Workforce Diversity Definition, Meaning, Dimensions, Factors and Strategies

Workforce Diversity

We live in an era when global corporations and their worldwide reach bring benefits in terms of innovative human resource policies as well as managing a workforce composed of diverse races and ethnicities. Furthermore, the issue of gender diversity in terms of more women participating in the workforce and the third gender is a trend that has intensified in India over the past two decades and much earlier in developed countries.

When there are people of different castes, creeds, religions, minorities and different genders in an organization, the question naturally arises as to how to resolve the differences between these employees without creating too much friction in everyday interactions.

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It is important to manage diversity otherwise the performance of the organization can lead to potential lawsuits and cases with minority cells and women’s commissions from aggrieved and disgruntled employees who feel unhappy because of incidents of discrimination and harassment based on their ethnicity or gender.

Workforce diversity also refers to the various individual characteristics that make an organization’s workforce heterogeneous. In the past, the organization took a “melting pot” approach to differences in organizations. It was believed that people who belonged to different backgrounds wanted to adjust automatically to the workforce in the organization, but nowadays employees come to work with a lifestyle, values and preferences.

Hence the challenge for HR managers is to make their organizations more adaptable to diverse groups of people by addressing different lifestyles, needs, values and working styles.

Workforce Diversity Meaning

Workforce diversity means that the heterogeneous composition of the organization’s employees in terms of gender, age,  ethnic origin, language, marital status, education, etc., is indeed a challenge for HRM professionals.

Workforce Diversity Definition

According to Moorhead and Griffin – “Workforce diversity is related to similarities and variations in characteristics such as age, physical abilities, ethnic heritage, gender, disabilities, race and sexual orientation among employees of organizations.”

There are important implications for workforce diversity management. Managers will need to treat each group of workers equally and change their approach to each group of workers to encourage creativity, improve productivity, reduce labour turnover and avoid discrimination of any kind.

When workforce diversity is managed properly, the organization will have better communication, better human relations and innate work culture.

India is a diversity that occurs due to several factors such as the multi-linguistic composition of the subcontinent, the coexistence of people following a large number of religions, an old and deeply rooted multi-caste system and cultural invasions from outside. The world has confused the core values of the Indian mind.

To recognize and manage diversity among the workforce based on religion, race, caste, language, gender etc. In addition, a large number of women entering the field of work is emerging as a contributing factor to the diverse workforce in modern organizations. No wonder, therefore, that organizations in India have to deal with a very diverse social group of employees.

This is seen by managers as a problem without which they would have done better. However, many managers do not understand that workforce diversity presents an opportunity and an advantage that can be used to compete and win in a global marketplace.

workforce diversity

Dimensions of workforce diversity

The features that define the workforce of a company can be categorised into two groups, namely the primary dimension and the secondary dimension.

Primary dimensions such as age, gender, race, ethnicity, sexual orientation and physical ability represent elements that are either innate or have additional influence on early socialization. The essence of these dimensions is who we are as human beings. They define us for others, causing them to react accordingly.

These are permanent aspects of our personality. Secondary dimensions represent elements that we learn or have some control over in our lives, such as education, marital status, religious beliefs, language, etc. Secondary dimensions add a layer of complexity to the way we see ourselves and others, and in some instances can have a powerful effect on our core identity.

In an organization, people enter the workforce with a unique perspective of what is shaped by primary and secondary dimensions. Building effective human relationships is possible only when people learn to accept and value differences in others. Without this acceptance, both the primary and secondary dimensions of diversity can act as barriers to further collaboration and understanding.

Primary Dimensions

These are key factors about each member of the workforce that cannot be changed such as gender, race, age, physical and mental abilities, and sexual orientation. These innate elements are interdependent and exert a significant influence on a person’s behaviour throughout life. Together they form a ‘self-image’ of a person.

Gender diversity is increasingly evident around the world. Not only more women are working, but gender-based occupational segregation is also declining in many countries. Thus, men and women are more likely to work side-by-side within corporations. Age diversity is also increasing. Many industrialized countries are experiencing declining rates of population growth, prompting employers to hire both young and old employees.

Furthermore, as organizations allow higher education of younger employees to substitute for on-the-job experiences that employees’ previous peers had to earn to be promoted, relatively young employees are more often found in higher-level positions. As a result, age diversity is replacing the homogeneity connected with traditional age-based stratification.

The greater the quantity of primary differences between people, the more difficult it is to build trust and mutual respect. Cultural conflicts and conflicts between groups of people with different origins and identities can have devastating effects on human relationships in an organization.

Some organizations are immune to problems that arise from interactions between genders and generations. When we add the secondary dimension of diversity to the mix, effective human relationships become even more difficult.

Secondary Dimensions

These constitute elements that can be changed or at least modified. They include a person’s religious beliefs, health habits, education, training, general appearance, status relations, ethnic customs, communication style and income level. All of these factors add an extra layer of complexity to the way we see ourselves and others and can in some instances have a powerful effect on our core identity.

An accountant with ten years of work experience can adjust to a new position, unlike an accountant with very little experience. A male earner, who loses his job, maybe badly affected by the loss of his income as he has to meet his family demands, whereas a married woman with an unmarried woman may not be affected by the same loss. Because her husband can still meet the needs of her family.

Even though such conditions specifically intensify the effects of the secondary dimensions, they do not reduce the effects of the primary dimensions. Instead, the interactions between the primary and secondary dimensions shape a person’s values, preferences, and perceptions throughout life.

Both the primary and secondary dimensions of diversity can act as barriers to cooperation between individuals and groups if management fails to manage diversity effectively.

Factors that increase workforce diversity

(1) Service Sector Expansion – Service sector jobs, such as banking, tourism, and retailing tend to engage a lot with clients from diverse backgrounds and cultural moorings. To sell to a diverse customer base, and because customers prefer to buy from people of the same background, organizations these days have realized the need for a diverse workforce.

(2) Globalization of markets – To meet the needs and preferences of global customers, organizations have to move closer to their customers. Some organizations have established a strong local presence (for example, American companies advertise their products like soft drinks), while others have established international alliances (for example, Maruti Udyog Limited (MUL) has established Japan for automobiles). with Suzuki). Either way, diversity is introduced and must be managed.

(3) Need for Teamwork for Successful Implementation of Business Strategies – For business success, organizations depend heavily on teamwork. Diversity is an essential product of teamwork, especially when teams are drawn from a diverse base of employees.

(4) Mergers and Alliances – As mergers and alliances have become common, it has become important that the corporate culture of the merging entities work together. Workforce diversity, then, becomes necessary and profitable for the success of such mergers and alliances.

(5) Changes in the labour market – A rapidly changing labour market is also responsible for injecting diversity into the workforce. The increasing demand for knowledgeable workers and employing more and more women add an important dimension to workforce diversity.

(6) Constitution and Government Law – Under the provisions of the Constitution of India, certain portions of jobs in government and the public sector are reserved for the Scheduled Castes, the Scheduled Tribes, the other backward classes, the physically challenged, etc. This leads to diversity in the workforce.

Reasons for the increasing interest in workforce diversity

There are several reasons for the increasing interest in workforce diversity by modern organizations.

The major ones are mentioned below:

(i) Development of Service Economy:

In many developing economies, there has been a transition from a manufacturing economy to a service economy. This has led to the creation of many jobs in service industries such as hotels and tourism, banking, insurance, financial services, retailing, etc.

Jobs require understanding the needs of customers and taking steps for their satisfaction. It has been observed that companies can communicate better with their customers than with their customers who are similar to their customers.

(ii) Globalization of Markets:

With the emergence of globalized markets, business firms around the world compete for customers by offering alternatives that are unavailable domestically. With more options to choose from, customers have more power to insist that their needs and preferences are satisfied.

To satisfy them, organisations have to move closer to their customers. Some MNCs have established a strong local presence while others forged strategic alliances (eg, Maruti Udyog Ltd with Suzuki of Japan). Either way, diversity must be managed to create and maintain a competitive advantage in the market.

(iii) Mergers and Strategic Alliances:

For the successful supervision of strategic alliances and mergers, workforce diversity must be managed effectively. The main source of problems in mergers, acquisitions, and strategic alliances is the difference in the corporate cultures of the two entities.

Organisational culture can vary in many ways, such as the customs of conducting business, how people are expected to behave, and what types of behaviour are rewarded. Both managers and employees need to understand and capitalize on diversity as organisations join forces to offer products and services to customers in far-flung markets.

(iv) Increasing Role of Work Teams:

For survival and growth, modern organizations follow many strategies like innovation, quality improvement, cost control, and product differentiation. Such strategies require teams to work across the organization in place of traditional job roles.

It has been found that work teams have greater flexibility, lower operating costs, faster response to technological change, fewer job classifications, better response to new values   (e.g., increased autonomy and responsibility for lower-level workers) and promote the ability to attract. Keep the talent. Teams facilitate innovation by bringing together experts with different knowledge bases and perspectives.

(v) Variable Composition of Workforce:

The composition of the workforce in Indian organizations is changing. They are giving more employment to women, physically challenged persons, and persons belonging to Scheduled Castes and Scheduled Tribes. In addition, the workforce, nowadays, is more mobile. The organizations also have people coming from different states and cultural backgrounds.

Cultural diversity can be used by the organization to its advantage. Employees should be taught to understand and value different cultures, languages, orientations etc. to serve clients belonging to different cultural and ethnic backgrounds.

(vi) Managing Labor Market:

The rapidly changing labour market is also responsible for injecting diversity into the workforce. The increasing demand for knowledgeable workers and employing more and more women add an important dimension to workforce diversity.

(vii) Legal Requirements:

Under the provisions of the Constitution of India, certain portions of jobs in the government and public sector are reserved for Scheduled Castes, Scheduled Tribes, Other Backward Classes, Physically Handicapped, etc. This inevitably leads to diversity in the workforce in the respective organisations.

Workforce Diversity – Steps of Planning

There are six steps in planning workforce diversity

1. Set Strategic Direction

2. Conduct Workforce Analysis

3. Conduct Analysis

4. Develop Strategies

5. Apply Strategies

6. Monitor, Evaluate and Modify

Step 1 – Set Strategic Direction:

An agency’s vision, mission and measurable goals and objectives identify future functional needs. In turn, those requirements drive the analysis and elements of workforce planning.

When identifying future functional needs, focus on the task itself, not the people required to perform the job. The question is – “What key responsibilities are needed to meet the goals and objectives introduced in the strategic plan?” It may involve many of the organization’s current roles in addition to forecasting important future activities.

Step 2 – Conduct Workforce Analysis:

The key element in the workforce planning process is the analysis of workforce data. It reflects information such as job classification, abilities, diversity, experience, retirement eligibility, turnover rate, education and trend data. This phase reviews the work that an agency will need to achieve its goals and objectives, knowledge and skillsets, and the staffing levels required to perform that task.

There are two steps in conducting a workforce analysis:

Workforce demand forecasting identifies the future workforce required by an organization. The focus of this phase should be on the task that the organization must perform and the staff required to perform that task. In this step, identify the current work tasks being performed and the staff required to perform that work.

In this step, identify the current work tasks being performed, future or new work that needs to be done, and how the work will be done to achieve the goals of the strategic plan. We may also recognize the popular functions that will not be necessary in the future due to technological changes or responsibility in providing specific services.

Workforce supply analysis focuses on existing and future workforce supply organizations.

Once the tasks that must be done have been done focus on defining the staffing, or workforce required to perform those tasks, that are entitled to perform the job successfully, and determine the number of employees with these competencies that the organization will need. will need to complete their tasks.

Step 3 – Conduct Analysis:

Gap analysis is the process of comparing employee supply projection to workforce demand forecast, an analysis must consider the composition of employees, including demographic characteristics, geographic location, size and employee efficiency level. The company establishes a workforce strategy based on the results of this analysis.

The results of the analysis may show one of the following:

i) A gap (when projected supply is less than forecasted demand), which indicates a future shortage of required workers or skills; It is important to know what gaps will be in critical jobs so that the training or recruitment required can be estimated.

ii) A surplus (when projected supply exceeds forecast), which indicates future excesses in certain categories of workers and may require action. Surplus data may represent job classifications or skills that will not be needed or may be needed at least to some extent in the future.

Step 4 – Develop Strategies:

Once an organization identifies the workforce gap, it needs to develop and implement effective strategies to fill the gap. Critical gaps should be carefully analyzed to ensure timely action before these gaps become a problem for the organization.

A wide range of strategies exist to address future gaps and surpluses; Strategies encompass programs, policies, and practices that assist organizations in developing and retaining the critical workforce needed to achieve programs. 

Strategies can fall into a broad range of:

i) Position classification actions, redefining the title chain, adding new job classifications, redefining job classes, and rewriting position descriptions to better reflect future functional needs.

ii) Employee development strategies to find and hire qualified candidates from a variety of sources to incorporate other organizations or businesses.

iii) Recruitment/Selection strategy to find and hire eligible candidates from various sources to involve other organizations or the private sector.

iv) Maintaining a strategy to encourage employees to remain in the agency.

v) Organizational interventions such as redeployment or restructuring of employees.

vi) The succession planning strategy is geared towards ensuring that there are highly qualified candidates capable of filling important positions.

vii) Knowledge transfer strategies to capture the knowledge of experienced employees before leaving the organization.

Strategies should be put down to a manageable number. They should be prioritized to allow an organization to focus its resources on the most important strategies.

Step 5 – Apply Strategies:

Implementation brings to life the planning of the organisation’s workforce. A company may need a separate business plan to address the implementation of each strategy in the organisational plan.

Before implementing the plan, organizations should:

i) Make sure there is executive support for workforce strategies.

ii) Allocate important resources to identify organisational strategies.

iii) Clarify roles and responsibilities in implementing strategies. This includes identifying who is involved in implementing what, and the need for coordination between different parts of the organization or between different agencies.

iv) Establish timelines.

v) Set performance measures and milestones and expected deliveries.

vi) Communicate the plan. The basis of the plan, as well as its elements, must be communicated to all employees, why and how it was developed, how it will be implemented, and how it will affect employees.

Step 6 – Monitor, Evaluate and Modify:

Evaluation and adjustment are important in organisational planning and the key to constant improvement. If an organization does not regularly review its workforce planning efforts, it fails to identify and respond to unexpected changes.

Organizations should establish a process that provides a regular review of their organisational planning efforts:

i) Review performance measurement information.

ii) Evaluate what is working and what is not.

iii) Plan and adjust strategies as needed.

iv) Solve new workforce and organizational problems.

Workforce Diversity – The Result of Neglecting Workforce Diversity

In the era of globalization, the management of the organization must recognize the diversity of the workforce and manage it for the benefit of the organization.

If this is not done, there may be some ill consequences which are given below:

(i) Many professional, skilled and talented employees may leave an organization that does not value diversity. This will lead to excessive employee turnover.

(ii) Substantial money will be spent on recruiting and re-employing employees due to high employee turnover.

(iii) There are complaints of discrimination from smaller groups due to the mismanagement of different groups.

(iv) A remark, gesture, or joke given without malice, but received as an insult that may cause tension between co-workers.

(v) Due to lack of proper treatment, some employees may develop a feeling of being second-rate employees and may experience stress at the workplace.

(vi) The absenteeism rate may be higher in the case of employees facing absentee stress situations.

(vii) There may be a lack of openness and mutual trust among different groups and sub-groups. Communication in the organization can also be ineffective.

Recognizing the value of diversity and managing it as an asset can help to eliminate the above negative effects and make a positive impact on collaboration within the workforce. Companies can only be successful if they have an environment that enables all employees, not just a few, to work to their full potential.

Strategies for Managing Workforce Diversity

The Strategies for managing workforce diversity and cultural diversity are fourfold.

1. Personal Strategies:

Individuals with a broad-minded approach can devise strategies to manage diverse cultural situations based on other individuals’ situations, ego-states, and cultural backgrounds in the workplace. Individual strategies for managing cultural diversity are not inclusive. However, we do discuss some important strategies.

They are:

i. Understanding the cultural background of others;

ii. The belief that all cultures are good;

iii. Dangerous from another’s point of view;

iv. The ‘no-winning-over’ approach to another’s culture;

v. Clear communication.

2. Group Strategies for Cultural Diversity

The group of employees belonging to the same culture can understand the cultures of other groups and the cultural differences between the two groups. They can also devise appropriate strategies for managing cultural diversity.

Group strategies include:

i. Knowledge sharing

ii. Advice and caution

iii. Cultural exchange through socialization programs

These programs offer many benefits such as:

i. Understand each other beyond cultural boundaries;

ii. Prevent potential cultural conflicts at the workplace;

iii. Build relationships between employees’ family members, which will act as ‘shock absorbers during periods of cultural or work-related conflicts;

iv. Understand and respect the cultures of others;

v. Practice relevant or interesting areas from other cultures. This practice provides immense satisfaction to others whose cultural practices are adopted;

vi. Build a near-common culture in the workplace;

vii. Prevent cultural conflict at the workplace; And

viii. These programs serve as enhancing areas of cultural understanding.

ix. Helps provide a common platform for resolving cultural conflicts, if some of them cannot be prevented.

These programs suffer from some limitations like increasing time and resources. However, these programs manage cultural diversity most efficiently than other strategies. Now, let us discuss the organizational strategies.

3. Organizational Strategies for Cultural Diversity:

Organizations can devise effective strategies for managing cultural diversity at the workplace, in addition to strategies adopted by individuals and groups.

Organizational strategies include:

a. Recruitment and Selection Strategies

b. Organizational Policies and Practices

c. Cultural training

d. Breaking the glass ceiling

e. Formal socialization program

f. Structuring work teams

g. Use of counsellors

h. Communications

i. Special benefits and facilities for women and older people.

4. National Strategies:

National strategies for managing cultural diversity include:

i. Legislative approach to equal employment opportunities

ii. Efforts of Cultural Associations/Societies

iii. Attempts of diplomatic missions.

Strategic Benefits of Workforce Diversity 

Workforce diversity represents both challenges and opportunities for business. An increasing number of progressive organizations are realizing the need to assess diversity in the workforce, to ensure strategic use of human resources to meet strategic goals.

Business firms that manage diversity have a strategic advantage in the following ways:

(i) An organization or a company with well-managed diversity will resolve conflicts resulting from opposing approaches, in a complete and inventive solution.

(ii) An organization promoting equal employment opportunities for different groups will generally do better at attracting and retaining talent from all backgrounds, thereby increasing the pool of skilled employees. 

The differences between people are the different types of talents and attitudes. The wider the range of talents and attitudes among the employees, the better opportunities will be to make the business a success.

(iii) Businesses with a workforce from different backgrounds can more effectively serve customers, which are themselves diverse. Such employees can interact effectively with local customers and pay attention to the sensitivity and expectations of their customers,

(iv) Companies with a diverse workforce are better able to present their products and services.

(v) Companies with effective diversity programs may avoid lawsuits for damage to their corporate reputation or allegations of discrimination or cultural insensitivity.

(vi) Succeeding in today’s global marketplace demands a workforce with language skills, cultural sensitivity and awareness at the national level and other market differences. 

For example, multinational companies operate in different countries, where cultural practices differ. A workforce that can fit into the cultural understanding of the country where the multinational is operating is essential.