If an Analysis. is this?
Aetna was founded in 1853 in Hartford, Connecticut. It is one of the leading providers of health care services from medical, dental, pharmacy, group life, and disability insurance, to employee benefits throughout the United States. Aetna provides traditional and consumer directed health care products and services that include long-term care and Medicaid ‘medical management’ capabilities. Aetna covers over 30 million members nationwide (3). It has expanded around the globe with newest offices in Dubai and China.
As a member of the global community, providing Aetna Global Benefits to expatriates and global employers, it has adapted and embraced diversity in all aspects of its business. In 1962 when Aetna reached 16,000th employee, two-third of them were consisted of women. Aetna has been steadily growing – from market capital of just over $750,000 in 1878 to reported revenue of over $31 billion in 2009. It is a member of the Fortune 100 with over 30,000 employees and 18 million medical, 13 million dental and 8 million pharmacy members (1).
Aetna supports many communities and charitable and non-profit organizations around the country. Their focus on “corporate responsibility” (2) is apparent with their involvement and long tradition of giving. To further the cause, Aetna Foundation, a national health foundation that promotes wellness, health, and access to high-quality health care for everyone was established in 1972. Since then it has contributed over $394 million in grants and sponsorships to non-profit organizations for variety of health and education related issues. For example, In New York City, a $70,000 award to the Museum for African Art was given to support “Active Body, Active Mind” targeting senior citizens (4).
The diverse population growth in the U.S. in general and Phoenix metropolitan in particular has created many issues in management and integration for many organizations. They are increasingly faced with multiple challenges that they have to face every day. In 2008 “minorities” were roughly one-third of the U.S. population and by 2042 they will be the majority (Table1). This growing and diverse workforce presents challenging problems to small and large organizations alike including Aetna. The socio-economic and population expansion has greatly changed our society. From a majority homogeneous group, the faces of customers, clients, suppliers, employees and managers have been transforming into a dynamic mix of diverse people with various races, cultures and backgrounds. A predominantly ‘white’ and male organization does not represent the population and fails to reflect diversity in our society.
As a publicly traded organization, Aetna plays a significant role in acquiring and retaining top talent to keep up with the demanding and diverse consumers they serve. It is a difficult task to recruit, train and maintain a workforce that is reflective of society. As a health care provider in a diverse country, the business and its growth will depend on the ability to maintain and accommodate diversity within the organization. By 2050 two third of the U.S. population will consist of minorities (3). But minorities are still under-represented in Aetna’s management and leadership positions. Even though the company has placed many diversity programs over the years to integrate and provide opportunities to minorities, medium to high-level management and leadership jobs seems the exception to the rule – 40 percent of Aetna’s 2010 hires were people of color but only 16 percent of has made it to the management/supervisory positions (4). Many factors play direct and indirect role in creating a diverse workforce and culture. There isn’t a magic bullet for diversity. Most organizations have ‘diversity programs’ in place. They have special and mandatory training courses that each employee must take annually. But they fail to create a culture that embraces diversity. The under representation of minorities are often explained away by ‘we have diverse workforce’. Some companies meet the minimum requirements of the law and call it a diversity training program achieved (5).
There are also other restrictions both on the company and the potential employee’s parts that creates challenges in achieving diversity. Despite many laws, regulations including EEOC, Affirmative Action, Title IV of Civil Rights Act to protect employees from discrimination, the number of complaints against companies have skyrocketed in 2011 (16).
Diversity in a company is not something that happens automatically. Regardless of how diverse the population and society has become, most companies still struggle with diversity. Organizations play a major role in under representation of minorities. First, there is bias. Bias from the organization. Bias from the hiring managers. Secondly, according to Richard Ingersoll, a Penn State professor of education, “There’s been a victory for recruitment but not a victory for retention,” (6), and “corporations are losing women and minority professionals and managers at rates higher than they’re losing whites” as a result of direct and indirect discrimination within the organization (7).
To become a more diverse company, a new approach that measures both quantitative and qualitative aspects of the diversity at needs to be taken into consideration. A quantitative (numerical) study will measure whether Aetna has a diverse management in which minorities, women, gays and lesbians are proportionally represented across the board. A qualitative (experimental) study will measure which members of these groups are proportionally represented in different positions including top leadership throughout Aetna. To be effective in diversity management, everyone in the company from management and leadership to the custodian specialist must be involved. The organization’s culture must be ‘diversity’ attuned to attract the best and the brightest from a diverse culture and society. The management must be inter-culturally knowledgeable and new recruits should be judged and hired based on their qualities – not on the basis of gender, race, sexual orientation, etc., etc.
When the organization’s culture, plans, vision and goals are written and implemented toward attracting a diverse labor force. In an inclusive organization employees and constituents’ satisfaction will increase and contribute directly to company’s growth. All employees including management and leadership will consist of all different groups equally. They will work toward companies’ goals that benefits both the company and employees. Happy employees not remain with a successful but also contribute to the growth of the company.
To achieve the level of success, the focus on the following area for diversity and inclusion must be discussed among top leadership at Aetna.
• Management and Leadership – perception
• Existing Policies and Strategy
To gather more insight into public perception (publicly traded company) and Aetna commitment to diversity, the following were taken into consideration:
• Focus Group QandA and feedback sessions – I sat down couple of times with two young folks to discuss Aetna’s (management) perceptions
• An analysis of existing strategies and suggestions to improve diversity in management and leadership positions
Management and Leadership
From leadership’s point of view, diversity simply makes sense. Diversity directly contributes to the bottom line and growth of the company. Aetna has been growing steadily over the years. According to reports, “diversity in the workforce are more profitable” (9) especially in the U.S. Aetna has embraced diversity from policy to implementation and has been successful thus far.
To measure how general public thought about diversity at Aetna, two focus group sessions were conducted. The involved parties were assured of their anonymity. The opinion of the focus group regarding management’s involvement and commitment was not positive. Insurance industry has had a black eye “Let’s face it, the insurance industry—in general—is not perceived to be an exciting place to work by college students and people seeking a career change.” Frank Heaps the managing director for Innovation in Insurance (15).
It was focus group’s perception that management lacked the necessary interest in diversity and cultural understanding to embrace recruiting young talent from diverse pool of graduates. “There won’t be an effort on their part” was an answer to “How much do you think the management is involved?” The management and leadership must demonstrate its involvement and commitment to diversity and inclusiveness. Their involvement and support for a culture of inclusive and diverse is curtail to the growth and success of the company.
When ask any final thoughts, “Over all the management probably don’t have the necessary interest in diversity” said the focus group “to be good at recruiting young and diverse candidates.” Aetna’s mission, values, and vision are to create an inclusive and dynamic culture. Top leadership must increase their level of sponsorship and support to group initiatives that promote team building exercises among inter-departmental staff. “Do you think managers have any knowledge to understand and manage young recruits?” was overwhelmingly “No”, Leadership is not prepared for to accept necessary changes to have an impact (10).
Policies and Strategy
Diversity is not about increasing visible differences (sex, age, color, etc) in the workforce but rather a strategic advantage that can be achieved from incorporating a variety of approaches and perspectives. Although Aetna has made great strides toward inclusion, management and leadership positions are lacking minorities. An effort must be made to recruit and/or promote management and leadership positions from the existing diverse pool of candidates within Aetna.
The diversity and inclusion programs embraced by Aetna are having great impact, but most are lower level positions. The same amount of effort must be directed at top positions as well. 76 percent of employees are from diverse groups, but only 16 percent of them are in management and supervisory positions and 15 percent in the top leadership positions. Effort and full leadership involvement toward new strategies on how to promote and recruit from ranks and file of employees must get underway. “A richly diverse America does not await us. It is upon us. It is our present and our future,” Susan Hockfield, MIT President said. Aetna’s core values are based on diversity and inclusive employees. “We cannot permit MIT to be a community of the past.” Philip Harlow, chief diversity and labor relations officer at Xerox. That statement is true for any company that wants to compete in 21st century marketplace. “There is no magic formula” for creating diverse workforce he concluded. Many companies struggle with diversity. They are missing one critical ingredient: strong leadership from the top (13).
“Our company’s evolution as a leader in diversity reflects profound changes in the marketplace. We actively engage the diversity of our employees to better understand the communities we serve.” Mark T. Bertolini, CEO. For example, people of color hold 16 percent of management and supervisory positions. The impact of diversity in all aspects of business is evident at Aetna. It’s relationships with the workforce, customers, suppliers, clients, constituents, and networks of health care professionals that involve many people from all walks of life is immaculate. At Aetna diversity is any mixture of differences and similarities in job function, life experience, discipline, education, socio-economic background, marital status, personality, gender, age, language, ethnicity, culture, sexual orientation, religion, family, etc.
According to its values “Aetna will be the industry leader in the diverse marketplace.” Aetna promises to deliver best-in-class service to its customers because they are part of the society. They must feel comfortable and welcomed when doing business with Aetna. Some of the strategies currently in place:
• Create innovative and tailored products and service solutions that will meet the unique needs of our constituents
• Develop a diverse supplier base reflecting our multi-cultural workforce environment that supports innovative ways to deliver best-in-class services
• Build a workforce that are knowledgeable and fully understands the diverse communities where we do business
• Foster a culture of inclusion that grows a diverse talent pool and recognizes and rewards the contributions of every employee while allowing employees to do their best work
Existing policies and procedure may need to be modified to include new protected groups. The development and implementation of ‘diversity’ policies and procedures should include providing employees and constituents with an environment that is dynamic, fair, friendly and professional. Impartiality principles are a core element of the planning, recruitment, interview, and selection process for hiring best talent to meet business needs and compete in one of the most challenging industries (4). The organization has an effective diversity strategy in place to grow and recruit talented potential employees that reflect the diversities in our society. Looking at Aetna’s workforce by numbers (below), the organization has had an effective strategy to hire and retain diverse workforce that include women, veterans, people of color from all generations (11).
Gender
• 76 percent of Aetna’s employees are women
• Women hold 62 percent of management/supervisory positions
• Women hold 26 percent of senior leadership positions
• 31 percent of Aetna’s board directors are women
Race and ethnicity
• 31 percent of our employees are people of color
• People of color hold 16 percent of management/supervisory positions
• People of color hold 15 percent of senior leadership positions
• 23 percent of Aetna’s board of directors are people of color
• 40 percent of 2010 hires were people of color
Age/Generations
• Employees range in age from 18 to 85
• The average age of our employees is 44
• 1 percent of Aetna’s employees are in the Silent generation
(born between 1925 and 1945)
• 38 percent of Aetna’s employees are Baby Boomers
(born between 1946 and 1963)
• 46 percent of Aetna’s employees are in Generation X
(born between 1964 and 1978)
• 15 percent of Aetna’s employees are in Generation Y
(born between 1979 and 1994)
“The challenge of continually increasing our value to customers, shareholders and communities requires creativity and insights that only a diverse workforce can deliver” Mark B. ‘2010 Diversity Annual’ report, says that (12). The report emphasizes three aspects of programs that Aetna has implemented. Embraced. Empowered. Engaged.
Embraced: Aetna understands that when people join together to create change and innovate, their deepest insights emerge from both common and uncommon ground. Their greatest contributions arise from the way they live their lives, where they come from, what they treasure, and what they understand about our world.
Empowered: People are empowered to share their unique perspectives in a many ways to make Aetna more successful and a better place to work. They are encouraged to extend their momentum beyond Aetna’s walls – to nurture a greater understanding of diversity and its benefits in our communities and across the nation.
Engaged: Aetna is engaged in making diversity an integral part of the business. Diversity influences the way the company works with customers and business partners. It helps Aetna to identify and serve new markets.
Given Aetna’s history in successful integration of minorities in their workforce, they are ready to meet diversity challenges. Companies that have workforce that reflect the society proportionally will succeed in 21st century and beyond. They will continue to succeed in creating and implementing strategies that give equal opportunity to everyone regardless of who they are. A diverse society is made of people from all walks of life – from baby boomers to the Gen Ys and Aetna has been able to adapt and meet the challenges.
The following recommendations must be taken into consideration for dynamic new diversity strategies:
1. Identify various populations of employees in at Aetna.
2. Survey and study what each population/group needs to feel comfortable and included at work – a sense of what helps employees work together effectively and efficiently adds to employee morale.
3. Create a top-level committee who reports and discusses their findings to brainstorm new strategies for promoting diversity in the top leadership and management positions – as opposed to appointing members.
4. Establish a clear equal-opportunities policy and procedure for management recruitment and promotion – making sure it falls within the guidelines of Equal Employment Opportunities and related laws and regulations.
5. Re-establish hiring practices and policies that select the best candidates for the management positions without considering age, race or ethnicity, etc.
6. Promote and provide diversity training for all employees – especially the hiring managers.
7. Acknowledge that prejudice / discrimination will continue to exist at Aetna.
8. Set clear consequences for discrimination against anyone at Aetna and communicate and remind employees through intra-net, email and other established communication means.
References
1. http://www.aetna.com/about-aetna-insurance/aetna-corporate-profile/facts.html
2. http://www.aetna.com/about-aetna-insurance/aetna-corporate-profile/diversity/index.html
3. http://2010.census.gov/2010census/data/
4. http://www.aetna.com/about-aetna-insurance/aetna-corporate-profile/corporate-bios/index.html
5. http://www.psc.gov.sk.ca/Default.aspx?DN=078f3edd-e80b-4a26-9ada-819f91671c53
6. http://www.miller-mccune.com/education/minority-teachers-hard-to-get-and-hard-to-keep-25852/
7. http://knowwpcarey.com/article.cfm?aid=649
8. http://www.chubb.com/diversity/chubb4450.html
9. http://www.villagelife.org/news/archives/diversity.html
10. Focus group QandA and Feedback Sessions held on 2/1/2012 and 2/8/2012
11. http://www.aetna.com/about-aetna-insurance/aetna-corporate-profile/diversity/workforce-workplace.html
12. http://www.aetna.com/diversityannualreport/index.html
13. http://web.mit.edu/newsoffice/2008/diversity-congress-tt1119.html
14. http://www.thomaslfriedman.com/bookshelf/the-world-is-flat
15. http://www.insurancenetworking.com/blogs/insurance_technology_employment_recruiting_labor_health_care-25406-1.html
16. http://www.eeoc.gov/eeoc/statistics/reports/index.cfm