Diversity gained a foothold in the United States in the 1960s, becoming increasingly common by the 1980s. What is diversity? Let’s start with what diversity is not. It is not a form of affirmative action (or, as it is called in the European Union, “positive action”), as is often believed to be the case in Germany. For example, it is not uncommon to hear from German HR personnel or executives that Germany already subscribes to the concept of diversity, since there are various statutes and regulations that provide support to groups that have traditionally been disadvantaged in the workplace, e.g., women and the disabled.
Diversity as a Marketing Instrument
Diversity is a strategy by which companies seek to have a broad base of employees with various backgrounds and characteristics (in terms of age, national origin, race, sexual orientation, disability, religion, etc.) because these companies have realized that their customers share these backgrounds and characteristics. The more a company has in common with its customers and potential customers, the greater its success in the market will be.
Nobody is naïve enough to believe that companies initially became more diverse to facilitate their entry into new markets or to win new customers. Instead, diversity got its start, at least in the United States, as a direct response to the fear of employment-discrimination lawsuits. Companies learned that they were less apt to be the target of a discrimination action if they had a diverse employee population; or, if an employee did file a discrimination suit, the court would look more favorably upon the company if it had a diverse staff.
Benefits of Diversity
Companies eventually discovered that diversity could actually be a win-win situation. Employees with different characteristics introduced “new” ideas in the workplace, and at times, this resulted in the creation of a new customer base and markets for the employer (especially with the change in demographics as Asians, African Americans, and Hispanics became a greater influence on the U.S. economy). Simultaneously, diversity created opportunities for employees who had had employment opportunities closed to them in the past, often as a result of their “distinguishing” characteristics.
Though there were – and still are – naysayers, it is safe to say that every Fortune 500 company in the United States now has some sort of employee-diversity policy in place – the vast majority of these policies are “active” policies.
To further support the concept of diversity, the federal and local governments in the United States will often not award government contracts to a company unless that company is sufficiently diverse. Even law firms in the United States have been bitten by the diversity bug. Law firms have learned that larger corporate clients often take a law firm’s diversity into consideration when deciding which firm to engage, as these companies also want to reap the benefits of being diverse in terms of selecting diverse service providers.
Diversity in Germ any
Though diversity has not garnered nearly the same attention in Germany as in the United States, it is becoming more of an issue. This is due, in large part, to the increased attention given to discrimination in the workplace; undoubtedly, the enactment of the General Equal Treatment Act, and the discussions and debates leading up to this statute, played a vital role. In fact, earlier this year, one of Germany’s primary weekly business magazines had as its cover article, “Homosexual – And What Does That Have to Do With Business? A Lot.” The point of the article was that a diverse staff can lead to greater profitability.
To the extent diversity plays a role in Germany, the driving force continues to be the German subsidiaries of American companies. Until now, whenever companies asked their legal advisors in Germany what impact diversity plays in Germany, they would (depending on the advisors’ experience) usually get a quizzical look, as the concept of diversity was still unknown, or a flat-out response that diversity does not play a role in Germany, as “it is not needed.” Times, however, are changing. According to a 2005 study that included Germany’s largest companies, plus the German subsidiaries of the 50 largest U.S. companies, “only” 43 percent of the respondents said that they had not heard of diversity. (To be frank, it would not have been surprising if this number had been significantly higher.)
Supporting Diversity in the Workplace
When executives are first confronted with diversity, they are often skeptical. They see diversity as unnecessary, just another layer of bureaucracy, or possibly just another public relations gimmick that costs money and is destined to fail. Regardless, companies such as Ford, Deutsche Bank, Bertelsmann, and Volvo have diversity policies in place in Germany. These diversity policies include the following
- C oncluding works agreements to strive for more diverse employees;
- Supporting employee resource groups (e.g., a women’s engineering panel);
- Introducing and maintaining a mentoring program to support younger employees with different backgrounds to facilitate their integration into the workplace; and
- Providing management training to employees with different backgrounds or characteristics to improve the chances that these employees will eventually join the ranks of management (the intended benefit is twofold: to gain greater acceptance among customers with similar backgrounds or characteristics and to decrease turnover of employees with different backgrounds or characteristics, as they will better be able to relate to their managers).
It is almost cer tain that diversit y will play an everincreasing role in Germany. Germany’s population is becoming more diverse (e.g., immigrants from Eastern Europe). Though, as in the United States, there will probably not be any laws that require a diverse employee population, it’s a good bet that federal and local governments in Germany will eventually support diversity by preferring companies with a diverse staff when awarding government contracts. Finally, assuming that the General Equal Treatment Act truly becomes a factor in German employment law, a diverse staff will serve the company well in terms of minimizing discrimination lawsuits.