Embracing Diversity and Inclusion As a Business Imperative
By the year 2050, the U.S. Census Bureau projects that minorities in this country will become the majority. Amidst such vast demographic change, how can businesses stay relevant – plugged in to their communities and tuned in to the needs of customers and clients? By embracing diversity and inclusion as a business imperative.
From a racial, ethnic, and gender perspective, the American workforce is already more diverse than ever before. A generation ago, private-sector minority employment stood at 11 percent and women represented just one third of the workforce. Today, 34 percent of private-sector employees are minority and half of all workers in the U.S. are women. That's progress, but the business case for diversity and inclusion must be considered in broader terms than just demographics alone, for diversity of thought and experience can also lead to greater innovation, increased employee engagement and retention, and better customer relationships.
At Freddie Mac, we recognize that having a diverse workforce is essential to our business and our mission. We strongly believe that having a diverse range of experiences, backgrounds, and perspectives within our employee base and among our business partners will help us more effectively understand and serve the end consumer and our communities.
This approach has served us particularly well during the ongoing housing and economic crisis. For example, minority communities have been hit hard during the downturn, and are facing foreclosure at disproportionate rates compared to the non-minority population. According to the Center for Responsible Lending, 17 percent of Hispanic homeowners and 11 percent of African American homeowners have already lost their homes to foreclosure or are at imminent risk of doing so. For non-Hispanic white borrowers, the corresponding figure is 7 percent. With regard to actual foreclosures, the data shows that African American and Latino borrowers are nearly twice as likely to have already lost their homes.
Strong relationships with minority and community organizations across the cultural spectrum have better equipped Freddie Mac to help minority families navigate the housing crisis. For example, we partner with a wide range of nonprofits, counseling agencies, and housing organizations to provide foreclosure prevention information and assistance to borrowers. Borrowers view our partners as trusted intermediaries precisely because of their experience and connections within minority communities.
Foreclosure rates remain too high across the board, but our focus on diversity is clearly giving us additional opportunities to keep families – and particularly minority families and individuals hardest hit by this crisis – in their homes. Since the beginning of 2009, we've helped nearly 370,000 borrowers avoid foreclosure.
Even as we've focused on helping families through the crisis, Freddie Mac has made real strides in building a more diverse and inclusive workforce. Today, half our workforce is female and 44 percent is minority. And last year, minorities made up more than a third of the total new hires.
Those are real accomplishments, but I want us to embed diversity and inclusion – beyond race, gender, age, and ethnicity to include diversity of thought and perspective – more deeply into Freddie Mac's culture and business practices. Therefore, I've directed the company to focus specifically on this area to accelerate our progress. And that's exactly what we're doing.
- Diversity and Inclusion Division. We created an Office of Diversity & Inclusion over the summer and hired Chief Diversity Officer (CDO) Subha Barry to lead it. Subha is a respected leader in the field, having served as managing director, global head of Diversity & Inclusion for Merrill Lynch & Co., Inc. She serves on Freddie Mac's management committee and oversees the combined functions of Diversity and Inclusion and Supplier Diversity.
- Executive Diversity Council. We've established an Executive Diversity Council, jointly led by me and our new CDO, to ensure that we have a proper balance of unique perspectives and ideas within our officer and senior director ranks.
- Supplier Diversity. In 2009, Freddie Mac generated nearly $421 million in contracts with minority- and women-owned businesses, which represented 26 percent of our total outsourced spending. We also launched a Supplier Diversity Action Council last August that works to better integrate diversity and inclusion into contracting practices across all our business areas.
- Employee Network Groups. Seven employee network groups offer opportunities for professional development as well as an open and inclusive environment for networking and sharing different experiences, backgrounds, and unique perspectives. These groups also support our core work by helping the business areas better understand and reach diverse communities. More than 25 percent of our employees have joined these groups, which are open to all employees, and many more participate in network-sponsored events throughout the year.
- "Employer of Choice" awards. Our diversity and inclusion efforts have consistently earned us recognition as an "employer of choice" and "best place to work" by prominent diversity and inclusion-focused publications and organizations such as Working Mother Magazine, Hispanic Business Magazine, Black Enterprise Magazine and the Human Rights Campaign Foundation's Best Places to Work for LGBT Equality. Our progress in this area was also featured in a recent article in Profiles in Diversity.
- Borrower outreach and education. Through Freddie Mac's borrower outreach, homebuyer education, and financial literacy programs, we continue to partner with a diverse range of organizations committed to helping families buy or rent affordable homes.
- REO business. Freddie Mac encourages first-time homebuyers and owner-occupants to purchase our Real-Estate Owned (REO) properties. These are quality, affordable homes that we make available to all eligible families, including underserved and minority borrowers. We also work closely with industry groups representing Asian, Hispanic, and African American real estate professionals to identify minority listing brokers who understand the needs of the communities they serve. Women and minority owned businesses represent 43 percent of our listing brokers nationwide.
While we are proud of these achievements, we consider them stepping-stones on the path toward an even more diverse and inclusive Freddie Mac – a welcoming place for employees, a business partner that effectively serves our communities, and a company committed to serving its vital housing mission on behalf of all Americans.
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