October 12, 2010 Workplace Diversity Practices: How Has Diversity and Inclusion Changed Over Time? A Comparative Examination: 2010 and 2005

Workplace Diversity Practices: How Has Diversity and Inclusion Changed Over Time? | ©SHRM 2010 Introduction Workplace Diversity Practices: How Has Diversity and Inclusion Changed Over Time? In 2005, SHRM released the Workplace Diversity Practices research report, which addressed diversity practices in organizations from the perspective of HR professionals. Several of the survey questions from this report were included in a recent 2010 study to determine how diversity and inclusion in the workplace has changed over the last five years. When possible, analyses of the 2010 survey results by organizations’ staff size, sector and operations locations are presented. For the purpose of this research, workplace diversity is broadly defined as an inclusive corporate culture that strives to respect variations in employee personality, work style, age, ethnicity, gender, religion, socioeconomics, education and other dimensions in the workplace. 2

Workplace Diversity Practices: How Has Diversity and Inclusion Changed Over Time? | ©SHRM 2010 Summary This SHRM study provides mostly encouraging news about the state of diversity in the workplace. The study shows increases in the percentage of companies that provide training on diversity issues, the number of organizations that have a diverse board of directors and the percentage of organizations reporting that their diversity practices were effective in achieving their organization’s desired outcomes. However, over the last five years, there has been a slight decrease in the percentage of organizations with practices that address workplace diversity. This slight decline is not surprising, as it is likely attributable to the unprecedented global economic downturn that began in late Other research conducted by SHRM has revealed that the downturn resulted in across-the-board cuts to many HR initiatives and practices. [1] [1] [1] Society for Human Resource Management. (2010, June). SHRM Poll: Financial Challenges to the U.S. and Global Economy and Their Impact on Organizations. Retrieved from Society for Human Resource Management. (2010, October). The Post-Recession Workplace Competitive Strategies for Recovery and Beyond. Alexandria, VA: SHRM. 3

Workplace Diversity Practices: How Has Diversity and Inclusion Changed Over Time? | ©SHRM 2010 Key Findings The prevalence of diversity practices in the workplace has decreased slightly in some organization size ranges. In 2010, 68% of organizations indicated that they have practices in place that address workplace diversity, compared with 76% of organizations surveyed in Larger organizations (those with 2,500 or more employees), government agencies, publicly owned for-profit companies, nonprofit organizations and those with multinational operations were more likely to address workplace diversity. Are companies still leveraging diversity training opportunities? Yes; among companies with diversity practices in place, the percentage offering training opportunities increased slightly from 67% in 2005 to 71% in The percentage of companies providing mandatory training for top-level executives and nonmanagerial-level employees increased over the last five years, while mandatory training for nonexecutive managerial-level employees was unchanged. Most organizations report their diversity practices were effective. Eighty-four percent of businesses believed their diversity practices were either “very effective” or “somewhat effective” in achieving their organization’s desired outcomes. This percentage increased slightly from 83% in

Workplace Diversity Practices: How Has Diversity and Inclusion Changed Over Time? | ©SHRM 2010 Key Findings What are the most important diversity practice outcomes? In 2010, the top reported outcomes were: 1) improved public image of the organization, 2) reduced costs associated with turnover, absenteeism and low productivity, 3) improved financial bottom line (profits), 4) increased organizational competitiveness, 5) decrease in complaints and litigation, and 6) retention of a diverse workforce. Improved public image went from the fourth most important outcome in 2005 to the most important outcome for companies in Measuring the ROI of diversity practices is still a challenge. Over the last five years, fewer organizations reported collecting diversity return-on-investment data. This percentage dropped from 14% in 2005 to 8% in The top measures organizations use to gauge their efforts has remained unchanged over the past five years: 1) the number of diverse employees recruited, 2) the number of diverse employees retained, and 3) evidence of diversity at all levels of the workforce (e.g., rank-and-file to senior management). Most organizations reported having a diverse board of directors. Sixty-six percent of respondents said that their organization’s board of directors was diverse in terms of age, ethnicity, gender, religion, socioeconomics, education, etc. This percentage increased from 53% in

Workplace Diversity Practices: How Has Diversity and Inclusion Changed Over Time? | ©SHRM 2010 Does your organization have in place any practices that address workplace diversity? 6 Note: “Not sure” responses were excluded from this analysis.

Workplace Diversity Practices: How Has Diversity and Inclusion Changed Over Time? | ©SHRM 2010 Does your organization have in place any practices that address workplace diversity? Practices that address workplace diversity (by staff size): Larger organizations (those with 500 or more employees) were more likely than organizations with fewer than 100 employees to report having in place practices that address workplace diversity. Practices that address workplace diversity (by organization sector): Government agencies (83%), publicly owned for-profit companies (78%) and nonprofit organizations (71%) were more likely than privately owned for-profit companies (59%) to have practices that address workplace diversity. Practices that address workplace diversity (by operations location): Organizations with multinational operations (83%) were more likely than organizations with U.S.-only operations (65%) to address workplace diversity. 7 Comparison of the 2010 results by Organization Staff Size, Organization Sector and Operations Location Smaller OrganizationsLarger OrganizationsDifferences Based on Organization Staff Size 1 to 99 employees (55%)500 or more employees (90%) Larger organizations > smaller organizations

Workplace Diversity Practices: How Has Diversity and Inclusion Changed Over Time? | ©SHRM 2010 Please indicate which of the following diversity practices your organization participates in Employ recruiting strategies designed to help increase diversity within the organization79% Engage in community outreach related to diversity (e.g., links between organization and educational institutions, government) 71%74% Align diversity with business goals and objectives68%- Tailor career development opportunities specifically for diverse employees59%28% Provide career development opportunities designed to increase diversity in higher-level positions within the organization (e.g., mentoring, coaching) 56%63% Collect measurements/metrics on diversity-related practices52%56% Demonstrate diversity awareness in the form of celebrating different cultural events (e.g., Black History Month, Hispanic Heritage Month) 48%47% Employ retention strategies designed to help retain a diverse workforce47%52% Employ strategies to ensure diversity in the organization’s suppliers, contractors, etc.47%51% Hold people managers accountable for diversity-related tasks or outcomes in the performance management process 47%- Ensure diversity is a consideration in every business initiative and policy45%73% Support employee affinity groups (employee networks, which are groups formed around an aspect of diversity) 30%29% Offer training in English as a second language22%20% Provide incentive pay for management linked to the achievement of organizational diversity goals 10%12% 8 Note: Percentages do not total 100% due to multiple response options. Excludes respondents who indicated that their organizations did not have diversity practices in place. A dash (--) indicates that this particular question was not asked in 2005.

Workplace Diversity Practices: How Has Diversity and Inclusion Changed Over Time? | ©SHRM 2010 How important are the following outcomes of diversity practices to your organization? 9 Note: “Not sure” responses were excluded from this analysis. Percentages may not total 100% due to rounding. The figure is sorted by "very important" responses.

Workplace Diversity Practices: How Has Diversity and Inclusion Changed Over Time? | ©SHRM 2010 How important are the following outcomes of diversity practices to your organization? Improved public image of the organization76%73% Reduced costs associated with turnover, absenteeism and low productivity73%78% Improved financial bottom line (profits)72%74% Increased organizational competitiveness71%70% Decrease in complaints and litigation69%74% Retention of a diverse workforce69%66% Diversity of thought and decision-making in the organization67%66% Recruitment of a diverse workforce66% Diversity at all levels of the workforce60%71% A diverse client/customer base59%58% Improved employee opinion survey results/diversity audit results50%51% 10 Note: Table represents "very important" responses.

Workplace Diversity Practices: How Has Diversity and Inclusion Changed Over Time? | ©SHRM 2010 Does your organization provide any training on diversity issues? 11

Workplace Diversity Practices: How Has Diversity and Inclusion Changed Over Time? | ©SHRM 2010 Does your organization provide any training on diversity issues? Training on diversity issues (by staff size): Larger organizations (those with 500 or more employees) were more likely than organizations with fewer than 100 employees to report having training on diversity issues. Training on diversity issues (by organization sector): Government agencies (90%) and nonprofit organizations (85%) were more likely than privately owned for-profit companies (58%) to provide training on diversity issues. 12 Comparison of the 2010 results by Organization Staff Size and Organization Sector Smaller OrganizationsLarger OrganizationsDifferences Based on Organization Staff Size 1 to 99 employees (52%)500 or more employees (88%) Larger organizations > smaller organizations

Workplace Diversity Practices: How Has Diversity and Inclusion Changed Over Time? | ©SHRM 2010 Please indicate whether top-level executives (e.g., CEO, president, CFO) have the opportunity to receive diversity training and whether the training is voluntary or mandatory 13 Note: Excludes respondents who indicated that that their organizations did not provide diversity training. Percentages may not total 100% due to rounding.

Workplace Diversity Practices: How Has Diversity and Inclusion Changed Over Time? | ©SHRM 2010 Please indicate whether top-level executives (e.g., CEO, president, CFO) have the opportunity to receive diversity training and whether the training is voluntary or mandatory Mandatory training for top-level executives (by organization sector): Publicly owned for-profit companies (86%) were more likely than government agencies (44%) to have mandatory training on diversity for their top -level executives. Mandatory training for top-level executives (by operations location): Organizations with multinational operations (80%) were more likely than organizations with U.S.-only operations (61%) to have mandatory training for their top -level executives. 14 Comparison of the 2010 results by Organization Sector and Operations Location

Workplace Diversity Practices: How Has Diversity and Inclusion Changed Over Time? | ©SHRM 2010 Please indicate whether nonexecutive managerial-level employees (e.g., director, manager) have the opportunity to receive diversity training and whether the training is voluntary or mandatory 15 Note: Excludes respondents who indicated that that their organizations did not provide diversity training. Percentages may not total 100% due to rounding.

Workplace Diversity Practices: How Has Diversity and Inclusion Changed Over Time? | ©SHRM 2010 Please indicate whether nonexecutive managerial-level employees (e.g., director, manager) have the opportunity to receive diversity training and whether the training is voluntary or mandatory Mandatory training for nonexecutive managerial-level employees (by organization sector): Publicly owned for-profits (77%) and privately owned for-profit companies (76%) were more likely than government agencies (44%) to have mandatory training on diversity for their nonexecutive managerial-level employees. 16 Comparison of the 2010 results by Organization Sector

Workplace Diversity Practices: How Has Diversity and Inclusion Changed Over Time? | ©SHRM 2010 Please indicate whether nonmanagerial-level employees have the opportunity to receive diversity training and whether the training is voluntary or mandatory 17 Note: Excludes respondents who indicated that that their organizations did not provide diversity training. Percentages may not total 100% due to rounding.

Workplace Diversity Practices: How Has Diversity and Inclusion Changed Over Time? | ©SHRM 2010 Does your organization have a method for measuring the impact of its diversity practices? 18 Note: “Not sure” responses were excluded from this analysis.

Workplace Diversity Practices: How Has Diversity and Inclusion Changed Over Time? | ©SHRM 2010 Does your organization have a method for measuring the impact of its diversity practices? Method for measuring the impact of diversity practices (by staff size): Larger organizations (those with 500 or more employees) were more likely than organizations with fewer than 100 employees to report having a method for measuring the impact of their diversity practices. Method for measuring the impact of diversity practices (by organization sector): Publicly owned for-profit companies (56%) were more likely than privately owned for-profit companies (26%) to have a method for measuring the impact of their diversity practices. Method for measuring the impact of diversity practices (by operations location): Organizations with multinational operations (47%) were more likely than organizations with U.S.-only operations (28%) to have a method for measuring the impact of diversity practices. 19 Comparison of the 2010 results by Organization Staff Size, Organization Sector and Operations Location Smaller OrganizationsLarger OrganizationsDifferences Based on Organization Staff Size 1 to 99 employees (19%)500 or more employees (55%) Larger organizations > smaller organizations

Workplace Diversity Practices: How Has Diversity and Inclusion Changed Over Time? | ©SHRM 2010 Which of the following does your organization use to measure the impact of its diversity practices? 2010 (n = 70) 2005 (n = 87) Number of diverse employees recruited77%89% Number of diverse employees retained63%75% Evidence of diversity at all levels of the workforce (e.g. rank-and-file to senior management) 57%72% Employee opinion surveys/diversity audits51%68% Improved corporate culture44%53% Improved public image43%52% Information gleaned from exit interviews43%- Number of complaints and litigation41%52% Client/customer base diversity39%46% Analysis of employee performance assessments36% Reduced costs associated with turnover, absenteeism and low productivity33%45% Recognition/awards through published lists or diversity organizations31% Improved financial bottom line (profits)30%37% Increased organizational competitiveness26%33% Evaluation of employees’ sensitivity/knowledge of diversity24%35% Increased levels of innovation and creativity23%- 20 Note: Percentages do not total 100% due to multiple response options. Excludes respondents who indicated that their organizations did not measure the impact of their diversity practices. A dash (--) indicates that this particular question was not asked in 2005.

Workplace Diversity Practices: How Has Diversity and Inclusion Changed Over Time? | ©SHRM 2010 Does your organization conduct analysis to determine the return on investment (ROI) for its diversity practices? 21 Note: “Not sure” responses were excluded from this analysis.

Workplace Diversity Practices: How Has Diversity and Inclusion Changed Over Time? | ©SHRM 2010 Does your organization conduct analysis to determine its return on investment (ROI) for diversity practices? ROI measured by organizations (by staff size): Larger organizations (those with 500 or more employees) were more likely than organizations with fewer than 100 employees to report measuring the ROI of their diversity practices.. ROI measured by organizations (by operations location): Organizations with multinational operations (24%) were more likely than organizations with U.S.-only operations (3%) to measure the ROI of their diversity practices. 22 Comparison of the 2010 results by Organization Staff Size and Operations Location Smaller OrganizationsLarger OrganizationsDifferences Based on Organization Staff Size 1 to 99 employees (1%) 500 or more employees (10%) Larger organizations > smaller organizations

Workplace Diversity Practices: How Has Diversity and Inclusion Changed Over Time? | ©SHRM 2010 Overall, how effective do you believe your organization’s diversity practices are in achieving your organization’s desired outcomes? 23 Note: “Not sure” responses were excluded from this analysis. Percentages do not total 100% due to rounding.

Workplace Diversity Practices: How Has Diversity and Inclusion Changed Over Time? | ©SHRM 2010 Please indicate how well you believe the following statements describe your organization 24 Note: Percentages may not total 100% due to rounding. The figure is sorted by “describes very well” responses.

Workplace Diversity Practices: How Has Diversity and Inclusion Changed Over Time? | ©SHRM 2010 Please indicate how well you believe the following statements describe your organization My organization is inclusive of diverse cultures and values53%54% Senior management at my organization believes that diversity is important 53% Diversity practices are primarily developed by the HR department 49%45% My organization promotes and advances diverse talent49%48% Employees at my organization believe that diversity is important42%40% My organization’s workforce is diverse at all levels (e.g., rank- and-file and senior management) 31%30% Employees at my organization believe that senior management is committed to workplace diversity 29%34% Diversity practices give my organization a competitive advantage28%32% Diversity practices have positively affected my organization’s financial bottom line 16%17% 25 Note: Note: Table represents " describes very well” responses.

Workplace Diversity Practices: How Has Diversity and Inclusion Changed Over Time? | ©SHRM 2010 Please indicate which of the following areas of diversity your organization’s diversity practices cover Areas of Diversity Covered by Organizations 2010 (n = 236) 2005 (n = 305) Ethnicity92%88% Race89%86% Gender88%89% Age83%84% National origin73%- Religion70%68% Disability69%73% Veteran status64%- Sexual orientation61%60% Languages spoken44%49% Gender identity and/or expression42%- Parental status38%- Personality type (e.g., MBTI, FIRO-B, etc.)23%- 26 Note: Percentages do not total 100% due to multiple response options. A dash (--) indicates that this particular area was not asked in 2005.

Workplace Diversity Practices: How Has Diversity and Inclusion Changed Over Time? | ©SHRM 2010 Do you agree that your organization’s board of directors is diverse (e.g., in terms of age, ethnicity, gender, religion, socioeconomics, education)? 27 Note: “Not sure” and “not applicable” responses were excluded from this analysis. Percentages do not total 100% due to rounding.

Workplace Diversity Practices: How Has Diversity and Inclusion Changed Over Time? | ©SHRM Organizational Demographics 28

Workplace Diversity Practices: How Has Diversity and Inclusion Changed Over Time? | ©SHRM 2010 Demographics: Organization Industry Industry Health care, social assistance (e.g., nursing homes, EAP providers)17% Services—professional, scientific, technical, legal, engineering13% Manufacturing—other13% Educational services/education8% Financial services (e.g., banking)5% Other services (e.g., nonprofit, church/religious organizations)5% Government/public administration—federal, state/local, tribal4% Insurance4% Retail/wholesale trade4% Consulting3% High-Tech3% Arts, entertainment, recreation2% Association—professional/trade2% Construction, mining, oil and gas2% 29 Note: n = 389. Percentages do not total 100% due to rounding.

Workplace Diversity Practices: How Has Diversity and Inclusion Changed Over Time? | ©SHRM 2010 Demographics: Organization Industry (continued) Industry Manufacturing—auto/auto-related2% Publishing, broadcasting, other media2% Services—accommodation, food and drinking places2% Telecommunications2% Transportation, warehousing (e.g., distribution)2% Utilities2% Biotech1% Pharmaceutical1% Real estate, rental, leasing1% Other1% 30 Note: n = 389. Percentages do not total 100% due to rounding.

Workplace Diversity Practices: How Has Diversity and Inclusion Changed Over Time? | ©SHRM 2010 Demographics: Organization Sector 31 Note: n = 388. Percentages do not total 100% due to rounding.

Workplace Diversity Practices: How Has Diversity and Inclusion Changed Over Time? | ©SHRM 2010 Demographics: Organization Staff Size 32 Note: n = 365. Percentages do not total 100% due to rounding.

Workplace Diversity Practices: How Has Diversity and Inclusion Changed Over Time? | ©SHRM 2010 Demographics: Region 33 Note: n = 373

Workplace Diversity Practices: How Has Diversity and Inclusion Changed Over Time? | ©SHRM 2010 Demographics: Other 34 Note: n = 391 U.S.-based operations75% Multinational operations25% Single-unit company: a company in which the location and the company are one and the same 36% Multi-unit company: a company that has more than one location 64% Multi-unit headquarters determines HR policies and practices 48% Each work location determines HR policies and practices 3% A combination of both the work location and the multi-unit headquarters determine HR policies and practices 49% Is the organization a single-unit company or a multi-unit company? Are HR policies and practices determined by the multi- unit corporate headquarters, by each work location or both? Does the organization have U.S.-based operations (business units) only or does it operate multinationally? Note: n = 363 Note: n = % of organizations indicated that employees at their work location were unionized. Note: n = 387

Workplace Diversity Practices: How Has Diversity and Inclusion Changed Over Time? | ©SHRM 2010 Response rate = 15% Sample comprised of 402 randomly selected HR professionals from SHRM’s membership Margin of error is +/- 4% Survey fielded August 9–27, Methodology SHRM Poll: Workplace Diversity Practices