Even companies that are committed to diversity can find themselves on the receiving end of an employee class action lawsuit charging race, sex, or age discrimination. After the dust has settled, though, these companies sometimes find themselves motivated even beyond court requirements to re-evaluate their employment policies and make changes in their diversity practices. Two corporations-Sodexho Services Inc. and Citigroup Inc.-agreed to discuss their actions after experiencing employee-initiated class action lawsuits. Their ability to create a positive outcome from a challenging experience is an inspiring lesson for all companies.
"It's [diversity] a part of how we can win the battle for talent. By being a diversity elite company and by creating an inclusive work environment, we can create an atmosphere where everyone can succeed, engage fully, and provide culturally competent services for our clients and customers. In fact, other companies need to get on board with diversity and inclusion, or they're going to become dinosaurs."
Dr. Rohini Anand-Sodexho
Sodexho Implements Innovation in Diversity
In 2001, African American managers of food service management company Sodexho, based in Gaithersburg, Md., filed a class action lawsuit charging racial bias. Sodexho is an international food services company specializing in cafeterias, business catering, office coffee services, and non-food support such as laundries, housekeeping, and concierge services. Without admitting to wrongdoing, Sodexho settled the case for $80 million and signed a consent degree, a voluntary agreement between parties to a suit in which the defendant agrees to cease activities alleged by the government to be illegal, in return for an end to the charges.
So what has Sodexho done since the lawsuit to increase its diversity efforts? Sodexho's chief diversity officer, Dr. Rohini Anand, says the company has taken huge strides in the past four years, and that inclusiveness is part of its competitive strategy. "There are several reasons why diversity is important to Sodexho," says Anand. "First, it's the right thing to do. It's very much the core value of our company, and, secondly, diversity truly is a competitive advantage. If we are a leader in diversity, our clients will want to do business with us, and that's going to result in business growth. It is a competitive differentiator for us."
Anand feels inclusiveness helps Sodexho in a competitive labor market. "It's [diversity] a part of how we can win the battle for talent. By being a diversity elite company and by creating an inclusive work environment, we can create an atmosphere where everyone can succeed, engage fully, and provide culturally competent services for our clients and customers," says Anand. "In fact, other companies need to get on board with diversity and inclusion, or they're going to become dinosaurs."
Sodexho promotes its policies in several innovative ways. "The first one is that diversity and inclusion is linked to our business strategy," says Anand. "That's critical, because in some organizations, it's viewed as something separate and set aside. The other piece that's innovative is a diversity scorecard that measures our progress in employee transactions. It's a state-of-the-art scorecard based on a 1000-point system, which looks at our progress in recruiting, retaining, and promoting women and minorities. We also have a section that measures qualitative process-those things that our managers are doing in order to get to the outcomes we're looking for. This scorecard is linked to incentive compensation. Ten percent to 15 percent of our managers' bonuses are tied to this scorecard, and we've committed to pay regardless of the financial performance of the company. I don't know of any other company that has made that commitment."
The process of embedding this culture is immense. "Sodexho is a very large organization with more than 110,000 employees in over 6000 locations across the United States, which makes it very challenging in terms of bringing about a cultural change initiative," adds Anand.
What, specifically, has Sodexho done to implement consent decree requirements? "Most of the consent decree requirements are met by initiatives we have had in place for years," Anand explains. "One of them is EEO and diversity training. Three-and-a-half years ago when I joined Sodexho, we trained 16,000 managers in one year with face-to-face training. This past year, we've put 7000 managers through diversity training. We have a career center where all open salaried positions are posted and anyone can apply. We hire about 5000 managers a year, and every one of those hires goes through a review panel to make sure that there was a broad-enough applicant pool, that they cast the net wide enough, that non-traditional avenues were explored, and that the best candidate was hired. This goes beyond the requirements of the consent decree. The panel reviews those decisions to make sure we are doing everything we need to do in terms of sourcing and then hiring the best qualified candidate."
"We have also established an Office of Employment Rights, an objective body that investigates any charges of discrimination," says Anand. "The good news is that people are using it; individuals are turning to the Office of Employment Rights, and if there's any perception of discrimination, an objective and unbiased investigation is done. The consent decree also asks that we support employee network groups, which we have been doing for four years now."
Anand says the company does several things to enhance the pipeline. "We have mentoring initiatives-formal and informal. We have a very robust learning strategy with several different training initiatives, including compliance training and diversity training, which are mandatory. However, we go way beyond the mandatory training by offering learning labs, which take our managers more in depth into certain aspects of diversity. All of this is part of our comprehensive diversity strategy, which is very much a top-down, bottom-up strategy. The top-down piece is that our CEO is firmly committed to an inclusive environment, and he is chair of our diversity leadership council. In addition, our executive team engages in several diversity learning experiences throughout the year. The bottom-up piece is the distributive leadership through various task forces we have in the organization, and our employee network groups that help embed the diversity messages throughout the organization. Our employee network groups are African American, Hispanic, women's, Asian, and gay/lesbian. All of these network groups further enhance and embed our diversity messages."
"From my perspective, the more significant portion of the settlement, rather than the dollar amount, is when a company agrees to modify its employment practices in some way."
Robert Stroup-Economic Justice Group, NAACP Legal Defense and Educational Fund
Citigroup Recruits Diverse EmployeesCitigroup is a financial services company handling matters in consumer banking and credit, corporate and investment banking, securities brokerage, and wealth management. It has approximately 300,000 employees. In 1998, Smith Barney, now a part of Citigroup, settled a sexual discrimination lawsuit in which part of the settlement was to spend $15 million on diversity programs. Since then, what has the company done to increase diversity?
"We feel good about attracting talent from what has been historically less represented communities in the workforce," says Ana Duarte McCarthy, director of global workforce diversity. "For example, we have very strong relationships with a couple of lead organizations, the National Black MBA Association and the National Society of Hispanic MBAs. It's a way to recruit graduating MBAs and mid-level professionals. We are also involved with internship programs, through which we source talent from both undergraduate and graduate/MBA programs."
What does Citigroup do in terms of promotions? "We put a lot of focus on developing talent, and one of the ways we do that is through engaging our more senior employees to mentor our emerging talent," says Duarte McCarthy. "We have different lines of business and some do it in different ways. For example, some businesses are able to provide employees with online mentoring contacts, so that someone could actually select a mentor who is in a different country or region. Other businesses have mentors through traditional paired mentoring. In 2002, we launched employee networks around the United States and the United Kingdom that focus on areas of interest around diversity segments. For example, we have a women's network and an African heritage network, and those networks are open to all employees who share a common interest. You don't have to be someone of African heritage to be part of the African heritage network. Those networks often run their own mentoring programs. The employee networks have to meet our overall diversity strategy and complement the objectives of the business. Some of the network's outlined objectives must complement areas such as our focus on talent, development, and customers."
Duarte McCarthy says the company has made progress since the lawsuit. "We're quite proud of a number of the initiatives that have been implemented," she says. "We've made strides in developing a culture that really understands the importance of diversity inclusion as being a key element to the company's bottom line."
Citigroup has specific programs for diversity. "We have diversity councils in various lines of business and within some of our regions, and we also have a Citigroup-wide diversity operating committee comprised of HR and diversity leaders who meet to align the diversity strategy across the businesses and leverage best practices," Duarte McCarthy explains.
"Every business develops a diversity plan, and progress against the plan is reviewed quarterly."
"For example, our Private Client Group in our Global Wealth Management sector coordinates annual Multicultural Symposiums, where we focus on fostering networking, support, and business building and wealth management techniques among a targeted employee base. The audience is rotated annually between African Americans/Hispanics and Asian Pacific Islanders/Native Americans."
"We continue to pay attention; it's a continual area of focus for us and we have an ongoing opportunity to do more. Working at fostering networking and support among our employee base is particularly important to us," Duarte McCarthy concludes.
Employment Practices More Important than Settlement Funds
"From my perspective, the more significant portion of the settlement, rather than the dollar amount, is when a company agrees to modify its employment practices in some way," says Robert Stroup, director of the Economic Justice Group of the National Association for the Advancement of Colored People (NAACP) Legal Defense and Educational Fund. "I don't mean to minimize the significance of large monetary settlements. Money is real, and if you've been denied a promotion or even been fired, that's important. Giving someone back pay is one step toward making that person whole from the discrimination suffered."
"We want to ensure that people are promoted on their merits, are treated with respect and dignity, and that around the world, we are a company for whom the best people want to work."
Ana Duarte McCarthy-Citigroup
"While that's a necessary element of relief, just giving money to an employee or an applicant for employment doesn't make that person whole from the discrimination suffered, nor does it prevent discrimination from occurring in the future," Stroup explains. "If a company has a discriminatory hiring practice, or a discriminatory promotion practice, the best thing to do is to deal with the practice itself. The settlements that I think are the more successful ones are the ones that also include requiring a company to look at its practices, re-evaluate them, and agree to make changes."
How Do the Numbers Reflect Policy?
Have the new policies and procedures improved diversity numbers at these corporations? Sodexho is proud of its numbers. "Our total population is about 58 percent female, 47 percent minority," says Anand. "The management population is 46 percent female and 33 percent minority. What's significant in the management population is that 13 percent of our management population is African American and 17 percent of our new hires were African Americans. We benchmark all of this against availability. The other significant piece is that 23 percent of the direct reports to the CEO are women, and 24 percent are minorities on our executive team."
The Sodexho law department has been an active partner in driving diversity and inclusion strategies throughout the company and within the law department. About half of the department's attorneys are women, and one-third are minorities. Sodexho's law department was honored by MCCA® as a 2003 "Employer of Choice" for the Mid-Atlantic region. The department is active in hosting minority law student interns and in supporting a wide range of minority and other diversity and community outreach endeavors.
The latest diversity numbers from Citigroup show a positive trend from 28.4 percent in 2002 to 33.4 percent in 2003, a five percent increase in its U.S. minority population. "Of particular note, our representation in professional jobs rose from 26.3 percent in 2002 to 34.6 percent in 2004, a strong 8.3 percent representation increase," says Duarte McCarthy, citing the company's 2004 diversity report. Supplier diversity increased, resulting in $725 million in spending with businesses owned by minorities, women, disabled veterans, and people with disabilities, an increase of 64 percent over the last three years, according to the report.
Diversity and Employer Awards
The companies who have made strides in their initiatives are proud of their recognition. Diversity Inc. has named Sodexho a "Top 10 Company for People with Disabilities," one of the "Top 10 Companies for Supplier Diversity," and a "Notable Company for Diversity." Sodexho ranked sixth among the "Top 40 Companies for Hispanics" by Hispanic Business magazine; appeared on the "Top 50 Companies for Latinas" list in LATINAStyle magazine; was among HISPANIC Magazine's "Corporate 100 List" of companies that provide the most opportunities for Hispanics; and was named to Hispanic Trends magazine's list of "Top 50 Corporations for Supplier Diversity."
Sodexho was also named a "Top 25 Company for African Americans" by Black Professionals magazine, and was ranked among the "Top 100 Employers for the Class of 2005" by The Black Collegian magazine. The company has received the Profiles in Diversity Journal's International Innovation in Diversity Award for its accredited Action Learning Program, an initiative that provides employees with the opportunity to earn a college degree while at work. Sodexho also received the National Women's Business Center's Diversity Innovator Award, and is one of Asian Enterprise magazine's "Top 10 Companies for Asian Americans in 2005." Sodexho also received the Joseph Papp Corporate Diversity Award from the Foundation for Ethnic Understanding. Most recently, the Sodexho law department was honored by receiving the Outstanding Community Service Award from the Washington Metropolitan Area Corporate Counsel Association (WMACCA).
Citigroup's Duarte McCarthy enthuses over her company's awards. "We're particularly proud that we were the number-three company for diversity on Diversity Inc.'s list of top companies," she conveys. "We received a 100 percent score on the Human Rights Campaign Corporate Equality Index, which rates Fortune 500 and other major companies on a scale from zero to 100 percent on seven key indicators of fair treatment to lesbian, gay, bisexual, and transgender (LGBT) employees. Year after year, we are one of the 'Top 50 Companies for Latinas' in LATINAStyle and we were also one of the top 50 companies on 'America's 50 Best Companies for Diversity' from Fortune magazine. We've received numerous recognitions and we're proud of that, but we acknowledge that this is continuous, that we need to continue to evolve and to ensure-what for me is the imperative-that if I'm an employee of Citigroup and I see that Citigroup has made this list, that should also reflect in my day-to-day experience," says Duarte McCarthy.
Duarte McCarthy sums it up: "We want to ensure that people are promoted on their merits, are treated with respect and dignity, and that around the world, we are a company for whom the best people want to work. Individuals must feel they have an opportunity to develop where positions are widely available. We want our employees to feel that their talent, who they are, and what they bring to the company is what will enable them to be successful at Citigroup. We don't want any bias or subjective opinion to be viewed as an inhibitor keeping them from being as successful as they can be. Diversity helps our work force by attracting and developing a broad range of talent, and it also gives us an opportunity to provide a broad range of services to customers and to make sure our products and services reflect our global reach."
Sodexho and Citigroup are taking positive steps to further diversity. The two companies realize that a diverse employee base is simply a better work force, and that companies with a strong diversity policy attract and retain the best employees as well as strengthen ties to their clients.
Kathleen Dreessen is a freelance writer based in Napa, Calif.
From the January/February 2006 issue of Diversity & The Bar®