Hiring need spurs CEO push for diversity
by Thomas Black, Carol Hymowitz and Duane D. Stanford | Bloomberg News
General Electric, Xerox and General Mills have a message for U.S. courts: Hiring more women and minorities is good for profits.
That trio was among 57 large corporations that urged the U.S. Supreme Court to uphold affirmative action in college admissions this week. Now, with the University of Texas case handed back to a federal appeals court, they want to protect the programs that have provided an increasingly diverse talent pool.
Chief executive officers are weighing in as they try to build work forces to match shifting U.S. demographics. Private employers account for more than 80 percent of U.S. jobs, and they will fill future positions from a population that the U.S. Census Bureau projects will tip to a non-white majority by 2043.
“It’s very important for the company to capture and have within our ranks employees who really understand the broad spectrum of American society in order for us to be an effective consumer goods company,” General Mills CEO Ken Powell said in an interview. “We strongly believe in that.”
The Supreme Court voted 7-1 this week in a case involving the University of Texas to leave intact a 2003 decision allowing the use of race in considering student applications. At the same time, justices told the U.S. Court of Appeals in New Orleans to review whether diversity can be achieved without taking race into account, leaving the ultimate outcome in doubt.
Universities’ “interest here is to achieve a diverse student population,” said Yolanda Seals-Coffield, an attorney for PricewaterhouseCoopers LLP, who led the firm’s involvement in a so-called amicus brief to the Supreme Court. “Our interests are aligned that way.”
While GE said this week that it was “pleased” that the Supreme Court left its 2003 affirmative action ruling in place, most corporations that sided with the University of Texas declined to comment on the specifics of the justices’ ruling.
“Our focus in joining the amicus brief was on the benefits that U.S.-based global companies like P&G gain from fostering a diverse work force and inclusive culture,” said Mary Ralles, a spokeswoman for Procter & Gamble Co.
Since 1976, the share of non-white students enrolled at degree-granting institutions has climbed to 39 percent last year from less than 16 percent, according to Education Department statistics. Hispanics gained the most, jumping to 14 percent of total enrollment from 3.6 percent in 1976.
Department data from 2011 show the gaps that remain in educational attainment by race: Of whites 25 and older, 34 percent had obtained a bachelor’s degree or higher, compared with 20 percent for blacks and 14 percent for Hispanics. For Asians, the figure was 51 percent.
Not all companies are equal on inclusiveness, said Patrick McKay, who leads the Human Resource Management Department at Rutgers University in New Jersey. Many still meet only minimum affirmative-action requirements to bid on federal contracts, and U.S. corporate leadership remains overwhelmingly white and male, he said.
“Decisions are made in the boardroom, and there’s gross underrepresentation of women and minorities in the upper echelons of companies,” McKay said.
Women comprised 17 percent of independent corporate directors last year, up from 12 percent in 2002, according to a study by New York-based consultant Spencer Stuart. For the top 200 companies on the Standard & Poor’s 500 Index, 16 percent of board members were minorities, excluding foreigners.
Recent legal history also shows the continuing tensions at the intersection of hiring, promotions and race.
FedEx reached a $3 million settlement last year with the U.S. Labor Department in a hiring practices case without admitting wrongdoing. The department said it found evidence of discrimination against 21,635 rejected applicants based on sex, race and national origin at 23 facilities in 15 states. A FedEx spokeswoman, Bonny Harrison, said the company had no comment on the case.
In 2012, 16 Coca-Cola employees in New York filed a discrimination lawsuit that was transferred from state to federal court. That was more than a decade after the Atlanta- based company agreed to pay $192.5 million and create an independent review panel to settle a racial-bias lawsuit brought by about 2,200 minority workers.
“Coca-Cola does not tolerate discrimination, harassment or retaliation,” a spokesman, Scott Williamson, said in an email while declining to comment specifically on the 2012 suit. “We have a culture that welcomes and supports diversity.”
Xerox is among the companies trying to signal the importance of diversity with an internal review board. Its members include executives who report directly to CEO Ursula Burns, the first black woman to lead an S&P 500 company.
“This isn’t a stand-alone silo, it’s integrated into our management,” said Damika Arnold, manager of global diversity and inclusion at Norwalk, Conn.-based Xerox. “We see it as a competitive advantage.”
An inclusive work force helps in recruiting and retaining minority employees, said Lucy Sorrentini, chief of the office of diversity and inclusion for consultant Booz Allen Hamilton Holding Corp., which didn’t file a court brief in the University of Texas case.
“By having more and more of these role models, that’s directly impacting our attrition levels favorably,” Sorrentini said. “As we’re showcasing more of these diverse leaders, we have more people saying, ‘Hey, this is definitely the place where I want to stick around and grow my career.’”
McKay of Rutgers called the Supreme Court’s ruling a “near miss” on scrapping affirmative action for college enrollment. While U.S. business have a long way to go in ensuring diversity at all levels, support from some of the country’s largest corporations sets a good tone for the rest, McKay said.
“It’s good that they’re sensitive to the issue. I’m encouraged, actually,” he said. “It shows that they’re thinking in the right direction.”