Diversity is the difference
According to Diversity Journal, the predicted cost of the London Olympics has risen from an initial £2.37 billion (HK$29.06 billion), calculated when London won the bid in 2005, to a possible £24 billion, largely due to contracts that have been essential for the games’ diversity targets. A number of more-expensive suppliers were successful in their Olympic bids because they were able to fulfil all of the accessibility issues.
The emphasis and importance of diversity does not only apply to the Olympics but also to today’s business world – and not simply to enhance a corporation’s image or branding.
“Some organisations’ customers, companies and governments stipulate in their procurement processes and contracts that they will favour giving business to companies that promote diversity and inclusiveness,” says Nick Marsh, managing director, Harvey Nash Asia-Pacific.
Approximately 10 per cent of Fortune 500 companies actively endorse firms that are focused on diversity via their procurement processes. Another 20 to 30 per cent look more favourably on those with a focus on diversity, although there is no specific impact via the procurement process, Marsh says.
Having a culturally diverse workforce can benefit an organisation in many ways, Marsh explains. “An organisation that values people from all backgrounds is more likely to be open to fresh ideas and multiple perspectives, which can benefit the business’ approach to opportunities and problem-solving,” he says.
“The Fortune 500 companies we work with, for instance, can demonstrate better decision-making processes with better-balanced management teams, as people from differing backgrounds can add knowledge and experiences to decision-making that enables those decisions to be stronger and longer lasting. Naturally, this has a positive impact on the bottom line.”
Age diversity too, Marsh points out, has a positive impact on an organisation’s performance by creating an environment where each generation offers different skill sets and talents.
“Younger employees, for example, will likely have a strong grasp of the possibilities of technology and the use of mediums such as social networking, whereas more mature professionals often have exceptional levels of experience and knowledge of a business or sector and well-developed interpersonal skills,” Marsh says.
“In a mixed-age workforce where companies value knowledge, experience and skill, employees of all ages have the opportunity to teach, share and learn from one another.”
Stuart Elliott, managing director at recruitment firm Elliott Scott, says: “The biggest benefit [for firms embracing diversity] is making your organisation more like the customers you serve. Without a diverse workforce, how are you supposed to understand what clients need or think?” he asks.
Marsh says: “After the major globalisation process of recent decades, businesses, in particular big, global, financial-services firms, are now focused on localising their efforts as consumers become increasingly sophisticated and demand solutions and products tailored to their individual wants and needs. Professional-services firms are at the forefront of this push, followed closely by TMT [technology, media and telecommunications] firms.”
An organisation could embrace or promote diversity at work for its benefits, or be forced to do so.
According to Marsh, multinational companies see pressure to suitably reflect the markets they service coming from various quarters such as government, unions, the media and employees themselves.
“The world’s top four accounting firms – Deloitte Touche, PwC, Ernst & Young and KPMG – have been forced to end the dominance of foreign partners in their Chinese operations, instead bringing in Chinese citizens for the top jobs. The new rules now oblige the Big Four to have a maximum of 40 per cent foreign partners, falling to 20 per cent by 2017,” Marsh says.
Elliot says: “The US, Europe and Australia are probably ahead of anywhere else in the world as legislation in those regions and countries is such that you have to have a stringent approach to diversity or you can risk legal action. For me, Asia has a lot of work to do. Companies are trying to do more but are not helped by rather lax legal legislation.”
So, how should managers or top management “manage” diversity? Is there a correct balance of diversity at work?
“[Diversity] should be embraced and seen as a real benefit to your business,” Elliot says. “People can potentially talk about a ‘balance’ in the workplace but I don’t think that is the best way to look at it. I like to look at diversity as something we should all be aware of, but it shouldn’t stop me from hiring the best person.
Companies shouldn’t be hiring someone because they haven’t hit their diversity ratios. It should still come back to talent and being the right person for the role.”
Marsh says: “Diversity and inclusion need to be led from the top. It must be at the heart of values, and leaders must be held accountable in the execution. The ultimate aim is to build an open and respectful culture that will attract future diverse talent.”