As the composition of the workforce is changing, many companies are faced with a challenge and an opportunity. I remember reading an excellent article about diverse teams a few years ago as part of an MBA course. Diverse teams might be less productive if they try to avoid conflict in the discussion and do not contribute unique perspectives of each team member to the problem solving. The team might feel good about their work as a group of people who agree with each other, but the main advantage of unique expertise of the team members is lost.
I guess, general aspect of the workforce diversity is similar: it can give companies competitive advantage, but the road to this advantage is not intuitive, and may be uncomfortable. The book Managing Diversity: Toward a Globally Inclusive Workplace is an excellent source for understanding the topic.
The book highlights the process of moving from homogeneous to a more heterogeneous workforce. As birth rate in developed countries declined, immigration is contributing to this trend. Change in status of women in many developing countries and intergenerational groups of people working on the same project also becoming more common.
The most significant problem in the diverse workforce is the exclusion – both overt and perceived. “Individuals and groups are implicitly or explicitly excluded from job opportunities, information networks, team membership, human resource investments, and the decision making process because of their actual or employer-perceived membership in a minority or disfavored identity group.”
The inclusive workplace:
- Values and utilizes individual and intergroup differences within its workforce
- Cooperates with, and contributes to, its surrounding community
- Alleviates the needs of disadvantaged groups in its wider environment
- Collaborates with individuals, groups , and organizations across national and cultural boundaries
And – what might be counterintuitive – companies that practice inclusion benefit financially from this approach! The mechanism is probably similar to the work of diverse teams – unique individual contributions are beneficial for the success of the project or the company, and simple agreement with the dominant idea puts the company at the competitive disadvantage.
Definition of diversity was also surprising to me – it was more broad than international and cultural differences; and I observed companies struggle even with obvious diversity issues.
Workforce diversity refers to the division of the workforce into distinct categories that (a) have a perceived commonality within a given cultural or national context and that (b) impact potentially harmful or beneficial employment outcomes such as job opportunities, treatment in the workplace, and promotion prospects – irrespective of job-related skills and qualifications.
Interesting: people tend to exhibit prejudice and discrimination based on even arbitrary group categorization. Considering that this phenomenon exist, it is not surprising that inclusiveness is so challenging.
This trait most likely had an evolutionary advantage over the history, but no longer useful (as our interest in high calorie food 😉 ). When the environment changed, those organizations that can overcome their cravings will be fitter and more competitive.
Diversity management refers to the voluntary organizational actions that are designed to create greater inclusion of employees from various backgrounds into the formal and informal organizational structures through deliberate policies and programs.
Very interesting distinction: “The current business focus on diversity is quite different from equal rights legislation and from affirmative/positive action programs. The latter are about trying to achieve equality of opportunities by focusing on specific groups and righting past wrongs. Diversity efforts focus on managing and handling the diverse workforce to give the company a competitive advantage.”
Another interesting point: executives tend to lead in the manner consistent with their culture. Understanding the culture can help to understand what type of leadership could be more effective in a particular environment.
Diversity programs implementation in the company can be enhances if managers bonuses are linked to diversity management performance.
Study of 127 large US companies: board of directors diversity was positively associated with both return on investment and return on assets.
Meta-analysis of 52 quantitative studies over 30 years of research indicated positive correlation between companies’ social performance and their financial performance.