Guidance for Diversity in Airport Business Contracting and Workforce Programs (2020)

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17 Increasing workforce diversity and participation of diverse busi- nesses in contracting at airports can result in significant benefits to airports, the employees and businesses working with the airport, and the larger community. Benefits to airports from contracting with diverse businesses and employing a diverse workforce include enriched skill sets and perspectives from having a broader selection of staff to choose from and thus a broader talent pool; a larger pool of available business partners leading to a more competitive and efficient business environment; and improved reputation internally, locally, and nation- ally. Airports with a diverse workforce and ample contracting opportu- nities for diverse businesses can support the surrounding community through increased economic activity and employment, particularly for those from underrepresented backgrounds. These practices can present an opportunity to provide individuals from disadvantaged backgrounds with more income mobility and an increase in local and state government revenue generated from a higher tax base. This chapter provides an overview of the benefits of business and workforce diversity to the airport and surrounding community and identifies the social benefits, labor market and workforce benefits, and challenges associated with quantifying benefits. Chapter 4 describes the specific economic and social benefits associated with diverse business participation in airport contracting. Chapter 5 describes the potential economic, socioeconomic, and community benefits of increased workforce diversity. Benefits of Diversity to the Airport Diverse, Creative, and Innovative Workforce Significant value can be derived from increasing the diversity of an airport’s staff and work- force. A wider representation of viewpoints, backgrounds, experiences, and skill sets enhances the work environment. For example, the addition of new perspectives and voices among staff can lead to a more inclusive, open, and collaborative atmosphere. Elena Anaya, the community and citizenship director for Turner Construction in Northern California, noted in an interview that one intangible benefit of diversity is the unique perspectives that individuals bring to the work- place. Diversity within the workplace has been connected to employee satisfaction and creating a stronger bottom line (Aramovich and Chrobot-Mason 2013). A more diverse workforce in all stratifications of airport employment will lead airports to greater levels of support for initiatives related to workforce and contracting diversity. With colleagues and supervisors representing a C H A P T E R 3 Benefits of Business and Workforce Diversity A Wealth of Value This Guidebook examines the topic of workforce and contracting diversity as a value proposition for airports and their communities. Compliance with laws and regulations pertaining to diversity is critically important for airports to secure necessary federal funding. However, beyond compliance, diversity can bring a wealth of value and benefits that are detailed in this chapter and throughout the Guidebook.

18 Guidance for Diversity in Airport Business Contracting and Workforce Programs variety of backgrounds, a diverse workforce will help to break down stereotypes and reinforce a collective team mentality (Naff and Thompson 2000). Drawing from a more diverse pool of people can also increase the qualifications of the work- force as a whole. By widening the set of candidates for any given position, airports are more likely to identify the most qualified and cost-effective candidate (Burns and Kerby 2012). Workplaces that value inclusivity and openness can also result in a more satisfying employee experience and more content staff. A positive workplace environment will increase staff tenure and ensure a lower turnover rate and absenteeism rate of employees (Figure 1). Investing in a diverse workforce that works to eliminate discrimination will help airports reduce turnover, which improves stability and can reduce short- and long-term costs (Burns and Kerby 2012). In contrast, work environments that do not foster inclusivity are more likely to result in higher employee turnover due to decreased job satisfaction among employees (Mor Barak 2017). A more diverse work environment can drive staff to have discussions related to creating a culture of inclusivity. James Wilson of Delaware North Companies, Inc., noted in an inter- view for this research that it is important to create a work environment where staff members feel comfortable discussing diversity; otherwise, they may not notice issues as they arise. These types of discussions can contribute to a more open-minded workplace that encourages further growth in diversity. Airports may hold open forums on the importance of diversity or sponsor employee trainings on nondiscrimination or intercultural communication. Airports that create a culture of inclusivity and that encourage staff to discuss diversity may find a benefit in having a more tolerant workplace overall because employees are more willing to understand and embrace each other’s differences. A diverse airport staff can bring fresh perspective and innovative ideas and approaches (Aramovich and Chrobot-Mason 2013). More innovation can lead to increased productivity and efficiency in projects, which can lower costs for contracts, lead to creative products, and ensure successful work (Aramovich and Chrobot-Mason 2013). For airports that seek a high Positive Workplace Environment Lower staff turnover Increased staff tenure Improved stability More content staff Figure 1. A positive workplace environment has several benefits.

Benefits of Business and Workforce Diversity 19 level of innovation and creativity, a diverse workforce and supportive work culture can help them achieve a competitive advantage (Konrad, Prasad, and Pringle 2006). Maximizing diversity at an airport, through the contracting or employment of a more demographically representative population, can increase productivity and lead to economic benefits for the airport (Aramovich and Chrobot-Mason 2013). Research shows that produc- tivity and overall job satisfaction are improved when employees perceive that they are empow- ered, and they experience less stress overall on the job (Aramovich and Chrobot-Mason 2013). Increased Pool of Contractors When airports cast a wider net for contractors for their projects, they may increase their ability to find the right contractor for the job. In this context, a diversity program can provide a direct benefit to airports because it increases the pool of contractors and gives the airports more options and choices. By expanding the pool of contractors, the airport can increase the level of competition for their awards. This increase in competition can provide the airport with several advantages, including those listed in Table 1. The ways in which the increase in competition changes the local market can be hard to predict. The state of the market, local conditions, the specific requirements of the airport, and other factors will affect how the market responds. While difficult to measure, the potential benefit for airports can be substantial. Talent Development Providing skills training and learning opportunities for staff can help employees from a variety of backgrounds remain successful in their positions. To seize on this opportunity, Marivic Bamba, the public and community affairs director for Clark Construction in the Western region, suggested in an interview that life skills training and a focus on workforce retention are critical for main- taining a diverse workforce. This type of training can support an airport’s effort to increase the diversity of its workforce if it creates opportunities for staff to develop and grow; the workplace then becomes more accessible to a wider range of people. Airports can also provide support for grooming members of the internal workforce to take on more responsibility and rise to senior roles. In addition to developing talent within its internal workforce, airports may enhance the skills of its diverse contractors through offerings of technical assistance and information sessions. A more talented, qualified contracting pool will be an immediate benefit to the airport in the short term and will grow in value over the long term. By investing in talent development, airports can create a sustainable long-term workforce from the diverse groups they attract and build a qualified pool of diverse contractors. This helps the airports take advantage of the benefits such as increased innovation, diverse perspectives, and increased productivity. Lower overall cost of contracts Improved quality of work completed under the contracts New and innovative approaches and products Table 1. Advantages of increased competition among contractors.

20 Guidance for Diversity in Airport Business Contracting and Workforce Programs Improved Reputation, Awards, and Recognition As described in Chapters 4 and 5, airports can achieve and exceed their diversity participation goals by implementing best practices to increase workforce and contracting diversity. Airports that lead the industry on diversity can improve their own visibility among peers, trade groups, and the community, which might result in greater passenger traffic, more publicity, and in turn, more revenue. Reputation of the airport and affiliated careers will be more likely to improve through increased public awareness and knowledge. Having a strong, positive reputation is important for airports as they frequently coordinate and collaborate with their local communities and require community buy-in for major initia- tives. Many factors contribute to being recognized as a good neighbor by the local commu- nity, and successfully implementing diversity programs can play a role. By maintaining robust engagement with the diverse business community and members of the community with histori- cally disadvantaged backgrounds, as well as demonstrating a consistent commitment to diver- sity, airports can build trust and enhance their reputation. By being proactive and demonstrating results of diversity initiatives over time, airports can strengthen relationships with their local communities, which can result in greater partnership and support from the communities when the airports embark upon new initiatives. Investing in workforce and contracting diversity may increase visibility and earn airports awards. For example, Columbia Metropolitan Airport won the 2015 ACI–NA Inclusion Champion Award, a feat accomplished by dedicating its employment practices to demonstrating inclusion and diversity. Such accolades can improve the airport’s reputation within the community and industry, resulting in several additional benefits. Airports that win awards for their diversity efforts are better able to recruit highly qualified candidates. Improved public opinion and reputation of airports with diverse workforces can allow them to attract a wider pool of talent and will assist them in recruiting efforts (Mor Barak 2017). Additionally, minority candidates and women as well as owners of DBEs and WBEs are more likely to want to work for organizations that have a demonstrated track record of priori- tizing diversity. Airports that receive these awards may also be invited to take part in forums and associations that highlight their achievements further and increase their visibility. Satisfy Federal, State, Local Policies/Requirements In many cases, airports must meet local, state, or federal diversity requirements to be eligible for grants and other funding sources. For example, “Part 26 Participation by Disadvantaged Business Enterprises in Department of Transportation Financial Assistance Programs” relates that recipients of FAA financial assistance must comply with DBE requirements and work to achieve diverse business participation goals outlined by the regulations (Office of the Federal Register 2019). Properly structured diversity programs can help airports maintain critical funding or revenue and avoid legal penalties or challenges. Making a good faith effort to eliminate barriers to equal employment opportunities is an obligation of employers (American Association for Access, Equity and Diversity n.d.). Like all workplaces, airports are expected to comply with legal obligations to ensure equal opportunity to all members of the public and comply with nondiscrimination laws such as the Civil Rights Act of 1964 (U.S. Equal Employment Opportunity Commission 2009). See Chapter 2 for a discussion of the legal and regulatory landscape for diverse contracting and building a diverse workforce. Most airports are public-sector entities and should strive to reflect the diversity of the communities in which they operate and serve.

Benefits of Business and Workforce Diversity 21 Benefits of Airport Workforce and Contracting Diversity to the Community Labor Market, Workforce, and Job Creation Airports are a hub of economic activity with a wide range of job levels, positions, and career fields, requiring varying skill sets depending on the career path. While it is often useful to count these jobs as a cost to the airport because they use resources, the jobs they create are beneficial to the community. Job creation is an indicator that the airport is successfully generating revenue and is a benefit to the community in the form of employment opportunities and a source of income. As airports grow and expand, they will need to hire more employees and businesses beyond replacement levels. Airport facilities require regular maintenance, landscaping, upkeep, and cleaning services, in addition to frequent construction projects. These needs are further exacer- bated by increases in travel volume. Increased travel will also raise demand for retail stores and food and beverage services in terminals and other airport spaces. To respond to these demands, airports and their contractors and concessionaires will need to seek more staff support. Income and Wealth Contract wins increase revenue for businesses, which in turn can provide income for owners and employees. When contracts are awarded to businesses owned and staffed by women and minorities, those groups’ incomes can increase, resulting in enhanced economic stability and mobility. Additionally, when airports have more variety in their food, beverage, and retail conces- sions, those businesses may attract new customers and therefore increase the amount of revenue for themselves and the airport. Increased revenue opportunities for these busi- nesses can allow them to achieve greater economies of scale and operate more efficiently (Econsult Solutions, Inc. 2017). This in turn benefits the airport by providing it with a greater revenue base. Many economic studies have shown a significant racial gap in wealth and income in the United States (Shambaugh, Nunn, and Anderson 2019). This gap has been exacerbated in the last 30 years by a dramatic increase in wealth inequality overall and particularly along racial lines (Asante-Muhammed et al. 2016). Figure 2 shows the differences in income and wealth among race and ethnic groups, using the latest data from the U.S. Census. Several economic studies also show a stark gender wage gap, with lower wages for women (Hartmann and Hegewisch 2019). A focus on getting more qualified DBEs and WBEs involved in airport contracting can be an important step in closing some of these persistent income gaps. Value to Local Community or the Larger Region Airports that offer skills training or opportunities for advancement may provide room for growth for employees who may not otherwise have access to those learning opportunities (Mor Barak 2017). If airports target their hiring toward local or more diverse communities and provide job training to those candidates, they can also improve the skills of the candidate pool and may contribute to improved overall welfare of local communities (Mor Barak 2017). These types of candidates will then be more suited for open positions at the airport. Training will also provide employees and local or diverse candidates with preparation for more highly skilled positions.

22 Guidance for Diversity in Airport Business Contracting and Workforce Programs Highly skilled positions at the airport or specialized airport contracts may offer substantial salary increases and improve household wealth gaps in the community, particularly when more minority candidates are recruited into those positions. Improved household incomes may lead to higher qualities of life and can also provide individuals with more purchasing power and indi- vidual freedoms. In effect, more individuals with a higher quality of life can lead to enhanced and happier communities as a whole. In an interview for this research, Elena Anaya, the community and citizenship director for Turner Construction in Northern California, discussed economic benefits to the local community where hiring from underserved communities allows for income to flow into those communities as employees go back and spend there. Furthermore, she noted that when residents of underserved communities are successfully employed, they can act as role models within those communities. The region surrounding the airport may also benefit from increased economic activity related to private-sector airport business. This activity provides local and state governments with a larger tax base, which may yield increases in tax revenue (Econsult Solutions, Inc. 2017). Increased state and local tax revenue derived from airport-related private-sector activity can allow government entities to spend more on projects that benefit their communities (i.e., parks, local infrastructure, public transportation, and public education). Increased investment in public resources can contribute to healthier, cleaner, and more accessible recreation and learning opportunities and cultivate stronger community relationships (Fulton 2012). This can contribute to environmental justice, particularly if the nearby communities have been disproportionately harmed by ambient air pollution, greenhouse gas emissions associated with airport transportation, and noise pollution. The EPA defines environmental justice as “the fair treatment and meaningful involvement of all people regardless of race, color, national origin, or income, with respect to the development, implementation, and enforcement of envi- ronmental laws, regulations, and policies. This goal will be achieved when everyone enjoys: the same degree of protection from environmental and health hazards, and equal access to the decision-making process to have a healthy environment in which to live, learn, and work” (EPA n.d.). Environmental justice is inherently an issue for communities of disadvantaged backgrounds, and thus, airports can make positive contributions to disproportionately nega- tively impacted communities by hiring local. $0 $20,000 $40,000 $60,000 $80,000 $100,000 $120,000 $140,000 $160,000 $180,000 Asian White, not Hispanic Hispanic (any race) Black Median Household Income Median Household Wealth Sources: U.S. Census Current Population Survey, 2019 Annual Social and Economic Supplement; U.S. Census Survey of Income and Program Participation, reported in Eggleston and Hays 2019. Figure 2. Income and wealth gaps by race and ethnicity.

Benefits of Business and Workforce Diversity 23 Additionally, the tourism industry in the region immediately surrounding the airport will benefit from the economic activity at the airport. The tourism and hospitality sectors located near the airport tend to have the direct effect of circulating employment locally, as passenger spending is also directed at local establishments (Econsult Solutions, Inc. 2017). With the addition of local, diverse, and small-business contracting opportunities at the airport, the local economy will benefit. As described in more detail in Chapters 4 and 5, airports often have programs aimed at cultivating the skill growth and professionalization of diverse businesses or employees. In addition to benefiting the airport, these programs have significant benefit to local community members because the programs expand professional opportunities nearby. Social Benefits Social Justice Airports that hire more diverse staff and contract with diverse businesses will contribute to the livelihoods of individuals from historically disadvantaged and underrepresented backgrounds (Mor Barak 2017). By directly providing salaries and awarding contracts to groups from dis- advantaged and underrepresented backgrounds, such as minorities and women, airports can provide more economic stability and work toward distributive justice (Mor Barak 2017). The principles of “distributive justice” often provide “moral guidance” for “processes and struc- tures that affect the distribution of benefits and burdens in societies” (Mor Barak 2017). In an airport context, distributive justice can be interpreted as removing the burden that disadvan- taged communities may already face in contracting or hiring processes and presenting those communities with more equal opportunity. Creating policies and programs to increase workforce and contracting diversity at airports serves as an important vehicle for providing social mobility to these groups. Discrimina- tion in the labor market and significant barriers within the workplace and when seeking to attain work, such as prejudice, race-based, ethnicity-based, or gender-based discrimination, continue to affect minorities and women (Mor Barak 2017). Considering these barriers, providing direct employment and contracting opportunities to these groups can be an effective movement toward social justice (Reeves 2013; Lindor 2018). Social justice can be enhanced in the workplace by “creating an organizational environment in which no one is privileged or disadvantaged due to characteristics such as race or gender” (Mor Barak 2017). By establishing policies that help more minorities and women succeed in airport contracting, airports can also ultimately help people from economically disadvantaged backgrounds gain more socio- economic stability. Research shows that bias pervades the hiring, job interview, and employee selection process because interviewers unconsciously prefer candidates who are more like them. Increasing the diversity of a workforce can ultimately reduce the discrimination that candidates of color and other minority groups face during the application process (Strauss 2019). Similarly, studies show that there tends to be less work-related discrimination when there are larger communities of color in the workplace (Strauss 2019). Likewise, research suggests that discriminatory behavior can result from a lack of diversity and inclusion in the workplace (Feldblum and Lipnic 2016). Thus, airports that establish policies that encourage diversity and inclusion and ensure non- discrimination in the workplace can increase their inclusivity. Having definitive policies aimed at increasing diversity in the workplace and in contracting can also push the needle toward distributive and social justice locally by providing intentional and equal economic opportunity to disadvantaged communities.

24 Guidance for Diversity in Airport Business Contracting and Workforce Programs Benefits to Third Parties A more diverse workforce may provide benefits beyond the airport and the local community. For example, passengers at commercial airports may find it more pleasant to fly through air- ports with more diverse staff. Because passengers are culturally and geographically diverse, they expect the airports that they travel in to be culturally diverse as well (Contreras 2016). Increased workforce and contracting diversity at airports may also improve and enhance the cultural expe- riences of visitors and passengers. Passengers are also more likely to spend money at airports where they are happy and comfortable. When given a choice in airports, they will also be more likely to return to airports they like (Contreras 2016).