Workforce Diversity essay

As our nation becomes more ethnically and culturally diverse, companies are under pressure with the issue of workforce diversity. Managing diversity is not a new issue faced by companies. But the way it is used or managed has changed. The latest development is to use diversity as a competitive business strategy. Allstate is one of companies that is culturally diverse and is seeing improved results ranging from better customer satisfaction to increased sales.

For several years, diversified workforce was social responsibility and legal necessity. It was thought that competitiveness and corporate social responsibility were opposing policies. A competitive organization was driven by profit maximization. But in today’s world, both views have converged. Both are equally important for business. Allstate is one such example.

Allstate insurance company has been managing diversity which is closely associated to its overall corporate objectives. The company launched its first affirmative action program in 1969. The focus was on affirmative action and diversity awareness through education and training. Allstate formulated four specific steps – succession planning, development, measurement, accountability and reward to create powerful diverse environment that had positive impact on business results.

All the elements included in the steps are aimed at retaining the best employees. Under succession planning, Allstate uses several methods to seek out the best candidates for each key position. The main purpose is to ensure that workforce is diverse at levels. As a result of succession planning, 40% of Allstate’s executives are women and 20% are minorities. Through the development process, all employees receive an evaluation of their current job skills and ways for developing skills required for advancement. Twice a year the company provides a survey to its employees, which is part of measurement step. The feedback from employees helps in creating plans to solve problems and improve work diversity. Also to link compensation to the diversity goals, 25% of each manager’s merit pay is based on the diversity index.

By incorporating the above steps, Allstate has used diversity, a powerful tool, for building competitive advantage. The company has been able to attract and retain motivated employees. Allstate has a reputation for providing opportunities for diverse employees, which has given it a competitive advantage in the labor market. Since employees think their differences are respected they become more loyal, productive and committed.

The composition of the customer base of companies has changed due to diversity. A multicultural workforce can provide a company with greater knowledge of the consuming habits and preferences of consumers. This knowledge can assist Allstate in developing better marketing campaigns and services to satisfy customer needs. Also diverse work teams promote creativity and innovation, because people from different background and situations have different opinions. If Allstate effectively manages these work teams then more options and solutions can be generated. Diverse workforce also brings flexibility and competitiveness to an organization.

Due to its diversity efforts, Allstate in 2002 was named one of the “50 Best Companies for Minorities” by Fortune. Also it was included in the top 10 in the “100 Best Companies for Working Mothers” survey done by Working Mother magazine. A. Magazine included Allstate among “Five Model Companies for Asians.” Like Joan Crockett, VP of human resources said, “The accolades are nice, but they still represent an opportunity for further improvement.”

Allstate should also focus on employing senior citizens and tapping into the senior market as a diversifying initiative. The baby boomers will soon be in the senior citizen brackets. There are not many companies who employ senior citizens or insurance companies who offer senior citizen insurance package. By focusing in this area Allstate will be an equal opportunity leader in the true sense.

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