Diversity Initiatives Enhance Profitability

June 4, 2001 (PLANSPONSOR.com) - Diversity initiatives have a direct impact on profitability and help organizations maintain their competitive advantage, according to a survey.

The survey, titled Impact of Diversity Initiatives on Bottom Line was released by the Society for Human Resource Management (SHRM) and Fortune magazine. It included the responses of 121 human resources professionals from both Fortune 1000 companies and those on the magazine’s list of the 100 top employers.
The majority of respondents said diversity initiatives have affected the company’s bottom line by:

  • improving corporate culture, cited by 79%,
  • improving recruitment results, noted by 77%, and
  • improving client relations, mentioned by 52%.


More than nine out of every 10 human resources professionals polled affirmed that their company’s diversity initiatives helped their organization to keep a competitive edge, and did so in the following ways:

  • improving corporate culture was noted by 83% of respondents,
  • lifting employee morale was mentioned by 79%,
  • some 58% said it decreases interpersonal conflict among workers;
  • just under 60% said increases creativity, and
  • a little over half cited increased productivity.


In contrast to these benefits, respondents also noted negative consequences to implementing diversity initiatives. Indeed, some 57% noted that such initiatives raise expectations for action that might not be met, while a drain on resources was cited by 38% who noted costs and 30% who mentioned the staff time investment. On the other hand, 25% of respondents could see no clear disadvantages to having such initiatives.

Among the diversity practices of the companies polled, the most common initiatives were:

  • recruiting efforts designed to help increase diversity within the organization, listed by three quarters of respondents
  • diversity training initiatives, education, and awareness efforts, noted by 66%, and community outreach related to diversity was cited by 61%.

At the other extreme, least cited programs were:

  • diversity-related conflict resolution, by 16% and
  • company-paid literacy training, cited by 11%.

Diversity Defined

Almost all (96%) of initiatives listed by respondents included race as an aspect of diversity, while 88% cover gender, 65% relate to age, 64% include disability and 57% cover sexual orientation.