Guest Editorial
Employee Value
Reginald Butler and John Verderese, 07-12-2009
In the midst of the recession, many businesses are focusing on the basics, and diversity is not on — or is falling off — their radar screens. But the reality is diversity and inclusion matter more than ever to future success. Companies are discovering that to best position themselves for the next business cycle, they need to harness the collective power of their people across the broadest spectrum.
While real, the business benefits of diversity and inclusion efforts do not come easily or automatically. Despite being in the midst of one of the worst economic crises of our time, diversity executives must continue the hard work of changing how their organizations think about diversity and inclusion if they want to help them achieve sustainable competitive advantage in the global business environment.
Diversity efforts must be more than just initiatives or stand-alone programs that can be toppled by budget cuts or become victims of lethargy. Success will not be solely defined by how leaders deal with diversity in terms of strategic planning, marketing, talent management and mergers and acquisitions. It will depend on how the desired mindset and behaviors cascade down from the C-suite and permeate through business-unit managers, teams and individuals alike.
Five to 10 years down the road, organizations that dismiss diversity may find themselves with a weak employee value proposition (EVP), unable to attract and retain the customers, employees and business partners that comprise our changing world.
As an employee-centric approach to well-being, the financial benefits of an EVP are only a small slice of the equation. Today, employees weigh heavily offerings that impact their career development, work-life balance, the aesthetics of the physical workplace environment and a diverse employee base. All of these are intertwined with an organization’s mission and ability to provide a sense of community and social responsibility.
In today’s business environment, organizations must strategically define and measure their EVP’s strength, then align it with a diverse pool of employees. Further, diversity and inclusion affects external stakeholders such as customers and suppliers, not only a company’s workforce and internal operations.
A number of key drivers have contributed to this change in approach. Chief among them are the changing demographics in the United States. Minorities are in fact the majority in the U.S. population, and their consumer purchasing power — total personal income, after taxes — is significant. According to figures from the Selig Center for Economic Growth, in 2013, Hispanics will account for 9.9 percent of all U.S. buying power, African-Americans will have an 8.8 percent share, and Asians will represent a 5.4 percent share. Further, a Catalyst study by Witeck Combs predicts gay, lesbian, bisexual and transgender buying power to reach $835 billion by 2011.
Great companies deliver on their EVPs. Rather than viewing them as static, these businesses know their EVPs should be dynamic and continuously evolving. They invest the time and effort necessary to ensure their EVPs keep pace with and fully address the needs of different worker demographics, industry sectors and business objectives and goals — all against a backdrop of game-changing economic conditions.
The value employees get from their organizations correlates to value they impart to their customers. Therefore, if diversity efforts slacken, an EVP may overpromise or under-deliver. This can damage an organization’s brand and weaken its workforce, which has a direct impact on business success.
One food and beverage company leveraged its workforce diversity to successfully introduce a new product to the growing U.S. Hispanic market. When conducting its market research to identify how a product would best meet consumer needs, the company turned to its internal Hispanic affinity group. Ultimately, the company based its Hispanic market strategy on the feedback that came out of that process, which is a great example of how an inclusive workforce can have a profound customer impact.
The economic downturn can be a blessing in disguise, giving companies easier access to the best talent. It’s a myth that in tough economic times the best talent stays put. High-performing individuals want to be part of a high-performing organization, and a company’s commitment to diversity and inclusion is one of the key dimensions they will evaluate. «
Reginald Butler and John Verderese are managing directors in the people and change practice at PricewaterhouseCoopers LLP. They can be reached at editor@diversity-executive.com.
