The “Impact of Diversity Initiatives on Bottom Line” survey, released by the Society for Human Resource Management (SHRM), included responses of 121 human-resources professionals from Fortune 1000 companies and companies on Fortune magazine’s list of the 100 Top Companies To Work For.
An overwhelming majority of respondents said diversity initiatives have impacted their company’s bottom line in several positive ways. For example, 79 percent said it improved corporate culture, 77 percent said it helped recruit new employees and 52 percent cited better client relations. Ninety-one percent said diversity initiatives helped their organizations maintain a competitive advantage.
“Many HR professionals at top U.S. companies say the number of African-American, Hispanic, female and older employees in their workforce have increased over the past five years,” said SHRM Director of Research Debra Cohen. “These top companies are taking advantage of the clear benefits of diversity programs and a diverse workforce as a competitive edge.”
Cohen said that although the majority of diversity programs were started as recently as the 1990s, they have been developing rapidly.
“If accountability for diversity doesn’t move out of HR it will not succeed in the long run,” said Peggy Hazard, managing director of Simmons Associates, a diversity, human-resources and organizational consulting firm based in New Hope, Pa.
Although Hazard doesn’t see this happening quickly in most companies, she said it’s “largely because companies still haven’t nailed a compelling and quantified business case for diversity specific to their company.”
When and if they do, diversity initiatives will get out of HR and gain a seat at the executive strategy table. “Only then will executives have a compelling reason to hold line managers accountable for results in this area,” Hazard said.
Fifty percent of respondents reported having staff dedicated exclusively to diversity initiatives. The majority of companies (79 percent) currently house their diversity department within human resources, while only 14 percent said they are located in another department. When diversity was housed in human resources, the average budget for diversity was $239,000. For companies that had a separate diversity department, however, the average diversity budget was $1.5 million. The range for diversity department budgets was $30,000 to $5.1 million.