Diversity Management

Getting the Facts to Effectively Manage Multicultural Workforces in the 21st Century

Creating diverse workplaces is a growing priority for U.S. companies and government agencies. Increasingly, private and public organizations want their workforces to reflect the evolving racial, ethnic, socio-economic, and generational makeup of American society. And these organizations want their workforces to be able to excel in the emerging global market place, where successes often depend on their ability to cope with diverse cultures.

But how best to achieve and harness diversity remains an open question. Over the past several decades, a cottage industry of consulting firms specializing in diversity management has emerged with the intention of helping organizations think through and implement programs to diversify their workplaces. But while having noble intentions, most of those consulting firms have based their advice on widely held beliefs and suppositions about the effects of diversity rather than on facts, empirical evidence, and rigorous analysis.

RAND's Empirical Understanding of Diversity Management

RAND has taken a different approach. We have turned to facts and empirical evidence–data collection, interpretation, and analysis; literature reviews; panels of experts–to understand the elements of diversity and to craft advice for government and corporate America.

Our empirical research has found, for example, that merely adhering to industry best practices in diversity management may not enable organizations to achieve high levels of diversity. While such practices help boost raw diversity numbers by creating racially an ethnically mixed workforces, numbers alone are an inadequate measure of diversity. To reap the true benefits of diversity–enhanced productivity, profitability, and overall job satisfaction–organizations need to accept and integrate inclusive diversity programs into their social and business fabrics.

How can organizations and government agencies weave diversity into their fabrics? In a separate empirical study we found that many organizations first need to develop a strategic plan incorporating a vision, mission, goals, strategies, and evaluation. Equally important is specifying the steps required to execute the strategic plan: defining diversity; identifying who would do what and according to what priorities; defining strategies for managing accessions and career development, involving leadership, and ensuring accountability; and establishing metrics to guide progress.

These findings are highlighted in two recent RAND reports:

Why Empirical Evidence Is Crucial in Managing Diversity

RAND's empirical approach provides decisionmakers with hard evidence about specific diversity practices that are most likely to work in their organizations. The general diversity management literature, in contrast, consists of a laundry list of best practices that is not well organized, prioritized, or integrated. It lumps all companies together, rather than taking into account each unique company's unique goals, resources, number of employees, business locations, product lines and customer bases.

The framework that RAND has developed helps decisionmakers identify key environmental factors such as industrial context of the firm and organizational factors–including an organization's size, age and geographic location–that may have a significant impact on an organization's level of diversity.

But implementing effective programs is difficult, even in organizations that are friendly to diversity. RAND's work suggests that leaders need to define diversity, explain why they desire higher levels of diversity, how they intend to measure progress toward greater diversity, and articulate how they will hold themselves and others accountable for such progress. Top leaders need to be involved at every stage. They cannot delegate the task of defining diversity. Nor can they be divorced from the effort to establish effective measures.

RAND's empirical approach is designed to help top leaders clearly define diversity, develop rigorous metrics to support that definition, and design and apply comprehensive accountability systems with real rewards and consequences for individuals and groups. This approach will become increasingly critical as more and more organizations grapple with diversity in the coming years, and RAND looks forward to helping public and private organizations think through how to manage these developments.