Diversity and Inclusion – Why Now?

Posted by: Laurie Dowling, National Utilities Diversity Council on Tuesday, September 19, 2017

All of us at NUDC are thinking of our sisters and brothers in Florida, Houston and Atlantic and Gulf Coasts.  If you can, please make a gift to a charity of your choice that is helping those affected by Hurricanes Harvey and Irma - a national charity such as the American Red Cross http://www.redcross.org/ or a regional charity of your choice.  We send our thanks to the dedicated women and men in the utilities and public service commissions who are working to make sure these areas are connected in every way.

Why is Diversity Important?  Why Now?

The US is facing the largest turnover of workforce in our nation’s history as the baby boomer generation retires.  Some have called this effect the “silver tsunami.”  Whatever we call it, there is a change underway in the employment landscape. 

What we know is that in the utility industry at least 40% of employees are eligible for retirement or will be in the coming five years (this number is much larger in some job categories).  We also know that the make up of the US population, and the pool of future employees, continues to change as generational, gender, and racial diversity increases in current and future workers.

But Why is Diversity Important?

Diversity Data Infographic

Some of it is math.

  • By 2044 the US will be a multi-ethnic majority country.
  • By 2020 34% of the workforce will be from the millennial generation.
  • 35%. Data shows us that companies with a diverse workforce are 35% more likely to financially outperform the industry median
  • Median years of tenure for millennial employees aged 25-34.
  • 2. Median years of utility employees in 2014.

Some of it is pragmatic.

  • 10,500.  Number of people who retired every day in the US in 2016.
  • A 2014 survey by MyKindaCrowd found that 69% of students between the ages of 12 and 25 said that the lack of diversity in a workplace would prevent them from working for a particular employer. This data reflects Generation Z, who have just turned 18 and are entering the workforce.
  •  “It makes good business sense to have an employee base that looks like our customer base.  To truly serve the populations we want to serve, we need diverse groups of employees, suppliers and vendors.” (42% of AT&T’s workforce is people of color.) Cynthia Marshall, AT&T (Workplace Diversity and Inclusion Gets Innovative, SHRM 2017)

Who will do the work?

  • In 2016 the President’s Council of Advisors on Science and Technology stated that over the next decade 1 million additional STEM graduates will be needed in the U.S.
  • The Public Policy Institute of California projects a shortfall of 1 million college graduates to do work in CA alone by 2025.
  • “If you’re not good at attracting and retaining women and people of color, you’re competing for a smaller portion of talent.” Joe Gerstandt (Workplace Diversity and Inclusion Gets Innovative, SHRM 2017)

 Some of it is about perspective.

  • For over two decades scientists have concluded that diverse teams bring new and varying perspectives to problem solving. (Making Differences Matter, Thomas & Ely, HBR 1996)
  • There is additional data that indicates valued team members who have different experiences can help companies avoid the “group think” trap that can ensnare teams with only similar perspectives.

What about the bottom line?

  • Most companies track benefits from the involvement of their diverse employees, but the story of PepsiCo’s Frito Lay division is very interesting. In the early 2000s Latino employees – flavor scientists, marketers and the President, Al Bru – worked together to take the snacks that were selling well in Mexico (Sabritas) successfully into the US market.  They also tapped their unique cultural knowledge (and that of their families) to design new flavors such as limon, chile lime and other new tastes that had a significant impact on PepsiCo’s Frito Lay division bottom line.

Where does supplier diversity come in?

It’s good business.

  • Supplier diversity is not only good business; it is a wise practice to enhance connections with the communities served – our customers.
  • Consumer products companies like PepsiCo and IBM see supplier diversity as a way to make connection between the company and its customers. For example, IBM’s commitment to its LGBTQ suppliers, as early as the late 1990s, can be tracked to its push to grow market share with the LGBTQ community.
  • Consistent work with diverse suppliers helps grow the economy in communities in which a company operates. Diverse suppliers often hire increasing numbers of diverse employees.

What about the bottom line?

  • A number of companies, including San Diego Gas & Electric Company cite instances in which their diverse suppliers deliver creatively, under budget and on time and at highest quality.

What about Inclusion?

To highlight the importance of inclusion, we need only look at the data cited before. What we know is that we are replacing a large work population with a smaller one.  And we know that even with increased automation in some functions, there will be an increasing (and likely hard to meet) need for people to do the work of our industries, people for whom other industries also will be competing.  And as our tools continue to become more sophisticated most of our employees will need some facility with STEM topics and skills. 

If we follow this equation to its likely conclusion, it means that our companies, agencies, commissions and organizations will need to focus on talent and job potential rather than the outer packages of race, gender or physical ability. This presents an opportunity for tremendous creativity in how we approach organizational and industry opportunities and challenges.  But we will need all hands on deck to manage these challenges in an industry whose very definition is increasingly fluid.  The way this can work is if all of us in the boat are able to pull in the same direction.   That only works if we feel like valued members of the team – if we all feel truly included, if we create an organizational culture that values its diverse workforce and is flexible enough to accommodate their needs.  If a group feels left out by our inclusion work, then we’re not doing it right!

The Diversity Crystal Ball

What are the challenges best in class organizations will meet successfully in the coming years?

  • Becoming an employer of choice – for Millennials and Generation Z, for women, people of color, LGBTQ employees, and employees with disabilities.
  • Finding a way to make working in our industry compelling for young people in middle and high school.
  • Managing the talent pipeline, with special attention to middle manager opportunities and professional development.
  • Adapting employee management practices to meet the expectations of Millennial and Generation Z employees, who wish clear and frequent feedback and transparent pathways to meet their career goals.
  • Creating a culture that values work from all functions and which is open to innovation from all stakeholders.
  • Remembering that while we will be using artificial intelligence and drones we also will need people who can dig holes and pull cable. In other words, the organizational equivalent of rubbing our stomachs and patting our heads – the skills of highly evolved and disciplined organizations. 

If You Want to Know More

Here are some resources we suggest for further reading. 

  • US Energy Employment Report - US Department of Energy https://energy.gov/downloads/2017-us-energy-and-employment-report
  • State of Energy Workforce Report - Center for Energy Workforce Development  cewd.org
  • Accelerating Diversity for a Better Bottom Line, McCormick, UNC Kenan-Flagler Business School of Business.
  • Mentoring Dilemmas, Murrell, Crosby, Ely, editors.
  • Making Differences Matter, Thomas, Ely, Harvard Business Review.
  • America’s Competitive Secret, Rosener, Oxford University Press.
  • Millennial Careers:2020 Vision, Manpower Group.
  • Advancing a Jobs Driven Economy, STEMConnector.
  • TwoMentor, LLC, twomentor.com
  • Why Diversity Matters, Hunt, Layton, Prince. McKinsey & Co.
  • Meeting the Diversity Challenge at PepsiCo, Thomas, Creary, Harvard Business School

If You Want to Do More

Here are some organizations for your company or your employees to consider

(Note – HBCU institutions must be searched separately)


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