Beneath The Surface

Dec. 21, 2004
Race relations isn't atop the national dialog, but it's a key issue for business.

Attend any business association conference in Washington, and you can almost predict the agenda. There'll be sessions on health care, trade, education, the environment, Y2K, legal reform, regulation, and other public-policy issues of the moment. A recent two-day business "summit" of the U.S. Chamber of Commerce was no exception. But another session -- the concluding one, no less -- of the conference was not so predictable. The topic: "Race in America." The subject was surprising because there currently is no major legislative or regulatory activity relating to the issue. Yet, for corporate America, the theme has important beneath-the-surface implications, particularly as it applies to workforce diversity. "It is one of the key issues for business," declares Leslie Hortum, Chamber senior vice president, explaining why the nation's largest business federation included the race session on its conference agenda. Also motivating the Chamber's decision is the attention given the issue by President Clinton, who has been trying to elevate it into a national dialog through his Initiative on Race. "We need to get ahead of the issue," says Hortum. "No way can we talk about the future profitability and competitiveness of American companies without talking about the workforce -- and the changing demographic makeup of that workforce." Panelists in the Chamber session agreed that U.S. companies -- particularly large ones -- are making strides in reaching out to minorities. But most firms aren't doing enough. Targeted for specific criticism were corporate hiring practices. The failure "to utilize people who are different," observed Kassie Freeman, assistant professor in Vanderbilt University's Dept. of Educational Leadership and author of a recent study on the underutilization of minorities, "robs corporations of diverse problem-solving skills. It also lowers their productivity." Similarly critical was William Bowen, president of the Andrew W. Mellon Foundation, Boston. A member of several corporate boards, he said he is "constantly struck" by how companies, in their recruiting, "look for 'credentials' rather than for specific skills and talents to match specific needs." Not only can job-specific recruiting provide greater opportunity for minorities, he pointed out, but it also can help firms cope with the skills shortage. "A lot of people can do a lot of things better than Ph.Ds." Bowen, a former president of Princeton University, also censured universities. Their "reluctance to hold students to high enough standards," he said, "is no favor to anyone." Employers especially are hurt, he indicated. Another way companies can reach out to minorities is through their procurement practices, added the star attraction of the panel, Ben Johnson, assistant to the President and director of the White House's new Office of One America. Buying more goods and services from minority contractors, he insisted to the Chamber audience, "won't lessen your quality. We're finding that out in government." Johnson also appealed to companies to invest more in "under-served communities" -- a theme of President Clinton's visit to several poverty-stricken areas in July as part of his race initiative. Working with business to reach out to minorities is a priority of his new White House Office on One America, Johnson said in a follow-up interview. The five-person office (supplemented by representatives from some 25 major federal agencies) opened in the spring to implement recommendations issued last September by the race initiative's advisory board. Johnson already has met privately with many business leaders to urge them to diversify their hiring and procurement and invest in poor areas. He is eager to bring his message to more conferences such as that staged by the U.S. Chamber. "There are progressive companies out there," he says. "Big business recognizes that if wants to compete in the marketplace, it has to engage minorities and have a diverse workforce. That's especially important as business goes global." His office is spreading word of the best practices of pacesetting companies through its Web site, Still, Johnson laments, many companies still harbor racial stereotypes. "No one is asking firms to hire the unqualified," he stresses. "There are talented Hispanics, Asians, African-Americans, and other minorities coming out of our universities. Companies owe it to themselves to find them. They just have to have the will to do it."

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