Prudential continues to gather the data and provide twice-yearly updates to CEO Art Ryan. The compensation of senior management is tied to the company's progress on diversity, which Ms. Conic says is closely integrated into the operations of each business unit.
A recent study by the National Urban League, for example, found that fewer than a third of American workers surveyed said they believe their companies have effective diversity programs; fully one-quarter of Hispanics in the survey said their employers could do better. And while sheer demographics are propelling a growing number of Hispanics into the workforce, progress remains slower at executive levels.
While Hispanics account for 11.4 percent of the U.S. labor force, they make up 9.4 percent of the total managerial-professional class, according to Census data. Hispanics in "managerial and professional specialty occupations" surged 74 percent to an estimated 4 million between 1992 and 2002, but Hispanic representation on corporate boards at Fortune 1000 companies rose just 8 percent from 1999 to 2004, according to a report by Microquest, a Novato, California, research firm that helps companies identify diversity candidates for top positions.
In addition, the number of Hispanics at the vice-president level or higher rose just 6 percent from 1999 to 2004, the report says. And about 80 percent of Fortune 1000 companies have no Hispanic board members, according to the most recent annual report by the Hispanic Association on Corporate Responsibility (HACR).
"Our position is that unless Hispanics are represented at the highest levels, true diversity really doesn't exist," says Alfonso Martinez, president and CEO of HACR. "The key decision-making process begins and percolates from the top of the company." In an effort to boost accountability, HACR this year is launching an index tracking the progress of Fortune 100 companies in including Hispanics among their leadership, suppliers, and community contributions.
Little specific research exists regarding the bottom-line financial benefits of diversity to companies, but a study published in 2004 by HACR found that from September 1997 to September 2002, 61 Fortune 1000 companies with Hispanic board members had financial returns of 17.5 percent, compared with 4.6 percent for the Dow Jones Industrial Average, and negative returns for the S&P 500 and Nasdaq. And a recent study of Fortune 500 companies by the University of Texas at Dallas School of Management found that racial diversity appeared to have positive financial impact for companies that used team structures, displayed aggressive growth strategies, and were operating in a fluid market.
But measuring diversity efforts has been difficult for a variety of reasons, including the fact that the origin of diversity programs as an affirmative action tool has often led companies to rely on traditional recruitment and retention metrics, says Michael Hyter, president of Boston-based consultant Novations/J. Howard & Associates. Gathering and tracking more detailed data over time, relating it to the company's financials, and filtering out extraneous factors is complicated and often considered prohibitively expensive.
In addition, "You have a challenge that people have different perceptions of what diversity is," says Ana Duarte-McCarthy, director of Global Workforce Diversity and College Relations for New York-based Citigroup Inc., which created an internal diversity index to track the company's own progress. Rather than set specific numerical targets, she says, the company monitors such factors as the diversity of candidate slates for key positions, rates of promotion and turnover, and employee satisfaction.
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