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The U.S. work force is rapidly transforming, thanks to changing demographics, work-force dynamics, immigration flows and globalization. At the same time, annual labor-force growth rates will slow to nearly a standstill by 2025. The work force is aging, and by 2030, there will be 35 million more jobs than people to fill them.

What does this mean in light of the historic significance of Labor Day? Remember that in the late 1800's, workers who were tired of low pay, inflexible hours, poor working conditions and limited job options mobilized in unions to protect and expand their rights. They created Labor Day—a holiday for "working people."  

Today, ours is an "employee-choice" economy.

"Companies almost have to take a selling job of what advantages they have over company 'X' and what they offer talented employees where they can come in and thrive and be developed," says Tony Jenkins, market president, central Florida region with Blue Cross and Blue Shield of Florida, No. 15 in The 2007 DiversityInc Top 50 Companies for Diversity^® and No. 10 in the Top 10 Companies for Recruitment & Retention (Top 10 R&R).

"Labor Day has always been about taking time to reflect on the achievements and success of the American worker," adds Bob Reed, vice president, diversity and inclusion at AT&T, No. 3 in the Top 50 and in the Top 10 R&R. "The U.S. work force is getting more and more diverse today ... and that diversity has led to greater innovation."

Studies consistently show that diversity engenders a more creative work force, but the convergence of different attitudes, beliefs and experiences along racial/ethnic, gender and other lines present new challenges for employers seeking to motivate their workers.

The 2007 DiversityInc Top 50 Companies for Diversity know that failure to prepare for and leverage these changes translates into a long-term loss in margin—and they're branding themselves as diversity leaders to gain an edge in the market for talent.

Read the Chief Diversity Officers Roundtable in the upcoming Nov./Dec. 2007 issue of DiversityInc magazine for more best practices from leading diversity-management executives and to find out what's next on their agenda.

The New Employment Contract

Management-consulting firm Accenture, No. 50 in the Top 50, estimates that intangible assets such as employee engagement and innovation are now worth 70 percent of the market cap of companies in the S&P 500 compared with 20 percent in 1980.

"The U.S. economy is expected to expand at a moderately strong pace over the coming decade, with restrained inflation, continuing strong productivity growth, and a ... favorable outlook for a wide array of job opportunities," reports the Bureau of Labor Statistics. But most of the jobs opening up are going to be in management and business. And people of color will disproportionately be the new entrants to the work force.

Annual productivity rates will grow nearly three times faster than the work force from 2000 to 2014. Simply put, talent matters, perhaps now more than ever. 

"We know about the shortages, but you know it's not real to you until you try and replace somebody who's got that skill set and they're gone," says Redia Anderson Banks, chief diversity officer, national principal, diversity and inclusion, Deloitte & Touche USA. Deloitte is No. 19 in the Top 50 and No. 6 in the Top 10 Companies for Executive Women.  

"Bottom line is whatever we can do around retention that's going to help us win more talent, that's our business case, that's why diversity and inclusion, being able not just to find these people and keep them, but the environment has to be right so that they want to stay with you," adds Anderson Banks. "If you don't really connect the dots for that, you could wind up just going out and having a whole bunch of diversity, and so what? They will leave."

The Top 10 R&R demonstrate nearly equal retention of the entire work force and management, regardless of race/ethnicity and gender—the hallmark of a company's ability to forge healthy relationships built on trust and respect.

"Those are two important words," says Jenkins. For most companies, "the goal is to create products and services. To do that, you have to have high-performing teams, knowing that the teams are more diverse today."

"The real cornerstone to create these high-performing teams is respect and trust," he adds. "We focus on making sure the teams can communicate well across differences and across cultures because we know that individuals cannot shine above the team."

The Top 10 R&R are leaders on nearly every human-capital dimension evaluated in the Top 50 survey and are poised to gain a competitive edge in the talent war. (See chart below.)

Sources: 2007 DiversityInc Top 50 Companies for Diversity survey; Equal Employment Opportunity Commission; Bureau of Labor Statistics

Why Everyone Must Be Engaged

Turnover can be quite costly. A recent Level Playing Field Institute study estimates that unfairness in the workplace costs U.S. employers $64 billion annually—nearly equal to the 2006 revenues of Google, Goldman Sachs, Amazon.com and Starbucks combined, or the GDP of the 55th wealthiest country in the world. This estimate represents the cost of losing and replacing professionals who leave their employers solely because they feel they are being treated unfairly. This exceeds the cost of all race- and gender-bias lawsuits settled by the Equal Employment Opportunity Commission from 1997 to 2006.

More concerning, a new study from the University of Chicago shows that white workers are more satisfied (53 percent) with their jobs than black (40 percent) or Latino workers (46 percent), and older workers are more satisfied than younger ones. Companies will need to think creatively to engage an increasingly diverse work force with varying definitions of success and different career-development needs.

"We absolutely cannot afford to have any talent not engaged in work, given the developments in terms of our work force," says Geri Thomas, global diversity and inclusion executive and global consumer and small-business banking staffing executive for Bank of America, No. 1 in the Top 50 and No. 1 in the Top 10 R&R. "It's just going to get smaller, and we can't afford to have anyone not engaged."

Innovation and creativity are the differentiators in today's knowledge-based global economy.

"Given the population trends, and the evolving trends ... we can't grow our margins ... without understanding that everything we do from a consumer, customer, employee and community standpoint affects our ability to grow our business," says Ed Rodriguez, vice president, human resources, west business unit with Pepsi Bottling Group, No. 2 in the Top 50 and No. 4 in the Top 10 R&R.

"As companies, we've got to be astute in terms of how we go about getting the best talent," adds Reed. "In the end, people are going to be the ones that develop our brands." 

Read the census brief on Labor Day for more work-force facts.

More Work Force>>

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