The Business Case for Diversity

Former World Bank Chief Economist. Whenever we diminish equality of opportunity, it means we are not using some of our most valuable assets – our people – in the most productive way possible. Joseph Stiglitz, Nobel prize winner, Former World Bank Chief Economist. May 2011 Necessary but not sufficient (from The Loudest Duck by Laura Liswood) “Many major businesses have taken a serious and informed strategy for incorporating diversity into their workplace. Most offer a strong business case for having a workforce that is diverse – for example, the war for talent; trying to recruit and retain the best people; the need to better reflect an organization’s clients; higher profitability; the global nature of the firm; the legal scrutiny and laws now prevalent in many countries. These companies have put the building blocks in place, so what you see are the trainings, the senior-level rhetoric and commitment, the various diversity-related committees, and the networks for women, blacks, Asians or Hispanics, or gays and lesbians. “I don’t believe that these foundational efforts will actually change cultures. While I am not suggesting that we get rid of these building blocks, I don’t think that they will ever level the playing-field or create true meritocracies for everyone who works within a corporation. They are not sufficient. Why? Because we all take our unconscious selves to the workplace – whether we mean to or not. Again, we bring our beliefs, perceptions, understandings, misunderstandings, and our archetypes of who we think people are.  We incorporate these impressions instinctively as we think, speak and even act in ways that we’ve deemed natural.  By doing so, we guarantee that the playing field will remain unbalanced, and that the organization of which we are a part will never truly get the benefit of its diversity, or function at its highest level.”

Diverse Auckland 150+ ethnic groups live in Auckland 44% of Aucklanders will be of Asian and Pacific Island descent by 2020 By 2030, 330,000 will be over 65 years old and 355,000 will be under 15 20 new people are arriving every day Family structures are changing Auckland is an increasingly diverse city. The latest Auckland Council statistics show that the city is now made up of over 150 ethnic communities. The population increasingly comprises people of Asian and Pacific Island descent (44% by 2020) and new immigrants are arriving every day. Households across NZ are changing with an increased number of single parent families (2006 Census figures 10% cf to 7% in 1986) and an increasing number of fathers looking to have a more hands-on roles with their children (68% - Family Commission publication) . And the population is ageing. The Auckland-related figures on the slide come from the Auckland Plan discussion document, Auckland Unleashed, published by Auckland Council.

Diverse Wellington 22.9% of people in the Wellington region were born overseas 9.5% or people are from a non-English speaking background 159 ethnic groups new people are arriving every day Family structures are changing Source: Wellington City Council website

The future professional labour force 7.4% students are Māori 8.5% students are Pacific 55% of students are women 36% of students are Asian 21% of students are over 30 2.6% of students have disabilities These latest figures from University of Auckland give an indication of what our future professional workplace might look like.

Diverse talent pool Four generations working together Changing family structures Increasing number of disabled Almost 25% of NZ’s workforce is 50-64 yrs old Labour force decline overall particularly in 15-24 year age group Increasingly diverse culturally and ethnically There will be a 50% increase in the proportion of Pacific youth in the youth workforce over next 15-20 years.

Making good business sense Better decision making at board level Wider talent pool Increased adaptability Enhanced employment and customer brand When diversity is well managed, businesses/organisations benefit. Better decision making at board level: As seasoned director and ex-CEO of Arnotts Boardroom Practice Ltd’s Janine Smith says: “One of the most important factors in creating an effective and balanced board is diversity of thought.” One of the most successful boards she has been on is comprised of 5 women and 4 men with a range of professional backgrounds: “The diversity of skills provide a wider perspective for discussion and debate leading to better quality decisions.” Wider talent pool eg. GPC Electronics Operations Manager John Watt says that without the specialist skills migrant staff bring to GPC, the company wouldn't enjoy its current success. "Across the company, 83 per cent of our workers are migrants, all the way up to the management team," says John, who himself migrated from Scotland five years ago. "We couldn't exist without them.” 3) Increased adaptability: Employees with diverse backgrounds can help companies adapt to changing markets. A NZ Herald article showed that in 2010 more than 50% of Master of Commerce graduates were of Chinese descent. Scott Perse, Partner at PwC: “The ability to operate in both a Chinese and New Zealand business context is something few people have and it’s becoming a highly sought after commodity.” 4) Enhanced employment and customer brand eg. Margaret Doyle of BDO Taranaki: “One new client told us she chose us as her business advisor because she had heard so much about our culture and flexibility that she just knew she wanted to work with us.”

Making good business sense Increased employee engagement and productivity Reflects diverse markets in New Zealand and overseas Improved staff retention and customer service 5) Increased employee engagement & productivity eg. The Warehouse SKIP parenting programme for staff: employee engagement rose from 77.5% to 88.9%, there was a 20% increase in productivity, and sick days came down from 6.4% days per person (2008) to 4.5 days (2010). 6) Reflect diverse markets. The culture awareness supplied by migrant staff from the Netherlands, the UK, the Middle East, China and Malaysia is critical to the success of GPC Electronics. 7) Improved staff retention & customer service eg. Mt Albert Pak’n Save – an appreciation of its diverse workforce saved $100,000, widened the talent pool and helped match staff with customer needs.

Consider your reactions when you look at these people Consider your reactions when you look at these people. You’ll probably arrive at diversity on a number of conscious levels: age, gender, ethnicity but you will probably make some unconscious assumptions even in these areas and they may be incorrect or misleading. We all suffer from unconscious bias. Beyond this, diversity is also about the unconscious stuff, the invisible and unconscious dimensions of diversity (see next two slides) that we as individuals need to strive to acknowledge and understand which will enable organisations to affect real change.

Organisation Role And Level What is Diversity? Dimensions of diversity Religion Geographic Location Military Experience Education Communication Style Work Family Status Organisation Role And Level Income First Language Age Gender Sexual Orientation Ethnic Heritage Race Mental/Physical Abilities and Characteristic Primary Dimension Secondary Dimension As well as “visible” diversity markers (such as gender and age), diversity includes “invisible” differences – sexual orientation, religion, personality type. Sometimes the differences between people are subtle – many of the so-called secondary dimensions have an enormous impact on how people interact and perceive the world. Valuing diversity means taking time to explore each person’s personality and style and value their different contributions, as well as avoiding making assumptions based on “visible” differences. People’s values can greatly shape their behaviour and have a big impact on workplace decisions. Consider this example: a number of people were asked which, if there were only one, they would choose to save on a sinking ship – their mother, their child, or their partner. 90% of people from western cultures chose their child, (hypothetically if they did not have one!) But most people from eastern or Asian cultures chose their mother. This is because western cultures look to the future and place great value on the next generation, while eastern cultures tend to value the past and hold the previous generation in high esteem. Our differing values create different choices at work. 1996. Implementing Diversity by Marilyn Loden. Mc-Graw Hill Publishing, Burr Ridge, IL

What is Diversity? So, diversity is not just about those conscious and visible things like age, race and gender. Diversity of thought of skills and backgrounds, perspectives and religion and a raft of other elements are equally important in the mix.