MGM Resorts to train thousands more in diversity

By Steve Green

Friday, Oct. 1, 2010 | 2 a.m.

MGM Resorts International, the largest private employer in the Las Vegas area, is aggressively expanding its diversity initiative as it strives to boost profits in the tourism and convention markets.

The hotel and casino operator, which runs the industry’s most-honored diversity program, will announce plans today to provide formal diversity training to an additional 4,000 employees — mostly managers — by the end of 2011.

That would lift by 36 percent the number of MGM Resorts employees and managers to receive “Diversity Champion” training, which consists of three days of education, including workshops and role-playing.

The training aims to improve the performance of employees and managers by helping them embrace diversity in the workplace; it also provides business benefits by training workers to make people of all races, ethnicities, sexual orientations and backgrounds feel welcome at company hotels.

“It has become more important than ever, particularly in today’s recessionary economy, that we foster an inclusive culture of excellence aligned with our business mission,” said MGM Resorts board member and former U.S. Labor Secretary Alexis Herman.

MGM Resorts, marking the 10th anniversary of its diversity program, also plans today to present its latest diversity and charitable giving reports at Aria.

The reports show improvements from five years ago in the representation of minorities and women in overall employment and managerial ranks, as well as continued strong spending with minority- and women-owned suppliers and contractors.

MGM Resorts employs 53,646 people in Southern Nevada. Of about 62,000 employees overall, including those in Michigan and Mississippi, about 61 percent are minorities, the company said in the diversity report to be released today. That’s up from 55 percent in 2005.

Among MGM Resorts managers, about 44 percent are women and 36 percent are minorities — up from 42 percent and 32 percent, respectively, five years ago.

Increasing diversity is helping the company better compete in landing special-interest conventions, such as UNITY, a group of minority journalists that plans to hold its 2012 conference of more than 11,000 people at Mandalay Bay.

Chief Diversity Officer Phyllis James acknowledged in an interview that the plan to provide diversity training to 4,000 more people is ambitious, but said it’s necessary as MGM Resorts works to land meetings and conventions in what she called the lucrative multicultural market.

The company’s diversity program, she noted, has since its start been supported by the top executives at the company long controlled by billionaire Kirk Kerkorian.

A Kerkorian gaming lieutenant, former MGM Resorts Chairman and CEO Terry Lanni, took a major interest in driving diversity at the company. His successor, Jim Murren, calls diversity a business imperative and has quarterly roundtables with employees to discuss the initiative. Also, Anthony Mandekic, an executive at Kerkorian’s Tracinda Corp., is on the MGM Resorts board of directors’ Diversity and Community Affairs Committee chaired by Herman.

MGM launched its initiative in 2000 as the industry faced questions and criticism from gaming regulators and minority activists about employment practices and spending with suppliers.

MGM’s program has grown to where it regularly appears — and often is the only gaming company — on national diversity lists such as Black Enterprise magazine’s “40 Best Companies For Diversity” and DiversityInc’s “Top 50 Companies For Diversity.”

Harrah’s Entertainment and Boyd Gaming also have formal diversity programs.

At Harrah’s, for instance, Chief Diversity Officer Fred Keeton last month wrote in In Business Las Vegas, a sister publication of the Las Vegas Sun: “At Harrah’s, our commitment to diversity and inclusion is a priority and is woven into our day-to-day operating structure.”

In interviews this week, officials at the American Gaming Association and UNLV’s Center for Gaming Research said diversity as a business practice is ingrained in the industry, and despite hard times financially for casino operators, there’s no evidence they’ve retreated from diversity commitments. If diversity programs have been cut, they’ve been cut in proportion to other corporate spending cuts as the recession reduced hotel and casino revenue, these officials said.

“A big part of (multicultural) marketing is going to be the employees on the floor and the people designing the strategies,” said David Schwartz, director of the UNLV Center.

But like everything else in a corporate budget, diversity spending competes with other needs.

“Unfortunately, diversity efforts by many are still viewed as social programs or initiatives with little return on investment,” Joe Coe, director of diversity at Boyd Gaming, told In Business last month. “Diversity initiatives have not been immunized from the recession.”

Nevada is not among the gaming states requiring gaming operators to disclose minority and female employment and supplier spending levels — MGM Resorts does it voluntarily.

Judy Patterson, executive vice president at AGA, which launched a diversity initiative in 2000, in 2009 started its Diverse Vendor of the Year awards to further highlight the contributions to the industry of minority- and women-owned businesses.

Among the AGA Diverse Vendor of the Year winners is Branch-Hernandez and Associates — Insurance Services Las Vegas, which was nominated by MGM Resorts.

Branch-Hernandez, owned by Aubrey Branch and Joe Hernandez, has 17 employees. It administers supplemental employee benefits and provides general liability insurance and claims administration for MGM Resorts.

Branch and Hernandez said in an interview that MGM Resorts is proactive in seeking minority and women-owned contractors, requiring such participation in major project bids, and that MGM Resorts helped Branch-Hernandez break into the professional services market on the Strip as the company won work for projects including the Bellagio Spa Tower and CityCenter.

Branch said MGM Resorts hasn’t skipped a beat in its diversity initiative despite the departures in 2008 and 2009 of the longtime diversity leaders at the company, Lanni (retired) and Punam Mathur (now at NV Energy).

“They put a system in place where they can’t fail,” Branch said.

Some CityCenter contractors are still waiting to be paid as payment closeout disputes and alleged construction defects are litigated, but Hernandez said these issues shouldn’t detract from MGM Resorts’ achievements in supporting diversity.

He said “they deserve all the credit” for involving small and minority-owned businesses early on in the planning for projects and pumping hundreds of millions of dollars into such companies — a number that at CityCenter alone totaled $700 million.

James noted that after disputes arose between general contractor Perini Building Co. and CityCenter over the closeout process, MGM Resorts started working directly with the project’s subcontractors and has come to agreement with many of them, with talks continuing with those where settlements haven’t been reached.

Besides highlighting the company’s diversity achievements that came despite economic pressures, MGM Resorts also said the company and its employees continue to support communities across the country where the company has properties.

“Our employee foundation alone has donated more than $35 million in the past 10 years in individual designations and grant funding — $4.7 million during 2009, at the height of the recession,” James said.

For the company, MGM Resorts said corporate giving to diverse organizations and individuals increased from 15 percent in 2002 to 51.51 percent in 2009. The company doesn’t disclose the amount it donates annually.