Mr. Ferrara

Human Resources, Recruitment & Training

Hotel Recruitment: How diverse is diverse enough?

By Jason Ferrara, Vice President, Corporate Marketing, CareerBuilder

Long dominated by white males, the nation's work force is now nearly 48 percent female, 14 percent black, 11 percent Hispanic and 5 percent Asian/Pacific Islander, according to the U.S. Equal Employment Opportunity Commission. The Bureau of Labor Statistics predicts that by 2008, women and minorities will make up 70 percent of all new entrants to the workforce.

But equal representation in the workplace doesn't necessarily mean equal clout. Hispanics are now the largest U.S. minority group, but they're also the most underrepresented in executive suites. According to an article published last July in the Dallas Morning News, Hispanics hold less than 3 percent of all Fortune 500 board seats.

These statistics highlight the important role that workplace diversity will play as Corporate America evolves to keep pace with a changing U.S. population. To remain competitive, businesses need to embrace diversity as a strategic initiative, tying diversity to corporate profits.

Diversity defined

Workplace diversity is hardly a new notion. The push for diversity gained prominence in the 1970s and 1980s as an influx of women entered the workforce. When EEOC reporting requirements emerged in the 1990s, the concept took on even greater importance.

Today, embracing diversity means far more than creating more and equal opportunities for black and Hispanic workers. Diversity initiatives also benefit Asians, Native Americans, women, people with disabilities, and gay and lesbian workers.

For employers, diversity isn't about fulfilling a legal quota - it's a crucial way to maintain a competitive advantage. Diversity is all about finding and nurturing the right diverse talent and creating a culture of equality.

Still, diversity programs mean different things to different organizations. Some businesses engage in small, local efforts; others engage in company-wide strategic initiatives led by a chief diversity officer. The most successful modern-day workplace diversity programs fully integrate into every part of the company culture.

How diversity benefits your organization

More than 54 percent of hiring managers polled by CareerBuilder.com last August said workplace diversity increases a company's success. Diversity improves relationships with customers, reduces employee turnover, and positively impacts the company culture.

Embracing diversity also has a strong positive impact on a company's bottom line. By creating workplaces that mirror their customer base, businesses can tap into the enormous buying power of women and minorities.

By 2010, the combined buying power of Asians, blacks and Native Americans will be $1.7 trillion, or 14.1 percent of the nation's total buying power, according to predictions by the Selig Center for Economic Growth.

Hispanics' buying power is also expected to surge. Hispanics' economic clout will be nearly $1.1 trillion in 2010 - a 413 percent increase over 1990. Black buying power will reach $1 trillion by 2010, a 222 percent increase over 21 years. In the same time frame, white buying power will rise just 164 percent, according to the Selig Center.

Studies have also shown that women wield enormous buying power and have a considerable impact on a company's profits. Par Excellence states that women purchase 80 percent of consumer goods, sign 80 percent of checks in the United States and head up 40 percent of households with assets more than $600,000.

Companies with the best representation of women in upper management have better financial performance than those with the lowest representation - a 35 percent higher return on equity and a 34 percent higher total return to shareholders, according to a Catalyst study of more than 350 Fortune 500 companies.

The costs of neglecting diversity

Not implementing workplace initiatives can have consequences that reach far beyond lost market share. Mismanaging diversity can result in expensive lawsuits, increased turnover and absenteeism, lower productivity and a poor company reputation.

Discriminatory hiring practices can cost a company millions. In 2000, nine former bellmen filed a discrimination claim against a prominent West Hollywood hotel. The bellmen - eight minorities and one white - claimed they were all fired and replaced by "cool-looking" white employees when the hotel reopened after a major renovation. The hotel settled the suit for more than $1 million.

Employers must also be sure their workplaces are diversity-friendly every day. Shortly after the events of September 11, 2001, a major hotel chain paid more than $525,000 to settle a lawsuit claiming Muslim, Arab and South Asian employees had been discriminated against on the job based on their religion and/or national origin.

Even if they escape lawsuits, businesses without diversity-oriented policies in place risk higher turnover and absenteeism. Thirty percent of diverse hospitality workers say they plan to leave their jobs in the next year, according to CareerBuilder.com's "Diversity Hiring in Hospitality 2005" survey. Forty-four percent of diverse workers say they have called in sick when feeling well at least once in the last 12 months.

Attracting diverse talent

Finding the right diverse workers is no easy feat, however. Thirty-two percent of diverse hospitality workers told CareerBuilder.com that they don't market themselves as diverse candidates.

To reach diverse audiences for open positions, companies should start by visiting the publications and sites diverse candidates are most likely to read and visit. For example, BET.com is the leading Internet portal for blacks, and Univision.com is the leading portal for Hispanics. Companies should also participate in conferences and career fairs that represent minority interests.

MGM Grand built a diverse workplace by looking to nontraditional sources. The company has a new purchasing council that meets monthly to find minority-owned vendors. The chain is also working to boost minorities in its intern program.

Employers can best attract diverse candidates with the right combination of pay, benefits and work environment, according to the CareerBuilder.com survey. Thirty-percent of diverse workers in hospitality say a competitive salary is the best way for companies to entice diverse candidates. An additional 24 percent say they are primarily interested in the stability and profitability of the organization.

The Hilton hotel chain says 61 percent of its new hires are minorities, and it has implemented diversity efforts to ensure these minorities climb the company ladder. To help achieve this, forty-four percent of managers have compensation plans tied to diversity.

Starwood Hotels and Resorts depends on a positive work environment to attract and retain its diverse talent. The chain solicits anonymous comments on diversity issues via its intranet and relays them to management. The company also has an Office of Diversity and Inclusion that counsels management on diversity. Its efforts have paid off: 50 percent of its new hires and 32 percent of its management are nonwhites.

Jason Ferrara leads the development of strategic marketing for the Corporate Marketing team at CareerBuilder.com, the nation's largest online job site with over 22 million unique visitors each month and over 1.5 million jobs. Focused on the recruitment needs of employers, Ferrara is responsible for business-to-business strategy including communications, advertising, promotions, e-commerce management, customer lifecycle and loyalty, and sales support. Prior to joining the company, Ferrara worked as Director, Online Marketing for SPSS, Inc. He holds a MBA from Kellogg School of Management. Mr. Ferrara can be contacted at 773-353-2601 or jason.ferrara@careerbuilder.com Extended Bio...

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