News Column

Firms Embracing Diversity

Sept. 9, 2011

Richard Larsen, Deputy Managing Editor

Fifty million Hispanics account for 16 percent of America's population. The total minority population, of which Hispanics are the majority, comes to 36.3 percent. Such demographics, revealed by data from the 2010 census, show the shifting nature of the consumer marketplace, the national workforce and the communities in which people live. They also point out the increasingly diverse nation the United States is becoming.

For America's corporations, diversity has become the underpinnings of mission statements, internal policies, business strategies and community outreach. And with good reason. With the United States' demographic becoming more ethnically and racially diverse, and with more women entering the workforce, those corporations that embrace diversity gain a stronger foothold in the marketplace.

Consider, the purchasing power of Hispanics alone was put at $1 trillion in 2010 and estimated by HispanTelligence, the research arm of Hispanic Business Inc., to increase to $1.3 trillion by 2015. With purchasing power like this floating around, corporate buy-in to the concept of diversity at all levels of business seems a prudent step to take.

As Ernie Gutierrez, president and CEO of the HispanicBusiness 500 company Allied Industries Inc., said after his recent election as vice chairman of the California Hispanic Chambers of Commerce, diversity is a give-and-take proposition. "The time has come for Hispanic businesses to take full advantage of opportunities now available. In addition, it is time that both corporate America and government take the voice of the Hispanic community more seriously."

Each September since 2005, HispanicBusiness magazine has focused on singling out the efforts of the best companies and the best postgraduate schools in business, engineering, law and medicine on diversity as it relates to Hispanics—in short, taking a snapshot of the state of diversity in the U.S.

The methodology for determining which businesses and schools make the lists is complicated. Businesses are ranked by 32 variables that determine how each approaches the issue of diversity. Postgraduate schools are ranked on five variables.

To expand this snapshot of diversity into a more panoramic view, Hispanic- Business magazine adds a new section to the magazine, The Diversity Partnership to explore the efforts of companies, schools, and Hispanic organizations and associations to make diversity a reality. A companion content box on will track diversity efforts on a more frequent basis.

This Year's Leaders
AT&T tops the 2011 Best Companies for diversity directory. It has made the top 10 every year since 2007, ranking No. 1 twice (this year and 2008) and No. 2 twice (2010 and 2007).

Two other firms have been on the Best Companies for diversity directory for the past five years—Southern California Edison (SCE), which has placed in the top five each year and Bank of America, which reached No. 3 in 2009. Three companies -- Comerica Bank, Wal-Mart Stores Inc. and Marriott International Inc. -- have been on the list four of the last five years.

AT&T's policy on diversity is to "lead from the top and embed diversity and inclusion," Debbie Storey, senior vice president of talent development and chief diversity officer, told HispanicBusiness magazine. A fuller understanding of AT&T's diversity efforts can be found in an article on Page 24 of this issue.

Verizon Communications, No. 2 on the Best Companies directory, believes diversity and inclusion make good business sense, but it prefers to embrace diversity not merely as a strategy for competitive advantage, but because it is the right thing to do. A profile of Verizon's efforts appears on Page 28.

Pacific Gas and Electric ranked No. 3 on the directory, telling Hispanic- Business magazine that it is the need for good customer service that drives its diversity and inclusion initiatives. A closer look at PG&E's efforts can be found in the article by on Page 30.

Rounding out the top 10 Best Companies for diversity are, in descending order, SCE, Comerica Bank, Wal-Mart Stores Inc., Bank of America, McDonald's Corp. (No. 1 in 2010), Union Bank and Marriott International Inc. Short profiles on the companies that ranked from No. 4 to No. 10 can be viewed beginning on Page 32.

In terms of widening opportunities for minority-owned businesses, the top 10 companies on the Corporate Diversity directory spent $31.4 billion in 2010 with minority suppliers.

Breaking out the companies on the Corporate Diversity directory by sector shows that the list is dominated by energy, 10 companies; finance, 15 companies; and service, 20 companies. Automotive, manufacturing and retail firms had from three to six companies on the list. One company in the transportation sector made the list. None from the construction sector made it.

Going Forward
It has not always been easy to inculcate the idea of diversity into the corporate mind. Many viewed it as a "feel good" idea to promote but not actively pursue. A 2007 survey on diversity at businesses by the Society for Human Resource Management found that less than one-third (30 percent) of organizations had an official definition of diversity.

Of those that did, large companies, those with 500 or more employees, were apt to have an official definition of diversity (43 percent of total respondents with definitions). Of medium-sized companies (100 to 499 employees) only 16 percent had a definition and of small companies (1 to 99 employees) only 14 percent did.

The importance of diversity efforts in the workplace was underscored Aug. 18 when President Obama signed an executive order "to promote the federal workplace as a model of equal opportunity, diversity and inclusion." The order for development of a governmentwide Diversity and Inclusion Strategic Plan and a 120-day deadline from issuance of the government plan for the head of each executive department and agency to develop agency-specific diversity and inclusion strategic plans.

As more corporations, organizations and communities embrace the concept of diversity, it will be necessary to ask: Is diversity merely a way to look good in the consumer marketplace and to employees, or should there be a more all-encompassing understanding of the concept?

Beginning a dialogue among involved in diversity efforts will be the first step toward answering these questions. From these answers and the ensuing dialogue will come a robust definition of "diversity."

Source: (c) 2011. All rights reserved.

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