GAINING COMPETITIVE ADVANTAGE: by In its "Best Practices in Achieving Workforce Diversity" study, the U.S. Government's Taskforce on Diversity pointed out that the recruitment and retention of an ever increasing diverse workforce will be the key for organizations to gain an advantage over competitors. Recruiting and retention will be necessary for developing innovations and to find new business and market opportunities. Successful recruitment, retention, and marketing in an environment of both changing domestic demographics and increasing globalization will be critical in improving productivity, organizational effectiveness, and a sustained competitive advantage. The main components of the “case for diversity” are : 1. Changing Demographics A few statistics will point out the nature the of the changing demographic environment that will provide the context for both recruitment and retention.( for more demographic information, see the demographic information in this Resource Center 's Case for Diversity section): Percentage of U.S. Population
Note: The April 1, 2000 Population Estimates base reflects changes to the Census 2000 population from the Count Question Resolution program and geographic program revisions. Dash (-) represents zero or rounds to zero. (X) Not applicable. Abbreviations: Black = Black or African American; AIAN = American Indian and Alaska Native; NHPI = Native Hawaiian and Other Pacific Islanders Derived from Table 3: Annual Estimates of the Population by Sex, Race and Hispanic or Latino Origin for the United States : April 1, 2000 to July 1, 2004 (NC-EST2004-03). Source: Population Division, U.S. Census Bureau. Release Date: June 9, 2005 The increasing diversity of the population can be clearly seen in large urban areas in which the white share of the total population has dropped since 1990. Table 1. 18 of the Top 100 Cities Went from Majority White to Majority Non-white Between 1990 and 2000
In some parts of the country, "minorities" will form the majority of the population. For example, by 2010, White, non-Hispanic Americans will be only 33.3 percent of the California population, while Hispanic Americans alone will be 42 percent. The average age of employees will also increase as the wave of baby boomers enters their middle years. These changes in demographics will change the nature of recruitment of new and retention of existing employees as well as the markets to which companies will need to sell products and services. 2. Changing Composition of the Workforce As the following chart indicates, demographic changes in the population at large will have a significant effect on the composition of the American workforce with more and more of the workforce composed of Hispanics and non-Whites. PROJECTED CHANGES IN THE ETHNIC COMPOSITION OF
THE AMERICAN WORKFORCE
The Workforce 2020 study projects that by 2005 all minorities, including minority women, will make up 51 percent of net new entrants to the workforce. Looking at women alone, all women (minority and White) will make up 62 percent of new entrants. (Net new entrants to the workforce are calculated as total entrants to the workforce minus those leaving it). These domestic changes affecting the workforce will be reinforced by similar demographic changes world-wide that will increase the number of immigrants needed to fill the workforce needs of a growing United States economy. (see, Structure of the International Labor Market Demographic changes will alter significantly the composition of the population as a whole and of the workforce. In addition, these changes will have a major affect on who has "buying power" and the definition of the markets that will provide growing business opportunities. In order for companies to fill positions in the foreseeable future, they will need to attract minorities. This means not only finding access and providing information to minority populations, but also to demonstrate an organizational environment that will welcome and support a diverse workforce. Women and people of color will represent the majority of new entrants to the U.S. workforce by 2005. Recruiting experts point out that the best and the brightest of these prospective new employees will work for companies that recruit through creating programs for multiethnic students, affiliations with multicultural organizations, and active campaigns on job sites aimed at diverse candidates. Estimates of the cost of replacing an employee vary, but a good rule of thumb is that replacing an employee costs four times that worker's salary. These costs include such factors as the time involved in recruitment, hiring, and training, as well as the dollars lost to production while the position is unfilled. Such calculations, moreover, do not take into account the costs of lost accumulated company knowledge and the current and future potential of contribution of the employee who has left. If turnover is high, poor morale also increases the real cost of attrition. 3. Multicultural Buying Power The buying power of minority groups has increased substantially over the last 10 years and is projected to increase even further. PROJECTED TOTAL BUYING POWER
PROJECTED COMBINED BUYING POWER OF AFRICAN AMERICANS,
Information from the Selig Center 's report, 3. Globalization Domestic demographic changes have already changed who organizations must recruit and retain, what strategies they must adopt to improve productivity, and changes they need to make to for more effective marketing. Another feature of the 21st Century that will affect organizations just as much as changes in domestic demography will be the need to learn how to be effective in global competition for the best workers and in successfully capturing significant shares of global markets. More and more businesses of all sizes now play in the global marketplace and must become effective global competitors. 4. Productivity & Perspective Diversity in the broadest sense, incorporating not only different ethnic, cultural, and religious groups into the workplace, but also respecting all differences, can be a lens through which new ways of thinking about products, markets, and innovation can develop. Moreover, high productivity increasingly depends on effective functioning teams. The best teams generate the most cohesion and respect for other team members, are not afraid to risk putting forth ideas and striving for better practices and innovation. Creating and sustaining such teams is made much more difficult by misunderstandings and conflicts involving cultural differences. Furthermore, teams that bring together varied experiences and perspectives have a higher probability of being more creative and innovative. In any case, as the workforce becomes more diverse so will teams on which organizations depend for high productivity and effectiveness. As quoted in the Best Practices Study (see The Case for Diversity section of the Resource Center ), John Pepper, CEO of Proctor and Gamble stated that the success of his company " is a direct result of our diverse and talented workforce. Our ability to develop new consumer insights and ideas and to execute in a superior way across the world is the best possible testimony to the power of diversity any organization could ever have."
|