Diversity: Not just good,
but good business.
By Eli Amdur
[Special to North Jersey Media Group, April 15, 2007]
It’s been decades –
six, in fact – since a chief executive took a formal step to bring diversity to
his organization.
In 1948, fully 16
years before the historic Civil Rights Act of 1964, President Harry Truman,
with a decision many historians consider more courageous and significant than
that to use the atomic bomb to end World War II, desegregated the armed forces
of the United States.
On July 31, 1948, the Chicago Defender, one of the
most prominent black owned and edited newspapers of that time in America,
published the headline "President Truman Wipes Out Segregation in Armed
Forces." Executive Order No. 9981 issued by President Truman provided for
"equality of treatment and opportunity in the armed forces without regard
to race, color, religion, or national origin."
Although history views
this event more as a civil rights action than a diversity initiative, it serves
very well as a business model for organizations today. Truman (interestingly,
the last American president without a college degree) knew he was doing the
right thing not only for African-American soldiers, but for the military as
well. It was good business, as it were: fairness for the individual and
strength for the organization. The two became fatefully and inextricably linked
by Harry Truman’s pen.
Today, diversity in
the workplace has actually expanded in scope to include gender, age, GLBT
persons (that’s gay, lesbian, bisexual, and transgender for those not yet
familiar with this designation), and people with disabilities.
Aside from its solid
moral foundation, does diversity make good business sense? As it did to Truman,
it does today. DiversityInc Magazine has just released its 2007 Top 50
Companies for Diversity Index™, and makes the following observation. “Examined
over a 10-year period, The 2007 DiversityInc Top 50 Companies for Diversity
Index™ outperformed the Nasdaq and the Dow Jones Industrial Average by 48
percent and the Standard & Poor's 500 by 23.4 percent. Results for one-,
three- and five-year performance were competitive as well.”
Professor Cedric
Herring of the Department of Sociology at the University
of Illinois at Chicago
has reached the same conclusion. An article from the Washington Post News
Service cites a study by Professor Herring indicating that diversity does,
indeed, make a difference.
Herring found that
companies with a higher degree of diversity also have “more customers, a larger
share of their markets, and greater profitability.” In graphing his results,
Herring found a linear relationship between diversity and business success,
predictably similar to the performance analysis by DiversityInc.
Herring’s study
encompassed data about diversity levels and business performance from
approximately 250 companies, and verified this data with independent,
third-party statistics as well as documents filed with the federal government.
While DiversityInc’s list includes companies with 1,000 or more employees,
Professor Herring’s sample included companies with as little as ten. He found
the same correlation between diversity and business success irrespective of the
size of the company.
Herring cautions us that
this “does not prove that companies do better because they are diverse.” The
study does not link cause and effect, but does indeed show a correlation
between diversity and business success. “The data I was using,” explained
Herring in a recent phone interview, “would not let me tell which [diversity or
business success] came first. It isn’t possible to disentangle them.” In other
words, while diversity could be the cause of better business outcomes,
according to Herring, “it is also possible, for example, that companies that
are successful to begin with do a better job of attracting and retaining
minorities.”
Note: attracting and
retaining. In their sweeping survey, DiversityInc, also looks at recruitment
and retention. In the global war for talent, intensifying as the 21st century
moves forward, smart companies are finding ways not only to recruit talent, but
to keep it. And that talent is increasingly diverse, as DiversityInc describes:
“people of color, women, GLBT people and people with disabilities.” Add to that
the factor of age, as the older worker becomes more of a factor in the overall
workplace each year.
A key point derived
from DiversityInc’s focus on recruitment and retention, especially in analyzing
their top 10 companies in this area, is that “the top ten all demonstrate
almost equal retention of the entire work force and management, regardless of
race, ethnicity and gender.” Further, it was found that “twenty-seven percent
of these firms’ management are people of color, compared with 12 percent people
of color in management nationwide (Bureau of Labor Statistics).”
Even more
specifically, 90 percent of the top 10 for recruitment and retention have a
resource group for GLBT employees, and 70 percent of these companies’
nondiscrimination policies include gender identity, compared with 24 percent of
the Fortune 500 companies.
A quick (albeit
unscientific) analysis of the DiversityInc leads to an interesting observation,
namely an apparent correlation between industries that have shown consistent
job growth and their representation on the list.
For example, the
healthcare industry, which has added jobs to the economy every month for the
last 14-plus years, has eight companies on DiversityInc’s list. The financial
services industry, despite its employment ups and downs related to outsourcing,
has still created jobs consistently, and has 11 companies on the list. Other job
growth areas which are also prominent on the list (with number of entries) are
food and food services (6), technology (5), professional services (3),
communication and broadcasting (3), and hospitality and leisure (3).
How were companies
selected for the DiversityInc list or for Professor Herring’s study? Companies
compete to appear on the list, earning their spots based on their responses to
more than 200 detailed questions on human capital, CEO commitment, corporate
communications and supplier diversity, as described on the DiversityInc web
site. This year, questions were added on work/life, mentoring, Native
Americans, people with disabilities, and GLBT people. This coming year, any
company that fails to offer domestic-partner benefits to same-sex partners is
automatically excluded.
In the case of the
Herring study, a scientifically chosen sample of 250 companies, nationally
representative of all US
business with 10 or more employees, was used. Professor Herring’s study has
been hailed as one of the five best citations on this subject.
Globally, diversity
matters, perhaps with even greater ramifications. Richard Florida, Hirst
Professor at George Mason
University’s School
of Public Policy, has authored two
landmark books, The Rise of the Creative Class (2002) and The Flight
of the Creative Class (2005). In discussing the global competition for
talent, Florida focuses on the
role of creativity as an economic engine, and – simply – the most powerful
magnet for talent. It is what made America
the dominant world power in trade, science, arts, entertainment, invention, and
so on for 200 years.
Florida’s
exhaustive research led him to the conclusion that creativity – and
subsequently economic development – depends on three Ts: technology, talent,
and tolerance. The first two require no comment here, but the third – tolerance
– is germane. It was always because of America’s
tolerance to new and different people, ideas, thoughts, and ways of doing
things that we attracted the Albert Einsteins of the world, and – historically,
Irving Berlin, the families of Cyrus McCormick and Andrew Carnegie, and – of
recent day – Sergei Brin, one of the two founders of Google.
Florida’s second book
documents America’s gradual loss of members of the creative class to new
creative centers in the world such as Finland, Ireland, The Netherlands,
Israel, Australia, New Zealand, and Canada. All these countries are opening
their doors and actively recruiting the creative class, while America
– especially in the last six years – is making it harder and less attractive
for the next generation of creative leaders to come here.
“Where America
was once the first destination for foreign students and the last stop for
scientists, engineers, musicians, and entrepreneurs wishing to engage in the
most robust and creative economy on the planet,” according to Florida,
“it has now become only one place among many where cutting-edge innovation
occurs. The resulting global business trends are evident.”
Domestically, Florida’s
research turned up a startling phenomenon. In the creative centers within the
US – Silicon Valley, Austin (TX), Seattle, New York, Boston, Washington, DC, to
name a few – there also happen to be significant gay populations. Not that you
have to be gay to be creative or visa versa, but the tolerance factor just
keeps showing up and persistently yields no ground in logical assessments of
the relationship between diversity and business advantage.
This all
adds up to the unassailable position that diversity matters – personally,
organizationally, and globally. Whether diversity is the cause or the effect of
business success – the proverbial chicken or the egg – cannot, as Professor
Herring says, be determined by these studies or surveys. But, in correlating
diversity and business performance, as you continue to remove one variable
after another – industry, sector, size of company, longevity, and others – the
correlation remains.
And so does the
conclusion that diversity is not just good, it’s good business.
The healthcare field – a look back is a look ahead
By Eli Amdur
[Special to North Jersey Media Group, September 16, 2007]
In discussing the
field of healthcare, there is hardly a more applicable saying than “The more
things change, the more they stay the same.”
For the seventh time
in the last three and a half years, we take a close look here at the most
dominant field in the American economy and workplace – and in the very lives of
Americans: healthcare. For the seventh time, we look at the continuation of
sweeping trends and the endless parade of dynamic changes and startling
innovations that characterize this field like no other. For the seventh time,
we see validation of what has been discussed here all along, namely four
indisputable conclusions:
First, healthcare
forcefully dictates not only how we Americans live, but how we make our livings
and how we spend our money.
Second, the healthcare
field offers almost immeasurable career opportunities, both in pure numbers and
in alternatives and options, certainly as much as – and probably more than –
any other field.
Third, as large and
dominant as it is, the healthcare field is growing. It has added jobs to the
American economy every month for the last 15 years, with no end in sight. In New
Jersey, healthcare will create one of every five new
jobs in the next five years; nationally healthcare will create 3.8 million jobs
by 2014. Further, Americans’ healthcare expenditures are growing at a rate
two-and-a-half times that of our overall economy.
And fourth, healthcare
is a constantly changing picture, which means, simply, that each day brings new
and different opportunities that did not exist the day before.
To understand what’s
driving these trends, let’s first look at some raw numbers from the
Bureau of Labor Statistics.
One in nine Americans
works in healthcare and social assistance, and that number – 16 million (as of
August 2007, 10.9 percent of the workforce of 153 million) – is on the rise.
Less than three years ago that number was only 10 percent. Interestingly,
healthcare facilities account for only eight percent of all establishments
(which includes individual practitioners’ offices, small clinics, and so forth
all the way to the largest medical centers, public health, and scientific
organizations). In other words, one out of twelve American workplace venues
employs one out of nine workers. That’s a strong statement.
Employment in
healthcare and social assistance has been projected to increase 30.3 percent in
the 10 year period between 2004 and 2014, the highest rate of growth of all
sectors. Now almost four years into that period, the numbers are right on
track.
But the total number
doesn’t come close to telling the whole story. Mean income is approximately
four percent higher in healthcare than in other sectors, the same difference
that existed in 2006. Healthcare’s position is holding steady.
To many experts, the
most compelling statement to be made about the healthcare field is that the
unemployment rate, which for the overall economy is 4.6 percent (August 2007),
is a stunning 3.0 percent in healthcare and social assistance. This, too, has
not changed in years.
A more detailed look
at the employment picture within healthcare and social assistance shows that
the growth opportunities are literally all over this sector. A key indicator of
employment opportunity is where the fastest growing occupations are. The Bureau
of Labor Statistics’ Occupational Outlook Handbook gives us the following
breakdown.
For workers with their
first professional degree, healthcare has all five of the fastest growing
occupations by percentage and four of the top five by numerical growth. What
are they? Pharmacists, physicians and surgeons, chiropractors, optometrists,
and veterinarians (let’s not forget the healthcare needs of our furry friends).
For workers with their
doctoral degree, three of the top five fastest growing occupations (both by
percentage and raw numbers): medical scientists; biochemists and biophysicists;
and clinical, counseling, and school psychologists.
Masters degree holders
in healthcare will find four of five and two of five (percent and numerical) of
the fastest growing occupations, among them, physical therapists, occupational
therapists, hydrologists, substance abuse and behavioral disorder counselors,
and rehabilitation counselors.
For those who hold
bachelors degrees, it’s two of the top five: physician assistants and medical
and health services managers.
For those who have
attained associates degrees, the outlook is very strong: four of the top five
by percentage and three numerically. Those jobs include physical therapist
assistants, registered nurses, dental hygienists, veterinary technologists and
technicians, diagnostic medical sonographers, and medical records and health
information technicians.
For postsecondary
vocational award candidates, three of the fastest growing occupations by
percentage and two numerically are within grasp: nursing aides, orderlies, and
attendants; surgical technologists; emergency medical technicians and
paramedics; licensed practical and licensed vocational nurses; and fitness
trainers and aerobics instructors.
Other occupations
within healthcare that show fast and steady growth are medical assistants,
dental assistants, social and human service assistants, home health aides,
personal and home care aides, and occupational therapist aides.
A window into these
vast numbers reveals that, for example, the number of registered nurses will
have jumped from 2.394 million in 2004 to 3.096 million in 2014, a 29.4 percent
rise. That growth rate, for an occupation that already employs so many people,
is astounding. Yet there is a national nursing shortage and that is projected
to persist.
We will see a 56.0
percent growth rate in the number of home health aides, from 624,000 to
974,000; an increase of 22.3 percent in the number of nursing aides, orderlies,
and attendants, from 1.455 million in 2004 to 1.781 million in 2014; and a jump
from 701,000 personal and home care aides to just under one million, a 41
percent rate of growth.
Across the board the
opportunities are there, not just now, but the foreseeable future. No other
employment sector can approach these prospects.
Trends that
drive this growth have been well documented, both here and in many other
places. Most evident is the growth and aging of our population. We now live
among 301 million Americans, but who are they?
By 2010, one million
Americans will be 100 years old or over, while our over-65 population, 35
million (12.4 percent) in 2000, will grow to 40 million (13.2 percent) by 2010.
By 2050, when young Americans who are just now entering the workforce will
still be working, the 65-and-up population will balloon to 82 million, slightly
more than one out of every five of our 400 million Americans. As a result, not
only will there be a dramatic rise in the healthcare needs of Americans, there
will be a fundamental shift – a markedly different dynamic – in the demands on
acute care, chronic care, and long term care. Anyone engaged in career planning
can read between these lines.
Just how big is
healthcare? Last year, Americans spent $2.2 trillion, one out of every six
dollars on healthcare, more than the gross domestic product of all by six
countries on earth, more than we spent on food and national defense combined,
or housing and transportation combined. By 2014 we will spend an unfathomable
$4.2 trillion on healthcare. Clearly this is what is fueling the job growth in
healthcare.
So that we do not
limit ourselves to parochial thinking, job growth in the healthcare field is
not to be found just in those clinical jobs listed above. This field is
spurring opportunities in virtually every non-medical occupation: information
technology, public relations, operations, logistics, plant maintenance,
fundraising, marketing, strategic planning, project management, and human
resources, to name the more obvious ones.
In this space three
years ago, Dr. Donald Zimmerman, now Associate Professor of Pharmaceutical
Business at the University of the Sciences in Philadelphia, was quoted as
saying, “While many think of the healthcare industry as one that is changing,
in fact, it already has changed, and is now in transformation.”
That brings us back to
the opening point of this report. With all the dynamic changes in healthcare –
new technologies, new sciences, new occupations, new modalities of care, new
delivery methods, new decision making processes, new perspectives on preserving
wellness instead of fighting sickness, new complementary and alternative
treatments, new shifts in access to knowledge from the physician to the
patient, and so on – the one thing that hasn’t changed in the healthcare field
is growth opportunity.
As we look back over
the seven times in this column in which we have examined the healthcare
business, we see that the predictions and projections made by a wide array of
experts have not only all turned out to be right on target, but they also point
to a strong, unending current of more of the same – the four conclusions set
forth earlier. One, healthcare is a dominant force in our lives; two, it offers
huge career opportunities; three, it is a growing field; and four, it is a
changing field.
In healthcare
and social assistance, a look back is a look ahead.
