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Diversity Training--a Necessity?
In 2004, Enterprise Rent-a-Car supported a study by the National Urban League that surveyed over 5,500 American workers, including managers and CEOs. The results revealed that fewer than half of the executives surveyed believe that their own companies are effectively managing diversity. In addition, almost 60 per cent feel partly at fault for not being sufficiently involved in workplace diversity training (Fisher, 2004).
The diversity training field forms part of a multibillion dollar training industry resulting primarily from recent demographic shifts, increasing globalization, and anti-workplace discrimination laws.
Laws and Regulations
The U.S. Equal Employment Opportunity Commission (EEOC) enforces all federal laws prohibiting job discrimination in the United States. Perhaps the most notable of these is Title VII of the Civil Rights Act of 1964 (Title VII) that prohibits all employment discrimination based on race, religion, sex, color, or national origin.
In addition to Title VII, there are a host of federal laws that prohibit job discrimination, addressing such issues as equal compensation and employment opportunities, unbiased job assignments, equitable promotions as well as age, disability, and sex-based employment discrimination (U.S. Equal Employment Opportunity Commission, 2005). These regulations have unquestionably fueled a greater need for organizational diversity training.
Globalization and Increased Competition in International Markets
Diversity in the workplace is a demographic phenomenon affecting not only U.S. organizations, but also multinational companies and institutions in countries across the globe (Littlefield, 1995). Additional business forces, such as global competition, are driving diversity in the majority of large organizations despite their geographic location. Companies are increasingly conducting business in the global arena and not providing the appropriate diversity training programs can be a very costly mistake.
Shifting Demographic Trends
Society in general is changing significantly and recent shifts in demographic trends have the potential to affect several facets of organizational management. In the USA, the workforce is increasingly comprised of men and women from all races, ethnic backgrounds, ages, lifestyles, sexual orientations, and religious beliefs. The surge of immigration in recent years has also contributed to a more culturally diverse workplace environment, a trend that is likely to continue (Keeton, 2003).
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Diversity Training--Both Sides of the Coin
A significant number of U.S. organizations have yet to implement effective diversity training programs for their employees. While many benefits are associated with these programs, considerable skepticism still exists about whether diversity training really helps to lessen cultural tensions in the workplace or if it just serves to aggravate them (Hemphill & Haines, 1997). When diversity training is not implemented correctly, employees may find it to be too basic and patronizing, and could ultimately resent the insinuation that they need to be trained on how to interact with other employees.
Many individuals are also of the opinion that highlighting diversity within an organization tends to result in more harm than good. The primary goal of diversity training is to eliminate stereotypes in the workplace. However, there is a risk that emphasizing different cultural perspectives may result in new, more insidious stereotypes than had previously existed prior to diversity training.
Additionally, Lynch (1997) describes the ever-growing industry of diversity training consultants and literature as the "diversity machine", and suggests that there is an over-reliance on the use of pop sociology and poor-quality, pseudo-therapeutic techniques. Increased demand and a lack of proper regulation, coupled with the fact that there are no specific qualifications or standards required for trainers or their materials, has only exasperated the problem in many areas (Lubove, 1997). In 1995, a renowned case of diversity training gone wrong occurred at the Federal Aviation Administration. As part of one training exercise, male employees were required to undergo verbal and physical harassment by female employees. Participants immediately filed formal complaints, and investigations ensued into both the training methods and the practice of hiring external training consultants (Day, 1995).
The cost of diversity training is another significant deterrent to many organizations that are unable to justify such colossal spending without solid evidence of the business results and return on investment. An initial "culture audit" can cost anywhere from $30,000 to $100,000 (Von Bergen, Soper, & Foster, 2002). Ultimately, any diversity program is destined for failure without the support and validation of corporate management, who need to be involved at all stages to ascertain commitment and buy-in among all employees.
Fortunately, if managed properly, the implementation of diversity training initiatives can result in a win-win situation for organizations and workers alike. According to McLaughlin and Clemons (2004), diversity training is the missing link in the provision of a successful, well-rounded equal employment training program and most employers fail to recognize a real need for this form of training until it is too late.
Several well-known organizations have experienced huge success and excellent results from the implementation of corporate diversity training initiatives. Nextel Communications is a stellar example, having achieved a return on investment (ROI) of 163% following the execution and measurement of its enterprise-wide, diversity training programs (Managing Training & Development, 2003).
. The luxury goods retailer, Saks Fifth Avenue, has also reaped the benefits of successful diversity training programs. While the company will not reveal exact figures, it is estimated that these initiatives have helped to increase annual sales by over $1 million. Prior to training, Saks employees had been ignoring customers that did not fit the typical mould of the optimal Saks customer based on such factors as appearance and race. Disregarding these occasional shoppers was having a serious effect on the company's bottom line, hence the establishment of diversity training and other programs to help curb this trend (Cleaver, 2003).
Advantica, the parent company of the Denny's restaurant chain, has also experienced significant ROI from its diversity management initiatives with sales soaring to a record $2.23 billion. Furthermore, Advantica was named as the "Best Company in America for Minorities" by Fortune magazine over two consecutive years, confirming yet again that organizations can significantly benefit by shifting management focus to diversity (Brathwaite, 2002).
These are just a handful of examples that represent a continuing trend of success for diversity training initiatives, as more organizations realize the true ROI of such programs. Additional companies that have experienced immense success as a direct result of diversity training implementation include PepsiCo, Pitney Bowes, J.P. Morgan Chase, Procter and Gamble, and Allstate Insurance, (American Banker, 2004).
Needs Assessment and Evaluation
In order for diversity training programs to be successful, organizations must conduct a thorough needs assessment study before implementing any new measures. Prior to training, companies must clarify why diversity training is necessary, as many organizations simply implement mandatory training programs as a result of negative pressures, for example, discrimination lawsuits (Ford, 2004). Companies should also define diversity as it pertains to their work environment and employees as well as specific goals and objectives. In tailoring training programs to meet the particular needs and requirements of their own employees, companies will experience significantly improved results from training that is ultimately better received and more effective.
Evaluation of training in diversity practices is equally important, as success and ROI cannot be determined without some control of measurement. Defining the effectiveness of diversity training can be quite challenging, and so companies need to take methodical steps to guarantee the consistent execution of the ROI evaluation process (HR Focus, 2003).
The Future of Diversity Training
Although diversity training experienced a slight decline during the latest recession, it undoubtedly has recaptured momentum. Experts predict that organizational diversity training programs will grow by a further 10% in 2005, with this growth rate to increase in 2006 (Hyter, 2004). Escalating globalization in recent years is causing the 21st century workplace, where ethnic, cultural, and religious diversity are the norm, to change at an exponential pace. Continued education on all forms of diversity within and outside the company, remains the key to employee growth and success on both a personal and professional level (Katz, 2003). Organizations that want to remain successful in an increasingly competitive environment should recognize that diversity has become an unavoidable social fact and therefore, determine how to take advantage of its benefits while minimizing any potential negative effects (Kwak, 2003).
When successfully implemented, we can conclude that diversity training leads to enhanced working relationships among employees, reduced costs, and increased productivity. The relentless pressure to increase revenues and profits is omnipresent. With measurable ROI, workplace diversity training represents a verifiable, predictable method for boosting profit and contributing to a company's bottom line.
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