What is Diversity Management?
Diversity management refers to organizational actions that aim to promote greater inclusion of employees from different backgrounds into an organization’s structure through specific policies and programs. Organizations are adopting diversity management strategies as a response to the growing diversity of the workforce around the world.
Advancements in technology now allow companies to hire and manage employees from around the world and in different time zones. Companies are designing specific programs and policies to enhance employee inclusion and promotion, and retention of employees who are from different backgrounds and cultures. The programs and policies are designed to create a welcoming environment for groups that lacked access to employment and more lucrative jobs in the past.
The concept of diversity started in North America in the mid-1980s, spreading to other parts of the world afterward. Then United States President, Ronald Reagan, originally vowed to dismantle the equality and affirmative action laws that were viewed as legal constraints. Equality and affirmative action employees presented the argument that diversity management should be seen as a competitive advantage to US companies rather than as legal constraints.
The discussion attracted research into the concept of diversity and the benefits of diversity management. The globalization of the world economy and the spread of multinational corporations brought a new twist into the concept, in that diversity management does not solely refer to the heterogeneity of the workforce in one country but to workforce composition across countries.
Types of Diversity Management
The following are the two types of diversity management:
1. Intranational diversity management
Intranational diversity management refers to managing a workforce that comprises citizens or immigrants in a single national context. Diversity programs focus on providing employment opportunities to minority groups or recent immigrants.
For example, a French company may implement policies and programs with the aim of improving sensitivity and providing employment to minority ethnic groups in the country.
2. Cross-national diversity management
Cross-national, or international, diversity management refers to managing a workforce that comprises citizens from different countries. It may also involve immigrants from different countries who are seeking employment.
An example is a US-based company with branches in Canada, Korea, and China. The company will establish diversity programs and policies that apply in its US headquarters, as well as in its overseas offices.
The main challenge of cross-national diversity management is that the parent company must consider the legislative and cultural laws in the host countries it operates in, depending on where the employees live.
Characteristics of Diversity Management
Unlike legislation that is implemented through sanctions, diversity management is a voluntary organizational action. It is self-initiated by organizations with a workforce from different ethnicities, religions, nationalities, and demographics. There is no legislation to coerce or government incentives to encourage organizations to implement diversity management programs and policies.
2. Provides tangible benefits
Unlike in the past when diversity management was viewed as a legal constraint, companies use the diversity strategy to tap into the potential of all employees and give the company a competitive advantage in its industry. It allows each employee, regardless of his/her race, religion, ethnicity, or origin to bring their talents and skills to the organization. A diverse workforce enables the organization to better serve clients from all over the world since diverse employees can understand their needs better.
3. Broad definition
While legislation and affirmative action target a specific group, diversity management uses a broad definition since the metrics for diversity are unlimited. The broad definition makes diversity programs more inclusive and has less potential for rejection by the members of the majority group or privileged sections of the society.
Best Practices of Diversity Management
Organizations can implement these best practices to maintain a competitive business advantage and also capitalize on the potential of its diverse workforce. The following are the best practices that an organization can implement:
1. Commitment from top management
Workforce diversity can succeed if it is adopted by a shared vision within the company’s top management. The senior executives of an organization are responsible for policy formulation, and they can promote or eliminate workplace diversity depending on the policies they make. When the senior management fails to show commitment to implementing the diversity strategies, the diversity plan becomes severely limited.
2. Identify new talent pools
In an organization where more people are leaving the workforce than are being hired, management must immediately employ fresh talents. Most companies prefer traditional new-employee sources, such as competitor organizations and graduate schools, to recruit the best talent.
Companies should look beyond the traditional new-hire sources and explore other talent pools, such as veterans exiting the military, minority groups, and talents from other regions or countries. Hiring individuals with diverse skills and knowledge can help companies to deliver better quality services to a global client base.
3. Provide a safe avenue for dialogue on diversity-related issues
Organizations should create resource groups where employees from similar backgrounds can connect and communicate their concerns in a safe environment. People from minority groups often feel isolated from organizations and may, therefore, increase employee turnover.
Creating avenues for mentorship, networking, and socializing helps to increase employee engagement and performance levels. Successful staff members can demonstrate how they found success within the organization and mentor new staff members.
4. Make diversity part of the company’s objectives
An organization that practices workforce diversity should not shy away from letting the world know that the organization embraces diversity and works with people from all backgrounds. The organization can start by encouraging and supporting its staff who volunteer in different causes such as a disability walk or an HIV/AIDs awareness forum.
It can sponsor fund drives to raise funds to support vulnerable and underrepresented populations. The organization can also offer internships and scholarships to minority groups.
5. Distinguish between diversity and affirmative action
Various governments around the world have implemented affirmative action programs to provide opportunities for women and other minority groups. While such affirmative actions complement diversity, organizations should make a distinction between affirmative action and diversity.
Diversity is proactive rather than reactive, and it requires a change in the organization. People from diverse cultures, backgrounds, and beliefs bring a range of work styles, thoughts, and perspectives that an organization can use to improve efficiency and encourage creativity in product development.
Thank you for reading CFI’s guide to diversity management. CFI offers the Certified Banking & Credit Analyst (CBCA)™ certification program for those looking to take their careers to the next level. To keep learning and advancing your career, the following CFI resources will be helpful: