Managing Workforce Diversity for Better Corporate Results
While diversity is a problem for most organisations, successful corporations learn to manage it to their full advantage. By adopting new structures and work practices that are radically different from traditionally minded management, these organisations managed to acquire a competitive advantage in the global marketplace. The whole purpose of managing diversity is to bring out the best of employees Talent, Abilities, Skills and Knowledge for the benefits of individual employees as well as the well-being of the corporations. When workforce diversity is well managed, no employee in the organisation feels disadvantaged.
Business firms are beginning to recognise the power of workforce diversity as a competitive tool. Cascio in his book ‘Managing Human Resource: Productivity, Quality of Work life, Profits (published by McGraw-Hill in 2006) recommends asking the following questions in order to justify that diversity is, in fact a competitive factor:
- How can diversity help business corporations expand their operation into global market?
- How can diversity help to build and sustain brand equity and improve consumer spending?
- How does workforce diversity enhance an organisation’s HR strategies?
- How does the diversity element build corporate image among the consumers?
- Does diversity improve operational efficiency?How?
Cascio citing studies done by several researchers, answers each of the above questions with examples to make a business case for diversity. In the process of discussing the business case for diversity, the author want the readers to ask an important question — ‘What steps can you take as a manager to become more effective in a work environment that is more diverse than ever?”.
Workforce diversity should be seen in terms of age, gender. Race, ethnic composition, religion and nationality. Successful 21st-century corporations no longer view diversity as a problematic issue. They view diversity as an opportunity that can be utilised to compete more effectively in the local and global markets.
According to Cascio (2006, p.119) managing diversity means aiming for a ‘heterogeneous workforce’ that is capable of achieving its potential in a non-discriminatory, fair and just work environment.
What are the reasons for diversity being considered as an important activity in managing the human resources? Cascio lists the following 5 reasons as to why diversity has become an important activity:
- Shift from manufacturing to a service economy
- Innovative business strategies that demand teamwork
- Mergers and Alliances
- Changing labour market conditions
Unlike the jobs in the manufacturing industry, service industry (banking, financial services) job holders need to maintain close and constant contact with their customers. Service industry employees are required to understand the needs and expectations of their customers. With increased customer base that is diverse, no business firm has the luxury to ignore the customer groups. To take full advantage of the opportunity corporations need to bring employees who understand and can relate to the diverse customer base. This is to ensure in the words of Cascio “workforce should mirror their customers”. This enables smooth operations and more cordial interactions between the business firms and their customers.
Recognising the limited market locally, more and more corporations look at the global market for sustaining and enhancing the market share. With the Globalization of markets, business corporations should learn how to manage the workforce diversity. Successful corporations try to learn from their colleagues around the world. This will enhance corporate performance. That would not be possible without a system to manage diversity.
In their attempt to cope with the problems and challenges facing their corporations, managers realise the limitations of the traditional forms of organisational structure. The strategies that need to be put in place can no longer be managed by the traditional hierarchy based command and control system. For these strategies to work, you need a team effort. Teams basically mean diverse labour force. Successful team management is about successfully managing workforce diversity. To emphasise the usefulness of teams, Cascio (2006, p.123)quotes the words from Ted Childs, vice president, IBM Global Workforce Diversity: “When a company’s vision includes the growing mix of the talent pool and the customer base, then the real argument for diversity is the business case”.
Mergers, acquisitions and alliances are becoming more common than ever before. When two business corporations decide to pool their expertise and other resources following mergers, acquisitions and alliances know the difficulties they will face, if they do not have an effective system in place to make them work together. The cultures of merged companies differ. The strategic partner’s way of doing things may be different. The values, beliefs and the norms may not be a 100 percent match. To avoid culture shock and clash of culture, organisations should put a system in place, so that employees at all level understand and accept their differences while working towards taking full advantage of diversity that came about following mergers, acquisitions and strategic alliance. Here the focus is on seizing the opportunities arising out of diversity and being proactive in managing the diversity-related issues. To make this work, managers at the top level must be convinced of the competitive advantages of workforce diversity.
The labour market is changing rapidly. More women are entering the labour market and they continue to remain in the labour market for a longer period of time. Business corporations should adopt appropriate measures to meet the unique needs of the women. Balancing work and life appear to be the main focus when it comes to managing the female workforce. Cascio’s Managing Human Resources: productivity, Quality of Work Life, Profits lists the following six ways that corporations may adopt to take the interests and well-being of their women employees:
- Alternative career paths
- Extended leave
- Flexible work scheduling
- Job sharing
Organisations need to train their employees about diversity and its usefulness to the well-being of the corporation. Diversity training is a critical part when managing diversity. According to Cascio (p.124) employees need to ‘understand and value’ the differences among them. The acceptance of differences in a positive manner is critical if the corporation is keen to enable innovation through creative thinking in the workplace.