Diversity's business case doesn't add up

Workforce, April, 2003 by Fay Hansen

PricewaterhouseCoopers. The world's largest accounting firm, with headquarters in New York City and 125,000 employees, sees diversity as a marketing imperative. "We find that more and more of our clients are demanding that our partners and staff--involved in securing new business as well as delivering the work--reflect the diversity within their organizations," says Toni Riccardi, chief diversity officer. "It is as much a part of the price of admission for winning and sustaining new business as other core differentiating factors. We measure our return on investment against very specific metrics focused on recruiting, retention of our top performers, and employee satisfaction."

New York Life Insurance. New York Life, the largest mutual life insurance company in the United States, runs an extensive diversity program focused on recruitment and retention of minority candidates. "The human resources department establishes annual diversity goals in each department and, with the help of diversity officers in each unit, monitors a department's hiring and promotional activity," says Angela Coleman, vice president of human resources. An executive management committee tracks diversity objectives by reviewing monthly and quarterly reports for each unit. Diversity is one of 15 components in performance evaluations for managers. "It's hard to quantify financial results," Coleman says. "We don't approach diversity in terms of a dollar return on investment."

Cendant Corporation. Cendant, a vast real estate services company, launched its diversity program as part of a broader "employer of choice" initiative. The company appointed a diversity committee commissioned by the CEO, and then named a vice president for diversity in 2002. "Each of our business units has at least one representative who is responsible for diversity initiatives," says Kathy Andreasen, vice president of human resources for the New York City-based company. "The return on the resources dedicated to this effort is measured in number of hires, the volume of our services that are provided by minority suppliers, the volume of business generated by our multicultural marketing initiatives, the number of minority franchisees, and other measures.

Fay Hansen is a business and finance writer based in Cresskill, New Jersey E-mail editors@workforce.com to comment.