Table of Contents:
- Meaning of Workforce Diversity
- Definition of Workforce Diversity
- Demographic Characteristics of Workforce Diversity
- Reasons for the Emergence of Workforce Diversity
Meaning of Workforce Diversity
Workforce Diversity has been defined as any attribute that humans are likely to use to distinguish one person from another. This includes factors such as sex, race, age, cultural norms and values. It involves not only how people perceive themselves but also how they perceive others. Those perceptions affect their interactions. For a wide assortment of employees to function effectively as an organization, the professionals need to deal effectively with issues such as communication, adaptability, and change. Diversity will increase significantly in the coming years. Successful organisations recognise the need for immediate action and are ready and willing to spend resources on managing workforce diversity in the workplace now.
Definition of Workforce Diversity
According to Roosevelt Thomas, “Diversity is the configuration of a workforce on a variety of demographic dimensions, including age, race, gender, nationality, religion, ethnicity, tenure, functional or educational background, physical status, or sexual orientation”.
According to Cunningham, “Diversity in the workplace is defined as the presence of differences among members of a social unit that lead to perceptions of such differences and that impact work outcomes”.
Valuing workforce diversity entails managing in a way designed to fully realise the potential benefit that differences can bring It means being aware of behaviour, leveraging strengths, acknowledging biases/prejudices, avoiding assumptions, and focusing on job performance and conduct. In practice, resource development is often called on to provide training that supports management’s efforts to appreciate and promote workforce diversity.
Demographic Characteristics of Workforce Diversity
Several demographic characteristics contribute to diversity which are as follows:
In addition to age composition, there are also changes taking place in the gender composition. Over the past four decades, there has been an increase in the number of women entering the workforce. Despite this, women still receive very low wages compared to their male counterparts. Some analysts try to explain the reasons for this disparity. The first is that women do not have the same time on the job as men, so their salaries are lower. Another commonly cited reason is that many women want to spend more time with their children at home, so they are willing to adopt a slower career advancement and accept lower salaries. To remove this kind of disparity, diversity management should dramatically change the policies and day-to-day practices of organisations.
The changing age composition of the workforce is forcing organisations to make several adjustments. One must acquire the skills to deal effectively with older workers. There has been a considerable increase in the number of age discrimination complaints.
Organisations must also learn how to deal with younger employees, as their values often differ significantly from those of their older counterparts. The days of total loyalty and commitment to the company in exchange for guaranteed employment have become a thing of the past. Young employees do not have such loyalty values, and organisations in recent years have made it clear that there is no such thing as lifetime employment.
Education will be one of the major challenges. On one hand, meeting the expectations of highly educated individuals becomes challenging due to reduced opportunities for promotion caused by organizational flattening and downsizing. On the other hand, there is a challenge of bringing employees up to speed in knowledge-based organizations. With the rapid advancement of technology and the skills required to remain competitive in the quality-conscious, global economy continue to rise, companies will have to invest in the training and education of their employees. Those with high school educations will find that these skills will carry them only so far, additional education and training are needed. Even engineers and other high-tech personnel will need to continually enhance their knowledge and skills. Businesses will also find that job re-designs and reengineering will be necessary to streamline the work, and the employees must be able to adjust to these expanding knowledge requirements.
The term ethnicity refers to the ethnic composition of a group or organisation. Census, statistics indicate that between 2000 and 2050 the racial mix will change dramatically. The changes in the racial composition of the general population are reflected in the workforce. These changing ethical patterns serve as a clear indication of the increasing diversity within the workforce. The challenge for management will be to deal with these ethnic changes, as with the changes regarding gender, in terms of policies and practices concerning pay and promotions. Similar to women, minorities, on average, receive lower pay and have limited representation in upper management positions. A recent large study of women of colour found that even those identified as being on a corporate “fast track” for promotion and pay report their workplace culture is uncomfortable and unsupportive.
Reasons for the Emergence of Workforce Diversity
The main reasons for the emergence of diversity are as follows:-
1) Changing Workforce Demographics
A major reason for the emergence of diversity as a challenge is the changing demographics, particularly the ageing population. Older workers, minorities, women, and those with more education are now entering the workforce in record numbers. However, for now, it can be noted that the composition of today’s and tomorrow’s workforce is and will be much different from that of the past.
For example, USA Today calculates a Diversity Index (based on population ethnic and racial probabilities) that now shows almost 1 out of 2 people randomly selected in the U.S. are ethnically or racially different, up from 1 out of 3 in 1980. At the more micro level, assuming talent and ability are equally distributed across the population and that everyone has an equal opportunity, this means that diversity should be present at every level within an organization. However, such an assumption is not yet valid because diversity has not made its way to the top levels of most organizations until now.
2) Legislation and Lawsuits
Another pragmatic reason for diversity in today’s organisations stems from legislation and lawsuits. The political and legal systems have compelled organisations to hire more broadly and to provide equal opportunity for all employees. The Indian Constitution guarantees equality as “Fundamental Rights” in Articles 14, 15, and 16 in Part III.
Article 14 guarantees equal protection under the law and equality before the law.
Article 15 restricts discrimination based on religion, race, caste, sex, birthplace, or any other combination of these factors.
Article 15 also permits the creation of special provisions for women, children, socially and educationally backward classes of citizens, as well as the Scheduled Castes and the Scheduled Tribes (SCs and STs). These special provisions shall not be deemed discriminatory.
Article 16 ensures equal opportunities in public employment. It also provides the state with the authority to implement reservations in favour of the Scheduled Tribes (ST), Scheduled Castes (SC) and Other Backward Classes (OBC). While the Constitution does not specifically mention reservation for women, the Constitutional (74th Amendment) Act, 1992, brought in provisions mandating one-third reservations for women in local governance bodies. These guarantees apply to public and state institutions. The only provision that applies to both the private and public sectors is Article 17, which prohibits untouchability and strictly forbids its practice in any form.
Like India, various other countries (for example, the US, UK, etc.) have also implemented several laws for providing equal opportunities:
i) Age Discrimination Act of 1978: This law at first increased the mandatory retirement age from 65 to 70 and then was later amended to eliminate an upper age limit.
ii) Pregnancy Discrimination Act of 1978: This law gives full equal opportunity protection to pregnant employees.
iii) Americans with Disabilities Act of 1990: This law prohibits discrimination against those essentially qualified individuals challenged by a disability and requires organisations to reasonably accommodate them.
iv) Civil Rights Act of 1991: This law refined the 1964 act and reinstated the burden of proof falls on employers to eliminate discrimination and ensure equal opportunity in employment to employees. It also allows compensatory and punitive damages through jury trials.
v) Family and Medical Leave Act of 1993: This law allows employees to take up to 12 weeks of unpaid leave for family or medical reasons each year.
The implementation of these laws, along with lawsuits and the threat of lawsuits, have strengthened the cause of diversity. Individuals and groups that have found themselves excluded from organisations or managerial positions can bring and have brought lawsuits to overcome discriminatory barriers and ensure themselves equal opportunity in employment.
3) Competitive Pressures
Another reason for the emergence of the importance of diversity to organisations is the realisation that diversity can help them meet the competitive pressures they currently face. Companies that actively seek to hire and promote minorities and women are going to end up with a more talented and capable workforce than those that do not take such a proactive, affirmative-action approach.
For example, A recent thorough study conducted by the American Management Association found that the more accurately the senior team of a company represents the demographics of its market, the more likely the company is to design successful products, market services effectively, and create advertising campaigns that resonate with the audience. Furthermore, companies that develop a reputation for “celebrating diversity” are more likely to attract the best employees regardless of their gender, age, or ethnicity. The most qualified and talented people will perceive better opportunities with these companies compared to others.
In other words, diversity can provide an organisation with a competitive advantage. For example, a recent study analyzed strong performance in the banking industry and the relationships among business strategy and racial diversity. It was found that racial diversity interacted with business strategy in determining company performance as measured in three different ways: return on equity, productivity, and market performance. This study concluded that the results demonstrated that diversity not only adds value but, in the proper context, also contributes to a firm’s competitive advantages.
4) Increasing Globalisation of Firms
A final major reason for the emerging challenge of diversity is that more and more organisations are entering into the international arena. A natural byproduct of going international is increased diversity, particularly cultural diversity. If domestic organizations embrace and encourage diversity, as they expand globally, they will be more familiar with collaborating with individuals who have different customs, cultures, social norms, and more.