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Penny Sallberg and Michael Carrillo of CPGjoblist flank Dennis Kennedy, executive director of the Texas Diversity Council. The executives attended the council's Texas Diversity & Leadership Conference, May 24-26 in Dallas, where CPGjoblist was recognized for its support of the Texas Diversity Council and for promoting diversity in the consumer packaged goods industry. CPGjoblist is a founding member of the Texas council's sister organization, the California Diversity Council. For more information visit www.californiadiversitycouncil.org.

Diversity: Right reasons
to do the right thing

First in a two-part series

Everyone talks about diversity. But genuine progress on the advancement of women and people of color in the consumer packaged goods industry has been slow.

Consider these facts reported by the Network of Executive Women: While three-quarters of the American population and nearly two-thirds of the nation’s workforce is comprised of women and ethnic minorities, women comprise just 19 percent of senior management positions, while people of color hold only 16.7 percent of these key management roles.

The food production, food wholesaling, and the food and drug store segments all rank below the Fortune 500 average with only 7.1 percent, 11 percent, and 11.7 percent, respectively, of corporate officer positions held by women, NEW reports. Other industry segments perform slightly better on women's representation in senior management: food/consumer products, at 15.4 percent; general merchandisers, 18.2 percent; beverages, 22.5 percent; and tobacco, 29.7 percent.

"Diversity in hiring is critical to industry competitiveness," according to Michael Carrillo, president of CPGjoblist. "Diverse teams produce diverse thinking, and that makes them better adapted to lead an increasingly diverse workforce and reach today's diverse consumer markets."

Dennis Kennedy, CEO and founder of the Texas Diversity Council, is an expert on the business case for diversity. His organization was founded just two years ago and has already attracted 100 corporate members and 2,500 individuals. It has expanded to include the new California Diversity Council of which CPGjoblist is a founding member, and the National Diversity Council, an umbrella group joining the two networks.

Kennedy, a professor of business management at the University of Texas, says the case for diversity is a three-legged stool. "First, diversity helps you understand the changing marketplace. Second, changing demographics [mean] that the typical employee is no longer an Anglo male -- there are more older people, more women and more people of color in the workplace," he says. "They need to be empowered." Finally, "the third driver is the legal aspects." He cites class-action suits against Texaco and Wal-Mart that have given the retail industry costly lessons on diversity.

Diversity equals profits

Gender diversity in management has a direct effect on the bottom line, according to a 2004 survey by industry research group Catalyst. According to their survey of Fortune 500 companies, companies with the most women in senior management positions had a 35 percent higher return on equity than companies with the fewest female executives.

A report from the Network of Executive Women, an industry association sponsored and supported by CPGjoblist, expands on the Catalyst findings. Their report says that "diversity increases company morale, expands your talent pool and helps attract and retain quality workers. It increases productivity by promoting better communication and minimizing conflict."

"Diversity is valuable externally, as well," according to NEW. "It helps you better understand today’s diverse consumers and capitalize on new, growing markets. An organization that can speak the language of today’s multicultural and international customers will enjoy a strategic advantage over those that can’t."

More than black and white

Diversity management has evolved far beyond a black/white, male/female issue. Diversity management encompasses personal factors like gender, ethnicity, race, age, sexual orientation, physical ability, religion, work experience, income, and geographical location, plus company characteristics like job function, job specialty, professional affiliation and location. "There is real strength when you start to put together leadership teams that mix and match these variables," Carrillo says. "The sum becomes greater than the parts."

According to the Society for Human Resource Management, 84 percent of Fortune 500 HR say their top-level executives think diversity management is important. One reason for executives' overwhelming support of diversity management is the changing face of American business. "Creating diverse work teams is especially important as corporate structures change," Carrillo says. "The ranks of middle management have been thinned, and new methods of communicating and executing are required to achieve management goals."

"My clients are competing for customers worldwide, working with vendors around the world, and managing the most diverse workforce in history," Carrillo says Diversity management is not just one tool, it is the competitive edge that will mean the difference between companies that survive or fail in the coming years."

In part two of this series, we'll examine how your company can reap the business benefits of diversity and join with CPGjoblist in supporting industry diversity.

Michael Carrillo is president of CPGjoblist, the CPG industry’s leading candidate referral service for HR professionals and employers. You may contact him at Michael@cpgjoblist.com or call (626) 535-0143.

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