefit your organization. Some of the key reasons are listed below. You should review the list and select three or four reasons that best apply to your organization.

Cementing the employee relationship

Improving employee satisfaction: By working on diversity issues that your employees are facing, you will improve employee satisfaction. In turn, your employees will become more productive, creative and innovative. Satisfied employees will improve your customer relationships and help market the company. Satisfied employees stay with their companies longer, so your employee retention improves, saving the company money in lost productivity, and recruiting and hiring costs.

Facilitating recruitment: The demographics of the workforce are changing. African Americans, Asians, and Hispanics make up over 25 percent of the workforce. A diverse workforce helps you to recruit talent among all demographic groups. Potential employees want to see their ethnicity reflected among your employees as well as among the senior management. They want to know that they will be able to access development opportunities. Having a diverse workforce sends a message that all employees are valued and welcome.

Enhancing retention: Surveys show that one major reason why employees leave a job is their relationship with their manager. By acknowledging diverse viewpoints and working styles, you will improve your relationship with your employees. In turn, they will be less likely to seek opportunities outside the company.

Becoming an employer of choice: Increasingly, companies must compete for the best employees in what has often been called a "war for talent". In order to compete effectively, many companies have embarked on a series of programs to become recognized as an employer of choice. By addressing diversity issues, companies become attractive to employees in all demographic groups both within and outside the company. A well-earned reputation as an employer of choice facilitates recruitment among potential employees and enhances retention among current employees.

Enhancing the ability to compete

Improving your company perception among customers: Like the workforce, the demographics of your customers are changing. Customers want to do business with companies that have a diverse workforce. In addition, customers often make decisions based on a company's reputation for diversity. In the global arena, having a culturally diverse workforce helps the company understand the culture, language and business style of international customers.

Enhancing the supplier base: A focus on diversity in your supplier base will result in costs savings as competition among suppliers brings down costs. Supplier competition also encourages innovation. In addition, customers and business partners expect a company to have a robust and diverse supplier base. Without one, a company may lose customers to a competitor with a stronger commitment to supplier diversity.

Strengthening Equal Employment Opportunity/Affirmative Action (EEO/AA) performance: Federal, state, and local governments require contractors to meet EEO/AA requirements just to qualify as bidders. A robust diversity effort helps companies meet and exceed these requirements and win lucrative contracts.

Improving the company's reputation within the community: A robust diversity effort enhances the reputation of the company among all of the diverse groups within the community.

Improving organizational performance

Sustaining innovation: A diverse workforce will bring the company a consistent influx of ideas for new products, services and/or processes. Research has shown that heterogeneous groups outperform homogeneous groups, if the diversity is managed. With a constant source of innovation, a company's competitive advantage will be enhanced.

Improving teamwork: Increasingly, employees are working in teams. Moreover, many quality and other concepts rely on teamwork. By addressing communication and tensions between different employee groups, you will improve the functioning of your unit's teams.

Improving global competency: Diversity initiatives help a company become sensitive to cultural differences among various countries around the world. This sensitivity is needed to compete in the global marketplace. Mastering diversity issues improves a company's ability to handle complexity, thus enhancing its ability to deal with the complexity found in the global marketplace.

Enhancing the success of acquisitions: Dealing with diversity issues means learning how to integrate the values and styles of different cultural backgrounds. These integration skills are similar to the ones needed to integrate acquisitions into an acquiring company.

Reducing the cost of discrimination and harassment suits: A proactive diversity effort can help to prevent costly discrimination and harassment suits. In addition to the dollar cost of any settlements, the negative publicity can harm a company's reputation and have a huge impact on future sales and recruiting programs.

Optimizing performance: When diversity issues are addressed, employees can become more productive and effective, thereby increasing the financial performance of the company.

About the Leaders' Toolkit on Diversity and Inclusion is now the official owner and distributor of the Leaders' Toolkit on Diversity.© Copyright The GilDeane Group, Inc., 2016. All Rights Reserved. For information, please contact The GilDeane Group, Phone 206-362-0336, Email:

Web-based Leaders' Toolkit was originally developed by Technology Workforce Partners, a consortium of high technology companies that worked collaboratively on diversity issues in the workplace from 1995-2005.

This toolkit is provided for informational purposes only. It is not intended to replace legal, compliance, or other professional advice. assumes no liability for the use of this toolkit.