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Tuesday, April 30, 2002

By Judy Olian

It's almost an insult to repeat, yet again, the case for diversity in the workplace.

First, the equal-opportunity argument: that each person deserves equal access and a fair chance in any civilized society. The other argument is that we're desperate for every hand in the work force given pervasive shortages in labor supply.

Now a new report and recently published statistics inform us how we're doing on diversity. It turns out the answer is: not so well.

As we know, based on Census 2000, the U.S. population is becoming increasingly diverse. In 2000, 23.4 percent of the population was found to comprise minority group members, with the expectation that percentage increases to 27 percent in 2011 and 32 percent in 2025. By 2050, as many as 38 percent will be in minority groups.

These dramatic shifts toward racial and ethnic diversity will be accompanied by continuing labor shortages. The U.S. Census and Bureau of Labor Statistics project that in 2030 as many as 19 million skilled jobs will go unfilled, and a total of 35 million job vacancies of all kinds will exist.

The Diversity Pipeline Alliance, a membership organization comprising 11 of the nation's most prominent academic institutions, corporate foundations and nonprofits, recently issued a new report: "Minorities Turning Backs on Business Careers." According to the report, "Labor shortages that appeared in the 1990s will not only recur, but will emerge as an ongoing condition of American business life." In short, we will need every worker for the good of society, and for the continued pre-eminence of the U.S. economy in the world. And yet employment discrimination that excludes many eligible workers is still a pernicious fact of our lives.

In a report issued recently, the Equal Employment Opportunity Commission (EEOC) confirms that race-based charges continue to top the list of EEOC claims, accounting for about 36 percent of the more than 80,000 total charges lodged in 2000 with the EEOC. Gender-based discrimination is the second-most prevalent basis for EEOC charges (31 percent of the lawsuits) and age-based discrimination comprises the third-most-frequent category of charges.

One indicator of the future is the number of minority students pursuing business degrees. Fewer minority group members are entering business undergraduate programs. In every ethnic category, there was a decline in the percentage of protected-group members receiving a business bachelor's degree.

In 1989, for example, 26 percent of African-American undergraduates pursued a degree in business, compared with 21 percent in 1998.

Not all the news is bad. The number of African Americans and Hispanics obtaining bachelor's degrees rose between 1989 and 1998 (8.3 percent of eligible African-Americans in 1989 compared with 14 percent in 1998, and 5.6 percent growing to 15.7 percent among Hispanics). Minority students increasingly pursued nonbusiness degrees, turning to biological and life sciences, health professions, education and the social sciences, all of which enjoyed increases in the number of degrees awarded to minority group members.

For business, the only bright spot is that the number of African Americans pursuing master of business administration degrees is keeping up with the eligible population. In 2008, 11 percent of MBA recipients are expected to be African Americans, vs. an estimated 12.4 percent of the general population who are African Americans.

Among Hispanics, their representation in the population (14.1 percent of the total in 2008) will far exceed the percentage of Hispanic MBA recipients (5.1 percent).

Where does that leave us? We still must work diligently to improve the integration of diversity into the routine of our lives and into the fabric of our workplaces. There's the obvious and unequivocal moral position. But there's also the indisputable economic argument given changes in the population, and persistent shortages in the work force.

The pipeline is key, and in most instances there's cause for concern. The business pipeline isn't very encouraging, especially at the bachelor's level, where African Americans, Hispanics and American Indians are not attracted in sufficient numbers into business degrees. Sure, there are other channels for entry into business.

But these channels are less direct, and at some point over their careers most senior executives will need to acquire some form of business education.

There's similar concern regarding the pipeline for women. Women comprise 49 percent of undergraduate business degree recipients, 30 percent of MBA degree recipients and only 6.2 percent of the highest titleholders in the Fortune 500.

The annual snapshot of corporate boards of directors and top management teams will continue to be overwhelmingly white and male unless we change our own attitudes, and those of future leaders of America even before they enter the work force.

Judy Olian is dean of Penn State University's Smeal College of Business and specializes in strategic human resources management.