By Pepi Sappal,

Today, no business doubts the bottom-line benefits of a diverse customer base. What company wouldn’t want a slice of the $750 billion combined annual spending of African-American, Asian-American and Hispanic communities in the U.S.? And if you add to that the growing strength of the pink dollar and the retiring population, we’re talking big bucks. But it’s impossible to exploit all those markets, both at home and abroad, unless organizations are in touch with those consumers’ needs.

“The best way to do that is by recruiting a diverse workforce that mirrors your customer base,” says John Brock, chief operating officer of Cadbury Schweppes, the U.K. food and drinks company. “By managing this diversity effectively, we get a better understanding of our customers. And that’s a significant competitive advantage.”

Organizations that have invested in diversity initiatives have reaped the benefits. Take Union Bank of California, which was voted “Best Company for Minorities” by Fortune magazine in 1999. Its stock has appreciated at a 34% compound rate for the past five years. In fact, Fortune’s top 50 best companies for minorities as a whole outperformed the S&P 500. No wonder other organizations are following suit.

But it’s not just about the bottom line any more. The real reason organizations are pursuing diverse talent is that they won’t have a labor force if they’re considered exclusive. According to Geoff Unwin, chief executive officer of management and IT consulting firm Cap Gemini Ernst & Young, demographics in the West are working against the needs of global corporations.

Talent Spotting

“The rising demand for talent, combined with falling birth rates, is resulting in fierce competitions for the best recruits,” says Mr. Unwin, who now dedicates 60% of his time to talent spotting. “And, given that tomorrow’s work force will come from the developing parts of the world, a diverse make-up now is crucial to attract that talent in coming years. After all, without them we don’t have a business.”

Cap Gemini Ernst & Young is not the only organization that’s putting the battle for talent at the top of its boardroom agenda. According to the Society of Human Resource Management’s (SHRM) 1998 survey on diversity programs, nine out of 10 respondents from Fortune 500 organizations are actively recruiting women, African-Americans and Hispanics. They’re also taking steps to bring more Asians, Native Americans and people with disabilities into their organizations.

But because this minority talent is so much in demand, traditional recruiting methods don’t always work. And, more often than not, because of the shrinking talent pool, organizations are having to look outside their own borders. Silicon Valley is a case in point, where many high-tech companies and dot-coms have resorted to bringing in skilled Web programmers from Asia.

That said, recruiting the most skilled women and people of color takes more than the standard employment agency or classified-ad approach, wherever the potential recruits are based. Although the Web is successful at generating a good response from all corners of the globe, it doesn’t always produce the right response. And, although a somewhat better response tends to be generated by posting job notices at community centers where target groups congregate, or by advertising with specialized employment agencies, it’s just not enough.

For this reason many businesses have started to use more proactive and creative strategies to win these diverse groups over. For example, Cadbury Schweppes supports several initiatives like the Hispanic Heritage Awards, which are given to Hispanic people such as Gloria Estefan for major contributions to the arts and business. But Cadbury Schweppes also gets actively involved in initiatives of the International Association of Students in Economics and Management, which goes by the French acronym AIESEC and is the world’s largest such organization, facilitating thousands of business exchanges a year.

This year, for example, Cadbury Schweppes supported AIESEC’s Developing Leaders Day 2000 in Edinburgh, Scotland. “Not only did this event give us the opportunity to meet and develop leaders of the future, but it also gave us access to some 50,000 graduates from 84 countries,” says Mr. Brock. As a recruiter of some 4,500 graduates a year worldwide, Mr. Unwin also made the most of this gathering: “My staff and I took the opportunity to talk to these students from all around the world to get an idea of what they were looking for from organizations like us, so that we can translate that into our recruitment policies.”

Niche Networking

According to AIESEC’s president, Jose Pablo Retana, many other blue-chip companies like American Express and KPMG take an active interest in AIESEC because it’s the perfect place to find new leaders who will eventually fill today’s Anglo-Saxon-dominated boards.

Companies like Ford, however, are concentrating on targeted efforts through specific communities. “To reach diverse communities, we’re doing things like targeting universities with a higher percentage of women and minority groups, as well as getting involved with disability groups and local communities,” says Surinder Sharma, European diversity director at Ford. “By making these links, we’re expanding the pool that we can fish in for our future talent.”

Surprisingly, the most effective route that corporations are using to attract a diverse following is through their existing employees. According to SHRM, 71% of companies surveyed reported that employee referrals resulted in the most minority hires.

Lance Richards, international human-resources director of Canadian telecommunications company Teleglobe, says one-third of his firm’s 2,000 employees, scattered in more than 51 countries, have been hired in this way. This phenomenal response was generated by word of mouth after Teleglobe simply pinned up posters in six different languages throughout its offices offering a referral bonus.

To really win minority recruits over, organizations are having to offer more than a generous financial package. That’s why some companies are going that extra mile to accommodate several faiths and lifestyles. And we’re not talking about days off, flexible hours or offering concierge services, but incentives like a muezzin’s call programmed into a computer so that Muslim employees know when to roll out their prayer rug, and providing menus comprising halal and kosher meals in company canteens.


This article is reprinted with permission from Career Journal, the executive career site of theWall Street Journal. is committed to presenting diverse points of view. However, the viewpoint expressed in this article is the opinion of the author and is not necessarily the viewpoint of the owners or employees at IMD.