Join Wayne Cascio for an in-depth discussion in this video Making the business case for diversity, part of Human Resources Foundations.
- The concept of diversity, all the things that make us different from each other, is more than just a passing blip on the corporate conscience. Diversity is not just things you can see, like age and gender, race and ethnicity, it's also the many things you can't see, like experience, field of education, where you grew up, your personality type and cultural influences that affect how you think and what you believe. Diversity is not just something a company should have, or ought to have, it's something that virtually all companies already do have.
Many companies view it as a major competitive factor, and something to celebrate and to leverage to their advantage. As MGM Resorts says, "We are at our most effective "as an organization when we are at our most inclusive." Likewise, IBM proclaims proudly, "We learned early on "that fostering diversity is not only the right thing "to do for society, but for business as well." In this video I want to share with you five key trends in organizations and in markets that comprise the business case for diversity.
The first is changing labor markets. You can be sure of this, over the next 25 years the U.S. workforce will comprise more women, more immigrants, more people of color, and more older workers. Globally, more than 500 million people, double the number today, will legally work outside their home countries in the next 20 years. Why? Experts point to factors such as conflict, natural disasters, climate change and economic opportunism.
Workplaces everywhere will be characterized by more diversity in every dimension. Next is the shift from manufacturing to services. Today roughly 90% of U.S. employees work in service-based industries such as banking, financial services, healthcare, tourism and retail. Looking ahead, virtually all of the growth in new jobs will come from service-producing industries. Jobs in those industries require lots of interaction with customers.
To be effective, employees need to develop the skill of customer literacy, that is the ability for employees to read their customers, to understand them, to anticipate and monitor their needs and expectations, and to respond sensitively and appropriately. In the service game, customer literacy is an essential skill, and having a diverse workforce is an important step towards that kind of customer literacy.
Another key trend is the globalization of markets. As organizations around the world compete for customers, they offer customers choices unavailable to them domestically. People everywhere worship two words, cheap and available. With more options to choose from, customers have more power to insist that their needs and preferences be satisfied. To satisfy them, firms have to understand their customers better.
To do that, some firms have established a strong local presence, such as Japanese car makers using advertisements that showcase local dealerships and satisfied owners. Others have forged strategic international alliances, such as Microsoft and Nokia, Fiat and Chrysler. Leading global companies measure success in this area of cultural learning just as they measure other business factors.
A big trend today is the growth in mergers, acquisitions, and international alliances. The managers who have worked out the results of all the mergers, acquisitions, and strategic international alliances occurring over the past 20 years, already know what several large studies have found, that integrating diverse company cultures is the top challenge in mergers and acquisitions. Corporate cultures may differ in many ways, such as the customs of conducting business, how people are expected to behave, and the kinds of behaviors that get rewarded.
The challenge for both workers and managers is to understand and capitalize on that diversity as companies combine their efforts to offer goods and services to customers in far-flung markets. If you'd like to know more about mergers and acquisitions, I encourage you to view Mergers and Acquisitions Fundamentals here on lynda.com. The final trend to consider is new business strategies that require more teamwork. Teams mean diverse workforces because they often draw from the most talented or experienced employees.
Young and old, male and female, better and less well-educated, members from different departments, these are just some of the dimensions along which team members may differ. Coordinating those talents to develop new products, better customer service, or ways of working more efficiently is a difficult yet essential aspect of business strategy, and it presents new kinds of management challenges. So think about diversity in your company.
Is the mix of people changing? How is your industry changing? Does it require closer interaction with customers? What about the actual work? Is more of it being done in teams? Are you expanding into new markets? Think about the short-term and long-term consequences of these changes. By deeply considering these factors and their implications for your company, you'll be well on your way towards managing diversity effectively.
- Administrative vs. strategic HR
- Managing talent
- Developing employees through training and career development
- Managing performance
- Managing international employees