To illustrate, DiversityInc interviewed companies that are veteran participants—Verizon Communications/Wireless, Merck & Co. and Sprint Nextel (Nos. 1, 34 and 39 on the 2006 Top 50 list, respectively) and rookies Harris Bank and Novartis Pharmaceuticals (Nos. 41 and 42 on the 2006 Top 50 list).
1. Recruitment
New hires at 2006 Top 50 companies were more than 50 percent more people of color than representation in the U.S. adult work force (43 percent vs. 28.3 percent). Companies that are known to recruit people of color attract top talent of color through that recognition. And it's an escalating statistic because the talent pool is limited, so as people of color incrementally increase at Top 50 companies, other companies fall further and further behind.
Here's what the companies say:
Novartis Pharmaceuticals: "A couple of years ago, we'd go to different recruitment fairs and venues and no one knew who Novartis was ... and in the minority communities, it was even worse," recalls Michelle Gadsden-Williams, vice president and global head, office of diversity and inclusion. "We're now perceived as an employer who truly embraces diversity and inclusion. Now when we're at these recruitment fairs, we have lines snaking around."
Novartis first participated in The DiversityInc Top 50 Companies for Diversity survey in 2006. The company's employees had a lot to do with Novartis making the list. Novartis' employee-resource groups helped the company with recruitment and marketing in 2005. As a result, Novartis hired 12.5 percent more women in 2005 than in 2004, 54 percent to 48 percent.
Verizon Communications/Wireless: "The Top 50 survey gives us an opportunity to focus and bring greater discipline to our diversity and inclusion efforts," says Magda Yrizarry, vice president of workplace culture, diversity and compliance.
Verizon's percentage of new hires reflect its increasing recognition of its marketplace. Of the company's new hires in 2005, 46 percent were people of color, compared with 39 percent the previous years. Of female new hires, in 2005, 53 percent were women of color, compared with 42 percent in 2004.
Harris: "It's obviously an enhancement to our image that we're recognized externally as a leader in diversity," says Marjorie Paddock, vice president of diversity and workplace equity. "Because of that enhancement to our image, we can't help but think people will consider us a place where they would want to work."
Merck & Co.: The Top 50 recognition has enabled Merck to showcase its efforts to recruit executives of color who traditionally have not looked to the pharmaceutical industry when considering careers, says Deborah Dagit, executive director of diversity and work environment.
"The pharmaceutical sector has been under fire for a number of years now, and Merck has not been alone in that, so positive information about who we are and who we stand for can overcome that [negative] noise factor," says Dagit.
2. Retention
Top 50 companies, especially those in the Top 50, demonstrate unbiased retention, meaning retention rates are similar across ethnic and gender groups. This is not the norm in corporate America, where white men usually have far greater retention rates.
Verizon: Participating in the Top 50 survey has prioritized Verizon's efforts around retention practices. For example, mentoring is an important aspect of the survey's questions, which made Verizon realize its critical importance to retention. The Top 50 survey "allows us to look deeper in our policies and programs ... to probe deeper about what are the real benefits to employees who take advantage of the programs and policies we feel are part of the diversity mix," says Yrizarry.
The company audited its talent-management programs by considering who gets mentored, how and by whom. In 2005, Verizon sponsored more than 4,000 internal mentoring partnerships, and 21 percent of the company's managers participated in mentoring programs, which is in line with the Top 50 average.
Verizon created its Developmental Leadership Initiative (DLI) to help build a pool of diverse executives to step into the company's senior positions. DLI participants are trained to work on diversity business-case problems, develop interpersonal relationships and gain exposure to senior leaders. Supervisors ensure the diverse executive's development plan covers the educational gaps and moves forward on schedule.
Novartis: "I think [the Top 50 survey ranking] has given people license to be more candid about who they are authentically," says Gadsden-Williams.
Novartis' employee-resource groups have increased membership since the company made the Top 50, she notes. For example, the African-American Leaders group saw its ranks increase from 387 to 470, a 21 percent increase.
"[This is] due to the fact that we not only made the list but the [employee-resource] groups did a lot to inform folks," says Gadsden-Williams. "It's giving people the courage to be their authentic selves within this organization. You have an employee population that's happier, more productive, willing to reach out and extend themselves more than before."
3. Talent Development
Top 50 companies place more emphasis on ensuring that their senior ranks feature an array of diverse talent. Out of all management employees promoted at Top 50 companies, 28.2 percent were executives of color. Comparably, of the bottom quarter of respondents that participated in the survey, only 18.5 percent of promotions went to executives of color.
Verizon: Executives of color accounted for 34 percent of the company's promotions in 2005. Equitable treatment of employees has led to greater collaboration between its employee-resource groups, which focus on talent development among other business tactics.
Wave, the employee-resource group for women, launched a mentoring curriculum to train its members.
"People are reaching outside of their own constituency to build a more inclusive culture," says Yrizarry. "The survey elevates everybody's awareness and validates the attention you have on diversity and inclusion."
Sprint Nextel: Executives of color accounted for 28 percent of the company's promotions in 2005. After first participating in the Top 50 survey three years ago, the company compared its employee-resource groups against that of other Top 50 companies and learned they needed a boost, especially for leadership development.
"One of the ways we've used the information we've received from participating in DiversityInc's survey," says Ralph Reid, vice president of corporate social responsibility for Sprint Nextel, "is that employee-resource groups are vital to an organization's inclusion and diversity initiatives—so important that we recently launched two new employee-resource groups: one for our Asian-Pacific-American employees and the second is the gay, lesbian, bisexual and transgender group."
Reid's office decided to officially sponsor employee-resource groups, providing training, mentoring and financial assistance for them to offer employee-development programs.
Merck: Merck's ranking on the DiversityInc Top 50 survey reiterated to employees the company's dedication to diversity and inclusion, says Dagit.
For example, Merck's Asian-Pacific Islander employee network requested a development program designed specifically to address the cultural needs of Asian-Pacific Islander employees. The Asian-Pacific Network (APN) recently recommended that leadership education be tailored specifically for Asian-Pacific employees.
"The training was designed and developed by and for people from the Asian-Pacific Islander community to align their cultural values and operating norms with a U.S.-based company in a way that a person of Asian-Pacific heritage does not need to dishonor or abandon their culture," says Dagit.
4. Marketing and Supplier Diversity
Top 50 companies spend an average of 13 percent of their advertising dollars on multicultural advertising that specifically targets people of color, LGBT people or people with disabilities. This compares with an average of 8.4 percent among the bottom quarter of entrants to the survey last year.
Merck: Merck uses its employee-resource groups to gauge the effectiveness of its marketing to Latino doctors and the Latino community.
"The Hispanic group looks at how we market our products in the Hispanic market and gives us input ... on what we've done to differentiate our practices for the Latino market," says Dagit.
Harris: Recognition from the Top 50 ranking enhanced the bank's image among business owners of color and women business owners.
"Vendors are all looking for organizations that support diversity," said Paddock.
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