The Diversity Machine by Frederick R. Lynch

Author:Frederick R. Lynch [Lynch, Frederick R.]
Language: eng
Format: epub
ISBN: 9780765807311
Barnesnoble:
Publisher: Transaction Publishers
Published: 2001-09-30T00:00:00+00:00

The Costs of Workforce Diversity

Just as the alleged benefits of workforce diversity programs are difficult to assess, especially with quantitative measures, so are the costs. In 1995, U.S. employers budgeted $52.2 billion for formal employee training. Diversity training was one of the hotter topics provided by 53 percent of firms with over 100 persons.42

As we have seen, however, most diversity training (when such training really is diversity training and not more legal updating on affirmative action rules) is of the one-shot variety and is not an especially big ticket item. It is, however, like paying insurance. A bit of such diversity training can help ward off expensive lawsuits, settlements, and adverse regulatory actions. Indeed tax-cutting proponent Steve Frates, executive director of the San Diego Taxpayers’ Association, told me how he justifies that city’s massive million-dollar diversity training program: “If it stops one sexual harassment suit, its worth the investment.” (On the other hand, such defensive training could backfire. Based on a court case involving California’s Lucky’s Supermarkets, seemingly racist or sexist statements made in diversity training sessions can be subpoenaed as evidence in subsequent discrimination cases.)

Permitting the formation of various cultural support groups is likely a negligible expense—if these activities are conducted after hours. (Executive listening time may be more costly.) On the other hand, the creation of full-time diversity managers in larger organizations suggests that the tasks are becoming too time-consuming to be added on to other responsibilities.

The most potentially expensive workforce diversity policy is the one urged most fervently by its most radical proponents: rewarding mangers for proportional promotion and retention of women and minorities. A recent Wall Street Journal assessment found that only a handful of corporations do this; it is not yet a trend, largely because “measuring the bottom-line benefits of diversity has been especially difficult for many U.S. corporations.”43 Insofar as such practices mimic the costs of affirmative action hiring, there is a general quantitative benchmark: Peter Brimelow and Leslie Spencers Forbes magazine study. The direct and indirect costs of the visible part of the “quota iceberg,” as they describe the programs, is approximately $113 to $116 billion. The below-the-waterline, hidden costs of bad hiring and misallocation of financial resources they estimate at $236 billion—and that does not include the likely huge expense of “effect on morale.” Affirmative action preferences, they conservatively conclude, have a total cost of more than 4 percent of the gross national product.44 Should the full range of spreading workforce diversity programs equal the costs of affirmative action, then the drag on the GNP may approach 10 percent—a development to delight the nations international competitors.

As with affirmative action, academic researchers—and many independent ones—sense that diversity management is a subject best not closely studied. A university professor who threw cold water on such policies, especially if he or she were in the liberal arts or softer social sciences, would likely be subjected to isolation, if not direct retribution. A researcher close to the heart of the diversity machine let the cat out of the bag: “People are afraid to find out that these programs don’t work.

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