Workforce Diversity Has a New Meaning

January 23, 2014 by Susan Galer

Photo: Shutterstock

Photo: Shutterstock

Economic recovery in 2014 may be uncertain, but the battle for top talent is heating up for organizations intent on expansion. According to a newly-released report from The Economist Intelligence Unit (EIU), human resources (HR) executives see workforce diversity as an important growth strategy, driving customer and employee satisfaction.

But this is diversity with a twist. It’s no longer just about gender, race, or ethnicity. Differences in workplace values, like work ethic, communication styles, and motivational drivers are now considered part of workforce diversity. For example, when asked about workforce characteristics that will require the greatest change in HR strategies over the next three years, almost 60 percent of HR executives cite employees’ lack of interest in assimilating organizational values. Over 50 percent point to conflicting values across a multigenerational workforce, and 47 percent mention unrealistic expectations of millennial employees.

Over 200 HR executives take part in EIU survey

The EIU report, “Value-based diversity: The challenges and strengths of many,” was sponsored by SuccessFactors, an SAP company. Its findings are based on a global survey of 228 HR executives in Europe, North America, Asia-Pacific, the Middle East, Africa, and Latin America. More than half were C-level executives or board members. Fifty percent hailed from companies with revenues up to USD$500m and 25 percent have revenue of USD$5bn or more. Highlights of the findings are summarized below, and the complete report can be downloaded here.

Next page: Millennial values and behaviors spark management change

While 83 percent of surveyed executives agree a diverse workforce improves their company’s ability to capture and retain a diverse client base, almost the same percentage (80 percent) believe that strategic changes are needed to accommodate younger employees in the workplace.

To attract and retain the best of the next generation of workers, experts advise decoding their expectations and motivations. Tamara Erickson, a workforce researcher and author, says millennials “want enough [money] to do what they want, but not necessarily more. Most CEOs don’t get this. They got where they are by placing a high value of money and regarding it as proof of their success. So they perceive millennials as not motivated instead of recognizing that they are actually highly motivated, but by different things.”

Implications for HR strategy vary by region

Eighty-two percent of EIU survey respondents agree that a strategic approach to managing diversity can help access a rich talent pool. But there are major regional differences in the challenges companies face. Executives in Asia-Pacific consider language and generational issues the most difficult. Jane Horan, a Singapore-based diversity consultant, explains, “Many organizations expect people to have traditional group-oriented values, but young people here come from a culture of mash-ups. They’re used to taking images and refashioning them for their own purposes. They still have a strong collective sense, but it is tempered by a peer culture in which self-expression and flexibility are primary values.”

Next page: Workplace diversity is less strategic in Western Europe than the U.S.

In the Middle East, gender and cultural issues are paramount and are often enforced by social mores, cultural expectations, and legal constraints. On the other hand, African respondents cited training and education as their biggest concerns.

In Western Europe, respondents value diversity more than other regions, but say there’s less recognition of that across non-HR senior management. Michael Stuber, a Cologne-based diversity consultant and author, credits this to the origins of diversity. Diversity initially surfaced in the United States as part of a compliance-driven agenda. In Europe, where anti-discrimination laws were enacted much later, diversity is primarily perceived as a social initiative. As a result, Stuber says diversity is much less strategic in Western Europe, hence the purview of middle managers.

Opportunity and flexibility are crucial management components

The EIU survey reveals numerous ways that companies are changing how they motivate, develop, and retain diverse workforces. Forty-seven percent are mentoring new and high-potential employees, and 45 percent are exposing high-potential employees to diverse business situations. Horan finds that companies are offering international postings to high-potentials earlier in their careers, not only in Asia, but worldwide. “I see this in consumer products, technology, and energy firms,” she says. “Of late, there is much discussion of assignment in Africa, and jobs that encompass Asia, the Middle East, and Africa. These are incredibly rich and expansive roles with broad reach that required adaptable leadership skills.”

Next page: Almost half of surveyed companies offer employees flexible work arrangements

Flexible work arrangements are important, too, with 43 percent of surveyed companies now offering employees this option. Johnna Torsone, Chief HR Officer at Pitney Bowes, explains the findings from a study that her company commissioned with the Wharton School of Business. “Our study showed that diverse teams were more creative, produced more solutions, and were far more adept at ‘thinking outside the box.’ It also found that diverse teams were more difficult to manage, requiring greater flexibility and cultural sensitivity on the part of leaders.”

Millennials’ values can create greater opportunities

Millennials are literally moving the business world forward, propelled by different values that promise greater opportunities for themselves and their organizations. Companies able to crack the new code of workforce diversity are the ones likeliest to be around for a long time to come.

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