This Blue Paper was originally published in January 2013 and has since been modified to incorporate updated research on promoting diversity in the workplace.
Diversity is about variety. It is many different things that combine to create a whole. As Americans, we’ve become accustomed to the term “melting pot” to describe our combined differences, but a melting pot means assimilating and integrating to become one. In fact, some people now use a stew or salad metaphor instead. Like stews and salads, promoting diversity in the workplace is about including different kinds of people (call them ingredients) to contribute to the organization’s overall brand, image, and spirit.
Diversity continues to gain tremendous traction in the workplace as more and more businesses discover the overall organizational enrichment it brings. Some companies are even making room for a CDO, or Chief Diversity Officer. While you may be wondering about the day-to-day of a CDO, first, it’s important to understand more about diversity as an idea—how it began, how it is changing over time and how it affects business today. What it comes down to is there are more kinds of people in more places. And when demographics change, business needs to change with them. To recognize this is to embrace diversity.
Recognition is at the heart of the business case for diversity. In business, diversity is about including more people and expanding the quantity and quality of ideas brought to the table. More ideas mean greater innovation, and greater innovation means increased opportunity to generate leads, ultimately capturing more market share. What’s not to love about that?
This Blue Paper® expounds on diversity as a theory, as a social model and on improving diversity in the workplace as a standard business practice. It is about how it came to be, how it transformed and what it means for business here and now. Diversity is explained in ways that apply to small businesses and giant corporations alike. Whether you decide to take it to the next level and hire a CDO, though, is entirely up to you.
Improving diversity in the workplace: The basics
Diversity is not strictly about people. It’s about ideas; it’s about “diversity of thought.” Our ideas and differences stem from our past, upbringing, and background. The Standpoint theory says that when someone is raised differently than those in the mainstream, they grow up with a perspective that challenges the norm. Theirs is a socially-constructed worldview that is inherently different from the status quo because they grew up outside it.
The Standpoint theory is bolstered by University of Michigan® professor Scott E. Page. Page published a book on the subject titled The Difference in 2007. In it, he uses a math model to illuminate the greater value that comes with diverse teams, one founded on solid data about why marginalized groups of society are more likely to identify weaknesses not immediately noticeable to those on the inside.
According to a Harvard Busines Review study, the most diverse companies were also the most innovative.
When it comes to individual thought processes, many factors influence them. There are more manifest differences like age, gender, race, ethnicity, religion, physical ability and sexual orientation. This “layer” of diversity, the most common, is known as workforce diversity because it refers to noticeable characteristics of the individual. In addition, there are three other layers of diversity.
- Behavioral diversity: Different working and thinking styles, differing values and beliefs
- Structural diversity: Teams that span horizontal and vertical levels of an organization
- Business diversity: Customer markets, community representation and supplier diversity
Each layer contributes to a well-rounded workplace, one that understands the value of diversity within diversity. The kind of business model that wholly embraces diversity in all its forms is called an investment or value-added model. Those kinds of organizations have a positive approach and a strong record of diversity. They are inclusive environments with greater productivity, enhanced problem-solving and, as a result, more market share. Deficit business models, on the other hand, foster negative work environments. Low productivity leads to high turnover and results in excessive spending and lost money.
Diversity through the years
There have been multiple diversity models since its importance was first recognized in the 1960s. At that time, it was based solely on affirmative action, whereby businesses sought to keep up with federal equal employment mandates. The notion of tokenism, or the practice of integrating racial and ethnic minorities, emerged during this era.
Afterward, the social justice model began to take hold. Its premise was still rooted in tokenism, but hiring a minority also became more oriented on the individual—regardless of race, color or creed—as a sound candidate and a real asset to the organization. People began to recognize that those outside the mainstream should be given the same opportunities because it was right to comply with the law and because it was the right thing to do.
The present model is called the inclusion model. It is a truer reflection of the globalized world in which we live. Value is on the multitude of perspectives and diversity of thought that come with a multicultural workforce and “organizations savvy enough to capitalize on them.” As a result, when companies refer to diversity, they say diversity and inclusion.
Moving into the future, more and more organizations are realizing that there is far more to diversity than government compliance and quotas. There is a business case for it, too, namely that companies with a diverse workforce are much better poised to understand the demographics of, and thrive within, a global marketplace.
The progression of organizational diversity
Taylor Cox, Jr. determined that, just as diversity as a business concept has advanced over the years, organizations follow a certain trajectory over time too. For instance, organizations that begin as primarily white male are known as monolithic. Then, as they become more and more open to heterogeneous opportunities, they become plural. Finally, when they fully embrace the value of diversity, they become multicultural.
Unfortunately, not all organizations have reached the multicultural level yet. When the Institute for Corporate Productivity (i4cp) asked over 200 companies how they felt about diversity and inclusion, they found that most companies don’t know how to feel about it. However, in the same study, they discovered a correlation between larger organizations and the likelihood that infrastructure exists to support diversity initiatives—training programs and diversity councils, affinity groups and consultants. The i4cp noticed that 75 percent of organizations with over 10,000 employees offered some diversity and inclusion training.
There are an estimated 1.4 million LGBTQ-owned businesses in the U.S.
Typically, that subsection of proactive organizations is most likely to enjoy the benefits of a diverse workforce. Here are a few:
- Greater levels of creativity and innovation
- Improved product development and marketing
- Enhanced decision-making
- More thorough problem solving
Places with a positively-charged work environment can expect higher personal investment and commitment levels. This, in turn, adds to the positively-infused atmosphere and, if a whole is only as good as the sum of its parts, putting diversity into practice makes for one very respected and reputable company.
New immigrants and their children will account for 83 percent of growth in the working-age population between 2000 and 2050.
There are various approaches to implementing diversity: liberal, radical and transformational. The liberal approach is about operationalizing equal opportunity. It is centered on the idea that all individuals can compete for social rewards regardless of background. The goal of a liberal approach is to realize a fair market where the best candidate is chosen for the job based on performance.
Organizations that take a radical approach seek to directly intervene in work practices to create a more balanced workforce. It is a results-oriented mindset dictated more by the outcome than by rules or regulations.
Then there is the transformational approach which seeks to satisfy both immediate and long-term diversity needs. In the short term, it may mean institutionalizing new recruitment and promotion practices in an effort to eliminate bias. And, to sway the long-term outlook, steps are taken to challenge hegemony without fundamentally unbalancing existing power structures strategically.
Promoting diversity in the workplace: The process
No matter the process, it’s important to note that anything to do with improving diversity in the workplace is a top-down process. It takes an honest and intentional commitment by organizational leaders to create a diverse climate. Just talking about it is never enough; there needs to be a strategic outlook, and the willingness to implement it begins with organizational leadership.
The first step is to curry the favor of leadership. Make your case by doing the math. Use your personnel team as a key resource. Diversity and inclusion policies have everything to do with HR. After all, development opportunities for everyone start with the hiring process.
- Use annual or biannual surveys to determine how your present employees feel about the work atmosphere. Use higher values to represent a job well done so that the greater sum, the greater the satisfaction.
- Mine HR data to determine what kind of diversity is seen in initial applications. Are non-mainstream candidates applying, or are they applying and being turned away?
- The hiring process approach should be holistic. It should consider every part of an applicant. It should be a competitive process centered on skills. Nevertheless, it’s always a good idea to cast a wider net. Branching out increases the likelihood that you will be able to find and hire a talented candidate.
Then, when you’ve got a clearer picture of the state of diversity within your organization, start thinking about the next step: diversity training.
It’s simple. People from different cultures bring different ideas that affect planning and work processes. Diversity training equips employees for the range of changes and differences in opinion that come with meaningful inclusion practices. Diversity training is critical because it helps employees “recognize prejudices and cultural assumptions in their own minds while teaching them skills to respectfully seek to understand other cultures they may come in contact with.”
Diversity training helps create an inclusive environment so that each person feels like a valued and respected member of the community. Here are some examples of what diversity training entails:
- State your case. And not just a case about correctness. Make a business case. Reference morality, but do not be afraid to discuss why diversity is good for business and why you’re pursuing it.
- Focus on different kinds of differences. There are more differences than just race and gender, things like sexual orientation, physical abilities and veteran status.
- Teach some of the basics. Introduce different cultures and go through some of the basics. Mark various cultural holidays on the company calendar and offer employees the opportunity to observe them. You may also want to consider creating safe spaces for different religious practices.
- Go for a powerful impact. Challenge assumptions and biases, get past their intellect and into their heart.
According to the U.S. Bureau of Labor Statistics, in February of 2022, 56.6% of women and 68.3% of men participated in the labor force.
Even though diversity training is viewed as an essential piece of the diversity and inclusion process, its utility has been the subject of contentious debate in the past. However, more recent studies demonstrate the benefits, with companies that include ethnic diversity training showing a 35% better than national average financial returns and those focused on gender diversity showing 15% higher.
Perhaps part of the problem, as seen by Harvard Business Review® contributor Peter Bregman, is that people are categorized into groups which can be “dehumanizing.” He recommends a different method:
Instead of seeing people as categories, we need to see people as people. Stop training people to be more accepting of diversity. It’s too conceptual, and it doesn’t work. Instead, train them to do their work with diverse individuals. Not categories of people. People. Teach them how to have difficult conversations with a range of individuals. Teach them how to manage the variety of employees who report to them. Teach them how to develop the skills of their various employees.
Therein lies the crux of diversity and inclusion: Creating a safe environment for people to communicate with one another (PDF).
The final step to promoting diversity and inclusion in the workplace involves the math you began with: Measure and monitor it monthly and yearly. As you look closely, ask yourself: How many of your qualified new hires in the last year came from a diverse background? Then, compare the data over the last couple of years. What is the trend? Audit and analyze policies, internal training programs, reward systems, performance evaluations, discipline policies and opportunities for advancement. Be on the lookout for any biases and then modify them appropriately.
Recognizing diversity and taking strides to manage it more effectively are great initiatives, but the process is not without hardship. You will encounter challenges. On a management level, communication becomes critical. As a manager, it’s imperative to be aware of your personal biases. How you say things and communicate the changes will be scrutinized closely. As for your team, expect to encounter a fair few assimilation-related bumps. It is never easy to ask people to step outside the socially-constructed norms they grew up within to consider culturally diverse thoughts and opinions. Remember: A company recognized for its diversity is inherently recognized for its mutually respectful environment, thereby earning a positive reputation as an employer.
Chief Diversity Officer
The move to a diversity- and inclusion-aware firm may fall under the responsibilities of someone already in a leadership position. Still, there is a growing trend as of late: Organizations are creating the CDO position to manage all things diversity and inclusion. Chicago-based worldwide executive search firm Heidrick & Struggles® surveyed Fortune 500 companies on the role of diversity executives. They found that, of the 490 companies analyzed, 307 reported an executive role for diversity. They also found a correlation between company ranking and the likelihood that it had an in-house diversity executive. Of the top 100, for example, 81 had diversity officers. Of the last 100, only 46 had them.
Diversity-oriented positions were usually only recognized within HR because their responsibility had more to do with adherence to affirmative action than actionable business outcomes. Today, theirs is the responsibility of illuminating diversity and inclusion issues within the business context. Diversity officers must lead the way on both short- and long-term initiatives to bring meaningful diversity strategy to the forefront of organizational culture so that every contributing member of the team feels as though they can “bring their ‘whole selves’ to work” and as though “everyone has an opportunity to be successful and thereby add business value.”
Women own 28.8 percent of American businesses and of those, Latina-owned businesses are the fastest segment of women-owned businesses.
Some of the expected skills of the CDO are explained further below, courtesy of the aforementioned Heidrick & Struggles report:
- Business knowledge. The CDO must have a thorough understanding of the organization’s status as a successful business and as a respected employer committed to diversity. They must be able to connect the two ideas with ease.
- Vision. As one of the company executives, the CDO must have a vision for diversity and be able to speak about it throughout the organization. They must have a roadmap in mind and meet measurable goals in an effort to reach monthly and yearly objectives.
- Motivated mover and shaker. To be seen as spearheading the cultural shift means one must be able to lead change both horizontally and vertically. The CDO must be systematic in their approach, sharp in their actions, and always remember that there is a distinct relationship between an effective diversity and inclusion strategy and overall business success.
- Credible. Diversity executives must be credible in the eyes of leadership and equally credible among HR professionals. They must be able to work fluidly with all members of the organization and those on the outside to build external credibility.
- Able to influence. CDOs must be able to build relationships within the organization and outside it with peripheral stakeholders. In the end, if they’re going to bring change, they need buy-in from all sides. The CDO must have the ability to persuade others that the consequences of ignoring diversity are very real.
- Committed. Diversity and inclusion efforts should compel the CDO daily and see them through years of hard work. They should believe in diversity “as a value in its own right and as an engine of better business performance.”
The CDO should be perceived as an authority and an expert on diversity and inclusion. They ought to be just as approachable to junior staff as accessible as they make themselves to other members of senior leadership. Lastly, they must believe that they are striving towards a tangible goal of creating a real difference in the organization’s success and the individuals in it.
Diversity in the workplace: Best Practices
The work of Chief Diversity Officers is very real, and there is no greater testament to the worth of their work than the DiversityInc® Top 50 Diversity Index®. Each year, DiversityInc releases a list of the Top 50 companies in diversity and inclusion. Now in its thirteenth year, the survey has enjoyed steady increases in participation as more and more companies commit to diversity and inclusion; in 2012 alone, participation jumped 11 percent to 587 companies. What follows are brief case study overviews of the top two companies in DiversityInc® Top 50 Index: PricewaterhouseCoopers® and Sodexo®.
Case Study 1: PricewaterhouseCoopers
For years, diversity has been an executive priority at audit, tax, and advisory services giant PricewaterhouseCoopers. Chairman and Senior Partner Bob Moritz is a PwC champion of diversity and inclusion. He holds executives and managers accountable for diversity goals at all levels and acts as a cross-cultural mentor within the company. In 2012, PwC ranked first in Top 10 Companies for Recruitment and Retention, first in Top 10 Companies for Executive Women and fifth in Top 10 Companies for Global Diversity. Below is their commitment to diversity as espoused on their website:
Our diversity initiatives and strategies are designed to attract, develop, and advance the most talented individuals regardless of their race, sexual orientation, religion, age, gender, disability status or any other dimension of diversity. Our distinctive approach to diversity is based on a belief that we each have a personal accountability for success in this area. We provide our people with training and tools to help increase their awareness and understanding of differences and why they matter, so their actions can contribute to our inclusive and high-performing workplace culture.
One of the areas in which PwC excels is benefits. It offers exceptional work/life flexibility with onsite religious accommodations, childcare assistance, paid paternity leave, well-being rewards and tax equalization for same-sex couples. Sponsorship and talent are also growing areas for the company. Each year, Moritz requires 2,500 senior PwC partners to identify women and ethnic minorities to “diversify their pool of protégés.” And at the end of the year, each partner is assessed for how well they advocated for and invested in those individuals.
Over 22 percent of U.S. businesses are owner by people of color.
Case Study 2: Sodexo
Sodexo, a food services and facilities management provider, has consistently been in the top two for the last three years of the survey. According to their website:
Sodexo’s leadership in diversity and inclusion stems from our recognition that being a dynamic company requires people with rich backgrounds and diverse perspectives. We celebrate diversity and inclusion in numerous ways including a robust Federal Heritage Month education and awareness program. After all, we live and do business in a diverse world with diverse needs. At every level, the best performance will come from people who understand and appreciate this.
Sodexo ranks fourth in the Top 10 Companies for Blacks, fourth in the Top 10 Companies for Executive Women, fifth in Top 10 Companies for Lesbian, Gay, Bisexual and Transgender (LGBT) Employees and fifth in Top 10 Companies for People with Disabilities. Part of the reason Sodexo does so well is due largely to CEO George Chavel’s longstanding commitment to diversity as a business goal. In fact, he meets with resource groups quarterly and links 25 percent of senior leadership compensation to their ability to reach corporate and personal diversity goals.
According to U.S. census data, by 2050, there will not be a racial or ethnic majority in the United States.
In a 2006 company-wide Engagement Survey, 73 percent of managers agreed that “Sodexo employees are valued for the difference they bring to the workplace.” In 2010, it jumped to 82 percent. To add to the organization’s almost palpable dedication to diversity, 2011 was a record year in hiring: More than 40 percent of new hires were Black, Latino, Asian or American Indian.
Both Sodexo and PricewaterhouseCoopers are role models for diversity in business. They have committed to diversity and recognized it as a serious business concept worth exploring and capitalizing on.
For many years, despite the corporate landscape changes, diversity [and inclusion] in the workplace did not get the attention it rightly deserved. Now is the time.
An organization is only as good as the sum of its parts, and we’re all part of one. Regardless of race, color, creed or sexual orientation, each of us deserves the right to work in an atmosphere of acceptance. Each of us should feel comfortable communicating with those around us.
Our differences define us. Because of them, each of us has something singular to offer: unique insight. It’s high time we harvested the power of our differences and actualized the business acumen by promoting diversity in the workplace.
 The Top 10 Economic Facts of Diversity in the Workplace (2012) Center for American Progress (Article is not online.)
 Propopeak, Mike. “Diversity in the Workplace – Leading Association for Diversity Conferences and Collaboration.” Diversity in the Workplace – Leading Association for Diversity Conferences and Collaboration. Workforce Diversity Network, n.d. Web. 16 Nov. 2012. <http://www.workforcediversitynetwork.com/res_articles_measurediversity_prokopeak.aspx>. (Article is no longer online.)
 “Diversity (business).” Diversity (business) – Wikipedia, the Free Encyclopedia. Wikimedia Foundation, 15 Nov. 2012. Web. 16 Nov. 2012. <http://en.wikipedia.org/wiki/Diversity_%28business%29>. (Article has been revised, quote no longer appears.)
 Oakes, Kevin. “Diversity in the Workplace – Leading Association for Diversity Conferences and Collaboration.” Diversity in the Workplace – Leading Association for Diversity Conferences and Collaboration. Workforce Diversity Network, n.d. Web. 16 Nov. 2012. <http://www.workforcediversitynetwork.com/res_articles_4lessons.aspx>. (Article is no longer online.)
 Ward, Gregg. “What Kind of Diversity Training Really Works? .” Workforce Diversity Network, n.d. Web. 16 Nov. 2012. <http://www.workforcediversitynetwork.com/docs/Articles/Article_WhatKindofDiversityTrainingWorks_Ward_8.08.pdf> (Article is no longer online.)
 The Top 10 Economic Facts of Diversity in the Workplace” (2012) Center for American Progress (Article is not online.)
 Dexter, Billy. “The Chief Diversity Officer Today: Inclusion gets down to business.” Heidrick & Struggles, 2010. Web. 18 Nov. 2012. <http://www.heidrick.com/PublicationsReports/PublicationsReports/The%20Chief%20Diversity%20Officer%20Today.pdf> (Article is no longer online.)
 “The DiversityInc Top 50 Companies for Diversity.” The 2012 DiversityInc Top 50 Companies for Diversity – Diversity Management’s Leading Assessment. DiversityInc, n.d. Web. 16 Nov. 2012. <http://www.diversityinc.com/the-diversityinc-top-50-companies-for-diversity-2012/>. (Article is no longer online.)
 “No. 1: PricewaterhouseCoopers.” No. 1: PricewaterhouseCoopers – DiversityInc. DiversityInc, n.d. Web. 16 Nov. 2012. <http://www.diversityinc.com/pricewaterhousecoopers/>.(Article is no longer online.)
 “No. 2 Sodexo.” Sodexo: No. 2 in the DiversityInc Top 50. DiversityInc, n.d. Web. 16 Nov. 2012. <http://www.diversityinc.com/sodexo/> (Article is no longer online.)
 Diversity & Inclusion. Sodexo, n.d. Web. 18 Nov. 2012. <http://www.sodexousa.com/usen/citizenship/diversity/diversity.asp>. (Article is no longer online.)