Without Hispanics, America’s Corporations Can’t Grow and Compete05/28/2015 12:00AM
By Glenn Llopis
The cultural demographic shift in the United States is about the workplace and marketplace telling us it’s becoming less about the business defining the individual and more about the individual defining the business. This is exactly what Hispanics are awakening corporations to, as they begin to recognize that young professionals entering the workforce are in search of the right career and employer who will allow them to be their most authentic selves. This equally holds true to those Hispanic professionals who have been battling the gulf between assimilation and authenticity for years – and are now ready to advance as 21st century leaders by allowing the influence of their cultural values to empower the natural ways they think, act and are motivated to perform at work.
Every 30 seconds, two non-Hispanics hit retirement age and one Hispanic turns 18 years old. According to the Selig Center for Economic Growth at the Terry School of Business at the University of Georgia, Hispanics will represent 74% of labor force growth by 2020. However, according to the Center for Hispanic Leadership, Hispanic professionals are only delivering 40% of their full potential at work. With the growing purchasing power of Hispanic consumers that is estimated to reach $1.7T by 2019 (according to the Selig Center), there is urgency to employ and advance more Hispanics into influential leadership roles – where they can help most authentically guide brands to create the most effective strategies to not only attract and develop top Hispanic talent, but capture the growing Hispanic marketplace.
Isn’t it safe to assume that if Hispanics could deliver more of their full potential, their purchasing power would also increase? So what are we waiting for? Perhaps the implications would be better understood if we realized that the combined purchasing power of U.S. Hispanics represents the 16th largest economy in the world.
The rapid growth of the U.S. Hispanic population that is at the forefront of the cultural demographic shift is requiring corporations and their leaders, across all industries, to think differently about how they can most effectively engage with Hispanic employees and consumers to drive new areas of growth. As such, there is a growing need for senior executives and all levels of leadership to be more culturally competent in an effort to awaken the full potential of the Hispanic workforce and to engage more strategically with Hispanic consumers by building deeper, more meaningful and trustworthy relationships.
Opportunity Gaps Across All Industries
Healthcare, STEM educators, financial and insurance service providers, automotive, telecommunications, real estate, media & entertainment, retail and consumer brands – all must not only be actively involved in this transformational conversation, but must properly invest to solve for the growing “opportunity gaps” they have unknowingly perpetuated. This is why Hispanics have not historically felt fully engaged in their work — and why consumers have grown tired of being sold by brands who have failed in their approach and intention to relate with and serve their unique needs influenced by their cultural values. This has become clearly evident in the manner in which most corporations have not committed to invest in long-term growth strategies to solve for the widening opportunity gaps, instead focused more on short-term compliance tactics to protect their reputations. As such, Hispanics have grown frustrated, oftentimes feeling undervalued and uncertain about their loyalty and confused about why they should commit their workplace performance and purchasing power to corporations and brands that have yet to fully commit to them in their business models. Perhaps this explains why it has become so difficult for companies to attract and retain top Hispanic talent and why Hispanic marketing efforts often deliver underwhelming results.
The bottom line is that you can’t maximize the full potential of a culturally-driven market segment that is quickly becoming the new mainstream when you still believe that they will assimilate and accept a more general market approach or total market strategy that makes half-hearted efforts to include Hispanics. These attempts by brands are simply fueling the identity crisis that Hispanics are eager to escape. Perhaps it’s time to accept that assimilation to traditional White-Anglo Protestant values has now given way to America’s new value system that is being redefined by the cultural demographic shift.
Preparing U.S. leadership for this shift requires that corporations and their brands enable the advancement of Hispanics in the workplace and marketplace. By becoming more culturally proficient, together they can authentically lead, innovate, and embrace new competitive advantages to drive growth and innovation. The key is for corporations to stop ignoring that Hispanics are creating new types of demand across every industry – and begin to gain clarity and understanding of what the shift means, before it’s too late.
This means beginning to solve for:
- Widening Opportunity Gaps: convert performance gaps into incremental revenue and new areas of sustainable growth.
- Urgent Need to Operationalize the Shift: defining strategies and solutions in support of new business models to create marketplace distinction.
- Stimulate Maximum Engagement: define the full potential of employees, brands and external partnerships to multiply outcomes and strengthen intellectual capital requirements by leading the shift.
This effort will make America’s corporations better equipped and prepared to grow and compete in the industries they serve – while equally contributing towards stimulating economic growth and global competitiveness by most effectively developing an American-bred talent pool that will create new markets, multiply current purchasing power projections and further define America’s future.
Making a Business Case for the Hispanic Opportunity
A special report by The Economist validates this argument while digging deep into the roots of just how much dependency the immediate and long-term future of America is directly linked to a Hispanic population that will represent 30% of the United States by 2050. The report, authored by David Rennie, The Economist’s Washington Bureau Chief, took three month to research and five weeks to write. It is an excellent depiction of the role and responsibility America’s politicians and business leaders must assume to elevate the human capital potential of U.S. Hispanics if economic growth and global competitiveness is to abound. Equally, leaders must not only begin to pay closer attention to the data and analytics, but must learn to translate what the numbers and trends really mean to change behavior and attitudes to drive sustainable results – based on the understanding that cultural values influence Hispanics to engage in unique and different ways.
Rather than build bridges to advance the Hispanic population – to make them a stronger force and hold them more accountable, so that Hispanics can contribute to American society for the betterment of their families and the nation at large – politicians and business leaders are creating barriers to advancement that is weakening this juggernaut of a population. Consequently, this is making it more difficult for America’s corporations and the U.S. economy to grow and prosper.
In my recent conversation with David Rennie, I asked him: “Are politicians making it difficult for Hispanics to advance in America?” He answered, “Yes. It is true of both the right and the left.” Perhaps it’s time to change the conversation and include the voices of emerging and influential Hispanic leaders (and non-Hispanic leaders) that can objectively provide clarity and understanding of the real issues at hand. Without these voices, the narrative will never change.
As you read The Economist report, it becomes quite clear that this is not a one-sided story with a one-sided solution. It sends an unwritten message to U.S. Hispanics that they must equally become more accountable to discover and unleash their full potential – whether there are bridges or barriers to advancement. Hispanics must realize that they can’t wait for anyone but themselves to solve their own challenges (i.e., education, jobs, etc.).
In other words, Hispanics must begin to lead and start to collectively lift each other up – rather than pull each other down, which only creates more barriers to our advancement. Our diverse community must lead together to actively integrate into the fabric of American society if we are to earn the trust of corporate and government leaders. At the same time, corporate and government leaders must awaken to the realization that the longer they ignore or wait to engage with and invest in Hispanics, the more they are putting their businesses and the economy at risk.
When discussing this issue with Mr. Rennie, he eloquently and enthusiastically stated, “Hispanics represent the backbone of the working class and they will soon need to be a key part of America’s middle class. Hispanics must become America’s future physicians, lawyers, professors. We must start taking action to replace the white middle-class population that is becoming older with a Hispanic population that is making America much younger.”
Changing the Conversation (It’s No Longer About Immigration)
The report states that 1 in 4 public school children are Hispanic and that 5 out of 6 U.S. Hispanics are legal citizens. In other words, the immigration conversation has become outdated. Given the current state of America’s economy and global competitiveness, which continues to lose ground, it’s time for business and government leaders to create a legitimate platform that will allow Hispanics to play a more integrated role in the reinvention of America. As Mr. Rennie stated, “Politicians are right that a demographic revolution is under way. But their panic about immigration and the national interest is misguided. America needs its Latinos. To prosper, it must not exclude them, but help them realize their potential.”
This is a challenge that most corporations across all industries are being faced with: how to build the talent pipeline and develop the next generation of corporate leaders, physicians, highly skilled labor, etc. that not only represents the new marketplace, but will influence how the marketplace is served in order to create new areas for growth and innovation. In particular, the healthcare and biomedical fields are experiencing a desperate need to close the Hispanic talent gap, as it puts more patients at risk and causes higher costs of care for medical institutions.
For example, only 5% of physicians in the United States are Hispanic, yet more Hispanics are insured than ever before (as a result of the Affordable Care Act). This creates a healthcare delivery gap that can make it difficult to educate Hispanic patients about preventive care and overall management of their lifestyles. This is cause for concern when you consider that Hispanics are becoming more susceptible to chronic diseases, such as diabetes, obesity and cancer, and face barriers to access to genetic testing, research, new treatments and cures.
According to Stephanie Neuvirth, Chief Human Resources and Diversity Officer at City of Hope, a leading Cancer Institute located 25 miles east of Los Angeles in Duarte, CA (with a patient service area that is 46% Hispanic), “As advances in medicine evolve at an unprecedented pace, this is a critical time to invest in preparing the next generation of health care and biomedical professionals, in particular with the Hispanic population. There is a vital need to build a pipeline of Hispanic healthcare and biomedical workers to meet the unique needs of the rapidly growing patient population. To make sustainable change, we must engage parents, teachers, employers, community influencers and all other stakeholders in the STEM conversation to achieve real solutions – not just talk about them. At City of Hope, we are looking strategically at how we can quickly solve for workforce pipeline issues by initiating conversations on how we invest in, develop and introduce our youth to possible careers in healthcare, beginning as early as 2nd grade and we are inviting our school district and local colleges to join us in this conversation to collaborate in programs such as the T.E.A.C.H. Project to maximize our efforts. Current diverse healthcare and biomedical workers are being asked to sponsor interns, be role models and mentors.”
These same types of challenges that impact an organization’s and an industry’s ability to grow and compete also exist in the insurance and financial services sectors. For example, many Hispanics hold misconceptions about insurance that intensifies their natural skepticism. Nearly half (49%) don’t know what type of policy to buy or how much coverage they might need, and even if they did, a full 75% believe insurance is too expensive.
As such, the Hispanic community suffers disproportionately because of lagging insurance coverage, which contributes to their health disparities and mounting medical bills. Even so, learning about insurance can cause high levels of anxiety in the Hispanic community, especially among those without coverage, who delay buying insurance because of perceived costs, the need for more knowledge about insurance coverage options, or simple procrastination. On top of this, insurance is not mandatory or necessarily needed in most Latin American countries, so its important role in U.S. society is not widely understood across the Hispanic population.
According to Nielsen, 15 million Upscale Hispanics (nearly 26%), earning between $55K and $90K a year, are investing more in Retirement/Pension Funds (43%), Children’s College Funds (24%) and Life Insurance/Annuities (23%). Nielsen estimates that by 2050, there will be 35 million Upscale Hispanics. The question remains: Will the insurance and financial sectors be prepared to serve them?
According to Juli McNeely, LUTCF, CFP, CLU, President of the National Association of Insurance and Financial Advisors (NAIFA): “Our sponsored Advisor 2020 report details how the rapid population growth in immigrant communities, especially Hispanics, is transforming the U.S. into a minority-majority country. Now, more than ever, NAIFA must help its members and the insurance and financial services industries that we serve enhance their skills, knowledge and networks to tap into and serve these growing markets, in particular the Hispanic market. Our goal is to prepare our members for 2020 and beyond.”
The American Dream Lives Within the Hispanic Community
As more Hispanics pursue the American dream, the demand for homeownership is on the rise. Between now and 2020, Hispanics will account for 50% of new buyers. According to the 2013 State of Hispanic Homeownership report, the total number of owner households in the U.S. grew from 69.2 million in 2000 to 74.7 million in 2013, an increase of 5.5 million. During that same period of time, Hispanics accounted for an increase of 2.6 million owner households, or nearly half (47%) of all homeownership growth in the country.
Patty Arvielo, President and Co-Founder of New American Funding, an FHA Direct Endorsement (DE) and Government-Approved national mortgage banker, says that, “Though Hispanics are expected to account for 50% of new homebuyers in the coming years, according to the National Association of Hispanic Real Estate Professionals, the industry is not anywhere near prepared for this demand. Companies looking to increase their Hispanic market share need to have relevant products and a diverse workforce and possess knowledge of the cultural and language nuances that are common among Hispanic homebuyers. For example, Hispanic millennials – who New American Funding has branded as #hispennials! – are an enormous growth opportunity for our industry, but you won’t reach them the same way you do other homebuyers, because they want to communicate via social media and other online mediums.”
As corporate leaders wrap their arms around these issues, they must not succumb to an “us versus them” mentality, a scenario that only produces a zero sum game. This is about the integration of a new America, about the melting pot giving way to a cultural mosaic, and being open-minded enough to seize the opportunities that diversity in thought can bring to the reinvention of a nation. The rapidly growing Hispanic population is about natural evolution and as leaders we must see through a fresh lens that not only embraces areas of like-mindedness but recognizes how unique differences in people can propel new ways of thinking to drive growth and enable competitive advantages.
Otherwise, what happens to a country when 30% of its population is performing at only 40% of its full potential? I believe we all know the answer as we begin to understand the urgency for leadership to prepare itself for the cultural demographic shift. As Mr. Rennie boldly stated during our conversation, “This is not reversible. Hispanics are not going away. The demographic revolution is alive and vibrant.”
Even so, critical questions remain: When are corporations going to awaken to the full potential of the Hispanic opportunity, before it’s too late? How can they begin to embrace this New Normal to grow and compete? Who will emerge as the bold and courageous leaders to change the narrative that has held back growth, innovation and new opportunities? This is all about change management and those who commit to change rightly by viewing the cultural demographic shift as a platform for growth will not only win the war for Hispanic talent, but will earn the right to dominate the marketplace as they take the lead to strengthen America’s economy and global competitiveness.
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