¶ … Diverse Workforce Today, there are nine billion people in the world living in more than 200 countries and the need for informed approaches to the management of a diverse workforce have never been greater. Effectively managed, a diverse workforce can create a wide range of beneficial outcomes for organizations. Although many observers champion a diverse workforce because of the numerous benefits that are possible, the research will show that there are a number of challenges to the effective management of a diverse workforce that must be overcome in order to achieve the intended outcomes. To determine the facts, this paper provides a review of the relevant literature to evaluate the benefits and challenges of having a diverse workforce. A summary of the research and important findings concerning these issues are presented in the conclusion.

Review and Evaluation

How can diversity in age, gender, ethnicity, skills, background etc. influence social cohesion and group and organizational outcomes?

The concept of a "diverse workforce" includes several aspects that are not reflected in the term. For instance, according to Mor Borak (2009, p. 339), "The concept of 'the inclusive workplace' refers to a work organization that is accepting of the diversity of its own workforce, is active in the community, participates in state and federal programs, and collaborates across cultural and national boundaries." These are valuable outcomes, but in many cases, the more diversity that is involved, the more difficult it becomes to achieve them. In this regard, Neault and Mondair (2011, p. 73) emphasize that, "Workplace diversity can have negative effects, including increased conflict between groups, poorer performance, and lower job satisfaction for some." Unfortunately, these negative outcomes are not the only problems that a diverse workforce can cause. For instance, Neault and Mondair (2011, p. 73) add that, "Diversity creates social divisions, especially when some groups are singled out and labeled as diverse (i.e., when specific subgroups are the targets of diversity initiatives)." Clearly, divisiveness in the workplace is undesirable, and there is a growing recognition that diversity issues are becoming increasingly important as discussed further below.

Why are diversity issues gaining more importance?

One of the main reasons diversity issues are gaining importance is the proliferation of recent information concerning the need to more effectively manage workforce diversity in an increasingly multicultural society and globalized marketplace. For example, according to Fine (2008, p. 485), "Cultural diversity in the workplace is currently a hot topic. Only ten years ago, virtually no books were available on the topic, and journal articles were just as rare." By sharp contrast, diversity issues are gaining increasing importance today for a number of other reasons as well, including their impact on the organizational performance (Kochan, Bezrukova, Ely, Jackson, Joshi, Jehn & Thomas 2003). In this regard, Fine (2008, p. 485) emphasizes that, "Today, hardly a day goes by that a national newspaper or magazine does not run a story on some aspect of the increasing diversity of the U.S. workforce, such as the changing demographics of the U.S. population, immigration policy, and the debate over affirmative action programs."

Indeed, these trends clearly point to one inevitable eventuality that distinguishes organizations in the 21st century from those in the past. As Hopkins and Hopkins point out, "The workforce of most U.S. corporations will display only one major characteristic in the near future: diversity. The workforce of these corporations will be a technicolor tapestry of ethnicity, gender, age, attitudes, cultures and races." These assertions are supported by the current demographic breakdown of the American population which is set forth in Table 1 and depicted graphically in Figure 1 below.

Table 1

Demographic Breakdown of the United States

Category

Percentage of Population

White

79.96%

Black

12.85%

Asian

4.43%

Two or more races

1.61%

Amerindian and Alaska native

0.97%

Native Hawaiian and other Pacific islander

0.18%

Source: CIA World Factbook 2013 at https://www.cia.gov/library/publications/the-world-factbook/geos/us.html

Figure 1. Demographic Breakdown of the United States

Source: Based on CIA World Factbook tabular data

An important point concerning the above breakdown is that although Hispanics now represent the largest minority in the U.S., the U.S. Census Bureau does not provide a separate category because the Census Bureau regards Hispanic to mean persons of Spanish/Hispanic / Latino origin including those of Mexican, Cuban, Puerto Rican, Dominican Republic, Spanish, and Central or South American origin living in the U.S. who may be of any race or ethnic group (white, black, Asian, etc.); about 15.1% of the total U.S. population is Hispanic (U.S. population 2013)

Diversity issues are also gaining importance because these trends affect all aspects of doing business. In this regard, Baugher and Varanelli (2000, p. 391) report that, "The impact of increased workforce diversity touches virtually all management concerns. The diversity literature includes a large number of areas of inquiry including the impact of diversity on communication-oriented outcomes,...

61) as being "voluntary organizational actions . . . designed to create greater inclusion of employees from various backgrounds into formal and informal organizational structures through deliberate policies and programs." This concise definition has since been expanded to include a wider rang of diversity issues (Watson & Spoonley 2009). In this regard, Kreitz (2008, p. 106) emphasizes that, "Twenty-first century organisations are living with and being challenged by diversity of three levels - an increasingly diverse workforce, a multicultural customer base, and a growing challenge for market share from international competitors."
In this environment, it would appear reasonable to suggest that organizations should carefully focus on their diversity management process because there is no turning the clock back and things are going to be different in the future. For instance, Wyatt-Nichol and Antwi-Boasiako (2012, p. 749) emphasize that, "As employees increasingly represent a wide variety of different backgrounds and preferences, human resource practitioners have come to view diversity management strategies as critical for the effective performance of organizations." This increasing recognition of the importance of diversity management is also due in part to the numerous benefits that can accrue and these issues are discussed further below.

What benefits does effective diversity management have for employees and for employers?

Despite the challenges that are involved, there is a growing consensus that a diverse workforce can provide a wide array of benefits to organizations of all types and sizes (Joplin & Daus 1997). One interesting issue that quickly emerges from the research, though, is that notwithstanding the numerous benefits that can accrue to a diverse workforce, these benefits do not just fall out of the sky and they are inevitably countered by some significant constraints and challenges. For instance, according to Gudmonson and Hartenian (2002, p. 27), "While it would seem that hiring a diverse workforce would be advantageous to any firm that wants to compete globally, such diversity in fact entails costs as well as benefits for the small firm." Despite the challenges that are involved, a growing number of organizations of all sizes and types are taking steps to improve their management of workplace diversity based on the potential opportunities for improved future growth and to achieve a competitive advantage (Ogbonna & Harris 2006). According to Panaccio and Waxin (2010, p. 53), "The advantages of a diverse workforce, representative of today's society, are numerous. First of all, a diverse workforce allows better service to customers, who are diverse as well, and it enhances the image and the credibility of the organization."

A study by D'Netto and Sohas (1999) concerning the importance of effective diversity management identified the means set forth in Table 2 and depicted graphically in Figure 2 below for responses to survey questions concerning the major benefit of effective diversity management.

Table 2

Means of responses concerning the most significant benefit of effective diversity management

Category

Mean

Managing cultural diversity can create a competitive advantage

4.85

Full participation of all individuals

4.72

More innovative solutions

4.62

Better customer service

4.56

Highly motivated employees

4.54

Higher productivity

4.46

More diverse options in decision making

4.40

Higher morale

4.35

More satisfied employees

4.33

Less internal conflict

4.17

Lower turnover

4.03

Source: D'Netto & Sohas 1999

Figure 2. Means of responses concerning the most significant benefit of effective diversity management

Source: Based on tabular data in D'Netto & Sohas 1999

Beyond the foregoing, the research to date confirms that a diverse workforce can also increase productivity, facilitate innovation and resolution of problems (Panaccio & Waxin 2010). Conversely, a workforce that fails to mirror the society in which it operates will likely result in less than optimal organizational performance (Panaccio & Waxin 2010). As Panaccio and Waxin (2010, p. 53) emphasize, "In any case, understanding and managing diversity is crucial for organizations, given the current changes in the cultural and ethnic attributes of the workforce." In addition, besides the foregoing benefits for employees and employers, effective diversity management can help improve organizational recruitment, retention and creativity as discussed further below.

Why is diversity management important for recruitment, retention, creativity etc.

As noted above, organizations that hire workforces comprised of substantially different demographic background from the societies in which they compete run the risk of suboptimal performance (Panaccio &…