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

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

2. 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, workplacediversityis 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 inthe workplace.

3. 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 2007.Other research conducted by SHRM has revealed that the downturn resulted in across-the-board cuts to many HR initiatives and practices.[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 www.shrm.org/surveys. Society for Human Resource Management. (2010, October). The Post-Recession Workplace Competitive Strategies for Recovery and Beyond. Alexandria, VA: SHRM.

4. 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 2005. 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 2010. 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 2005.

5. 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 2010. • 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 2010. 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 2005.

6. Does your organization have in place any practices that address workplace diversity? Note: “Not sure” responses were excluded from this analysis.

7. Does your organization have in place any practices that address workplace diversity? Comparison of the 2010 results by Organization Staff Size, Organization Sector and Operations Location • 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.

8. Please indicate which of the following diversity practices your organization participates in 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.

9. How important are the following outcomes of diversity practices to your organization? 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.

10. How important are the following outcomes of diversity practices to your organization? Note: Table represents "very important" responses.

11. Does your organization provide any training on diversity issues?

12. Does your organization provide any training on diversity issues? Comparison of the 2010 results by Organization Staff Size and Organization Sector • 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.

13. 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 Note: Excludes respondents who indicated that that their organizations did not provide diversity training. Percentages may not total 100% due to rounding.

14. 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 Comparison of the 2010 results by Organization Sector and Operations Location • 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.

15. 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 Note: Excludes respondents who indicated that that their organizations did not provide diversity training. Percentages may not total 100% due to rounding.

16. 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 Comparison of the 2010 results by Organization Sector • 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 .

17. Please indicate whether nonmanagerial-level employeeshave the opportunity to receive diversity training and whether the training is voluntary or mandatory Note: Excludes respondents who indicated that that their organizations did not provide diversity training. Percentages may not total 100% due to rounding.

18. Does your organization have a method for measuring the impact of its diversity practices? Note: “Not sure” responses were excluded from this analysis.

19. Does your organization have a method for measuring the impact of its diversity practices? Comparison of the 2010 results by Organization Staff Size, Organization Sector and Operations Location • 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 theirdiversity 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.

20. Which of the following does your organization use to measure the impact of its diversity practices? 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.

21. Does your organization conduct analysis to determine the return on investment (ROI) for its diversity practices? Note: “Not sure” responses were excluded from this analysis.

22. Does your organization conduct analysis to determine its return on investment (ROI) for diversity practices? Comparison of the 2010 results by Organization Staff Size and Operations Location • 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.

23. Overall, how effective do you believe your organization’s diversity practices are in achieving your organization’s desired outcomes? Note: “Not sure” responses were excluded from this analysis. Percentages do not total 100% due to rounding.

24. Please indicate how well you believe the following statements describe your organization Note: Percentages may not total 100% due to rounding. The figure is sorted by “describes very well” responses.

25. Please indicate how well you believe the following statements describe your organization Note: Note: Table represents " describes very well” responses.

26. Please indicate which of the following areas of diversity your organization’s diversity practices cover Note: Percentages do not total 100% due to multiple response options. A dash (--) indicates that this particular area was not asked in 2005.

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

28. 2010 Organizational Demographics

29. Demographics: Organization Industry Note: n = 389. Percentages do not total 100% due to rounding.

30. Demographics: Organization Industry (continued) Note: n = 389. Percentages do not total 100% due to rounding.

31. Demographics: Organization Sector Note: n = 388. Percentages do not total 100% due to rounding.

32. Demographics: Organization Staff Size Note: n = 365. Percentages do not total 100% due to rounding.

33. Demographics: Region Note: n = 373

34. Demographics: Other • Does the organization have U.S.-based • operations (business units) only or • does it operate multinationally? • Is the organization a single-unit company or a multi-unit company? Note: n = 363 Note: n = 391 • 25% of organizations indicated that employees at their work location were unionized. • Are HR policies and practices determined by the multi-unit corporate headquarters, by each work location or both? Note: n = 387 Note: n = 254

35. SHRM Poll: Workplace Diversity Practices Methodology • 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, 2010 For more poll findings, visit: www.shrm.org/surveys Follow us on Twitter: http://twitter.com/SHRM_Research