Communicating The Company's Diversity Message

Monday, November 1, 2004 - 01:00

The confluence of changing national demographics, pervasive and rapidly advancing technology, and globalization is transforming business worldwide. In today's high-tech environment, global and domestic consumer markets are now accessible through the Internet, satellite TV, and wireless communication devices - resulting in marketplace changes that cannot be ignored. Companies, particularly consumer market driven companies, are aggressively adopting broader, more diverse marketing strategies that enhance their brand identities with underserved or untapped markets - markets composed primarily of women and minorities.

Women and minorities represent a considerable economic force in this country. Women comprise 50.9% of the U.S. population and control $14 trillion in wealth.1 The minority population accounts for 24.9% of the total U.S. population and is projected to increase by 169% by the year 2050, compared with an increase of 50% for the total U.S. population.2 By 2045, minority purchasing power may reach $4.3 trillion, or as high as $6.1 trillion if income disparities between minorities and non-minorities are eliminated.3 These facts should not be ignored. Companies are shaping their workforces, their product lines, and other critical components of their core business strategies to focus on women and minorities and the multi-cultural markets they represent.

The task of successfully penetrating and navigating these diverse American markets, as well as the diverse global market, comprised of consumers with unique cultures and preferences, is at best challenging. However, companies that develop culturally competent messages that unequivocally express their commitment to diversity will: (1) increase sales and market share; (2) attract and retain the most talented employees of all backgrounds; and (3) minimize exposure to diversity crises. The question, therefore, is not whether a corporation should develop a diversity message, but rather how such a message should be crafted and disseminated in the most positive and effective manner.

Importance Of Diversity In Communications

A brilliant message alone is not sufficient; a company is successful only if its message leads to the desired response ( e.g., increased sales, positive image, brand awareness, improved employee perceptions, etc.). To achieve that desired response, corporate leaders must be strategic and proactive in their thinking about the content of their diversity message, the means of delivering the message, and the audiences to whom it is addressed. This is especially true today, since a cogent diversity communications strategy can play a pivotal role in establishing a favorable diversity image.

A. Tapping Into Underserved Or Unserved Markets

As the U.S. consumer market becomes more diverse, advertising, products, and media must be increasingly tailored to each market segment. The 2000 U.S. Census confirms that Hispanic, African-American, Asian Pacific American, and Native American markets are growing faster than the general population in both numbers and purchasing power. Yet, multicultural markets are typically underserved or unserved. The following statistics tell a compelling story:4

  • In 2003, African-American households had $687.7 billion in buying power. By 2008, the buying power of African-Americans is expected to increase to $921.3 billion.

  • Hispanics are now the largest minority in the country, with a population of over 38 million. The buying power of Hispanics rose to $653 billion in 2003, and Hispanic spending will grow more than 9% a year on average through 2020.

  • Asian Pacific American households make more money than any other ethnic group and are overrepresented in the top income brackets. Asian Pacific Americans also have the highest education of all U.S. racial groups - including whites - with a college graduation rate of 51% for men and 44% for women.

  • Although comprising less than one percent of the country's population in 2002, Native Americans controlled almost $41 billion in disposable income.5 The 1990-2008 projected percentage gain in Native American buying power (227%) is much greater than the projected increases in buying power for whites (128%), the U.S. population (148%) and for African-Americans (189%).

  • Women purchase 83% of all products and services, and account for 88% of all retail customers in the United States, with control over $3.7 trillion in consumer spending.

The fact that many Fortune 500 corporations routinely ignore these minority markets demonstrates that corporate behavior does not always operate on the basis of economic reality. Rather, corporate decisions are often based on stereotypes that lead to missed opportunities. Experts agree that businesses should approach minority constituencies the same as majority constituencies. Indeed, the basics of any marketing program - product design, development, distribution, advertising and market analysis - remain essentially the same. The key lever with respect to a communications strategy designed to access minority markets is to understand the target group and address communications to its specific needs, values, and beliefs.

B. Competing To Secure Top Talent

Attracting and retaining quality employees is vital to the success of every corporation. Many have proactively implemented a number of initiatives to increase the diversity of qualified candidates, as well as enhance their reputations as "Employers of Choice." To obtain the full benefits of those initiatives they must be effectively communicated both internally and externally. The first step toward developing a successful communications strategy to attract top-tier, multi-ethnic talent can be as simple as declaring an intention to seek a diverse workforce and then executing on that promise. Also, corporations should not be shy about publicizing their diversity initiatives and achievements, especially if they have been recognized by members of the diversity community or in diversity media (e.g., Fortune 50 Best, DiversityInc. Top 50, Working Mother 100 Best, NAACP Scorecard, etc.). An organization's public commitment to diversity and its diversity performance is important to women and minorities in selecting an employer. For example, in a 2002 survey, the National Society of Black Engineers reported that "an average of 80.5 percent of [black engineering students] rated diversity programs as very important or extremely important" in selecting an employer.6 Indeed, diversity programs was one of the six most important factors in selecting an employer.7 Furthermore, according to The New York Times Job Market Research in 2003, 76% of job seekers, both minority and non-minority, rated diversity in the workplace as very important or extremely important in selecting an employer, and 97% would rather work in a diverse environment, than not.8

C. Minimizing Exposure To Diversity Crises

Over the past several years, major corporations have been the target of high visibility race and sex discrimination claims, which have resulted not only in injury to their corporate image, but also in reduced market share. Once confronted by a diversity crisis, many companies typically fall into the trap of managing their diversity communications strategy in a reactive mode. This, more often than not, results in an ad hoc effort of "fixing problems" - an approach that is not only short-sighted, but also ultimately ineffective. Instead of operating in a reactive mode, companies should take proactive steps to disseminate their diversity message and commitment both internally and externally before any problems become evident. Internally, training and education of the workforce on diversity will help employees interact respectfully and effectively with one another. In addition, diversity training helps to raise awareness of biased behaviors and thereby minimizes unintentional discriminatory or harassing behavior.

Components Of A Comprehensive Diversity Communications And Media Outreach Strategy

Although the importance of a clearly articulated internal and external diversity message cannot be overstated, there is no single way to craft such a message. Each organization must approach the communication of its diversity commitment in a manner that is consistent with its unique culture and business objectives. Organizations often struggle with their diversity communications efforts and well-intentioned messages get lost or misinterpreted, which can lead to confusion and conflict.

A properly implemented and integrated diversity communications strategy - supported by the visible commitment of the CEO and senior management and a strong Corporate Policy Statement - should contain the following fundamental elements:

  • Clearly articulate the business case for diversity (endorsed by the CEO).

  • Train/educate the workforce on the diversity commitment and expectations.

  • Continuously communicate the corporate diversity commitment, performance, initiatives, and successes both internally and externally.

  • Publicize diversity awards and recognition.

  • Establish effective mechanisms to solicit and respond to feedback on the company's diversity efforts from its constituencies, including employees, customers, shareholders, community groups, etc.

  • Seek out and take advantage of opportunities to showcase the company's diversity commitment and successes through visible participation in public forums targeted to diverse constituencies, including sponsorships and speaking engagements.

  • Utilize minority advertising & public relations firms for targeted and culturally sensitive marketing.

  • Even when using majority firms, target promotions to diverse audiences, with copy, graphics, and media placement tailored to reach and interest underrepresented audiences, while avoiding tokenism.

  • Utilize delivery channels that reach diverse audiences (print media, radio, online, television, intranet, company newsletters, etc.).

Conclusion

Changing demographics have forced companies, especially consumer products companies, to acknowledge the increasing presence of women and minorities in the labor market and their buying power in the marketplace. To translate these changing demographics into increased market share and acquisition and retention of top talent, and reduce exposure to diversity crises, companies must build a strong diversity brand. Building a strong diversity brand requires a sustained and coordinated effort of targeted strategic diversity communications.

1 Diversity Best Practices, Women and Diversity Wow! Quick Facts 2004.
2 The United States Chamber of Commerce , U.S. MINORITY FACTS, http://www.accessamerica.org/access/statistics/fact_minority.htm
3 Id.
4 Diversity Best Practices, Women and Diversity, Wow! Quick Facts 2004.
5 Jeffrey M. Humphreys, "The Multicultural Economy 2002," Georgia Business and Economic Conditions, Selig Center for Economic Growth, Volume 62, Number 2, 2002.
6 Diversity in Engineering: Managing the Workforce of the Future (2002), National Academy of Engineering. 7 Id.
8 New York Times Job Market Research 2003.

Paul M. Thomas is a Partner in the Corporate Diversity Counseling and Employment and Benefits practice groups in the Washington, DC office of Holland & Knight LLP. Femi S. Richards is an Associate practicing in the areas of Corporate Diversity Counseling and Government Relations in the firm's Washington, DC office. They can be reached toll free at (888) 688-8500.

Please email the authors at paul.thomas@hklaw.com or femi.richards@hklaw.com with questions about this article.