Changing Workforce Demographics - Case Study Example

Evaluating US Companies’ Support for Diversity: Changing Workforce Demographics Three things have swayed US businesses into changing and correcting their organizations: technological revolution, globalization, and changing workforce demographics. As the US workforce is undergoing significant changes that require major alterations in how they deal with their human capital. One of the most significant demographic trends facing companies today is increasing workforce diversity. Changing workforce demographics mean that work teams can be diversified in terms of gender, race, ethnicity, national origin, area of expertise, and organizational affiliation on an increasing level. As the US workforce is becoming increasingly diverse in race, gender, age, culture, family structures, religion, and educational backgrounds, the US business sector is trying its best to manage some transformations that regard their human capital. Although nearly three-fourths of the U.S. population is still classified as white, that’s changing fast. By 2050 whites will represent only 53 percent of the U.S. population. Hispanics will make up about 24 percent, African Americans 14 percent, Asian Americans 8 percent, and Native Americans 1 percent. Managing this changing mixture of ages, faces, values, and views poses a gargantuan challenge. A diverse workforce brings with it a wide range of skills, traditions, backgrounds, experiences, outlooks, and attitudes toward work that can affect individuals’ job performance. Moreover, a diverse workforce brings language and communication challenges (Bovee, Thill & Schatzman, 2003). According to Bovee, Thill & Schatzman (2003), there are two trends contributing to the diversity of the U.S. workforce: 1. Influx of Immigrants – Immigrant, whether legal or illegal, now make up about 13 percent of the nation’s workers, the highest percentage since the 1930s. They dominate job categories at both ends of the economic spectrum. Many work in jobs that native-born Americans prefer not to do—such as meatpackers, hotel maids, hamburger flippers, waiters, gardeners, seamstresses, and construction workers. Others fill the U.S. demand for nurses, doctors, scientists, and teachers. The influx of immigrants to the United States is expected to continue and will help hold down wages in unskilled jobs in addition to providing companies with the numbers of employees they need to expand. 2. Aging Population – The population in the United States is aging, a situation that creates new challenges and concerns for employers and employees alike. About 84 percent of baby boomers participate in today’s labor market. Experts predict that because of inadequate pensions, high medical costs, and a general desire to stay active, many baby boomers will put off retirement until they are in their seventies. At present, most companies remain largely indifferent to changing corporate America's predominantly white status quo. But gradually, it is reassuring to know that some 300 or so companies that are aggressively pursuing diversity initiatives. They include companies such as General Motors and Starwood Hotels that have excelled at seeking out and doing business with black suppliers, many of which are represented on the Black Enterprise Best Companies for Diversity list of the nation's largest black-owned companies. To make the BE Best Companies for Diversity list, a company must demonstrate significant representation of African Americans and other ethnic minorities in four key areas: corporate procurement, corporate boards, senior management, and the total workforce. Others, such as Xerox Corp. and FedEx Express, are among the very best at bringing talented people of color into the senior management ranks of their companies, while PG&E and Marriott International are among those that have excelled at African American board representation. And when it comes to workforce diversity, corporations such as McDonald's Corp. and Verizon are old hands (Black Enterprise, July 2005). As companies venture in a global environment in the Information Age, human resource management has become more important, largely as a result of its role in providing competitive advantage, the rush to competitiveness, and an awareness of the demands of the technologically advanced environment of the future. Organizations like McDonald’s try to achieve competitive advantages for each business they are in. A competitive advantage can be defined as any factor that allows an organization to differentiate its product and service from those of its competitors to increase market share. Organizations can accomplish this aim in one of two ways: through cost leadership or diversifying their workforce. With these, an organization provides the same services or products as its competitors, but produces them at a lower cost. By doing so, the organization earns a better return on its investment in capital and human resources (Sims, 2002, p. 24). For instance, McDonald's heralds itself as “the world's community restaurant”. The company is proud to state its long-standing commitment to a workforce that is diverse. This is because the company believes in developing and maintaining a diverse workforce that will strengthen the McDonald's system. Diversity at McDonald's is understanding, recognizing and valuing the differences that make each person unique. As a leading global quick-service restaurant with more than 30,000 restaurants in 119 countries, the creator of the Big Mac is most impressive in employee diversity. More than half of the McDonald's staff – from crew members to the COO – belong to an ethnic minority group (McDonald’s Website). As companies continue to expand worldwide, human resource leaders are finding that a one-size-fits-all global solution to promote diversity that does not exist. According to Kurt Fischer, Vice President Business HR. and Diversity Officer of Corning Incorporated, HR managers often find that basic HR functions--compensations. benefits, staffing – no longer support their company’s business strategy. Leaders today are faced with the challenge of rethinking and restructuring how they will deliver HR services – and on a global basis. He suggested transforming HR globally through Centre of Excellence Approach (Stopper, 2003). According to Fischer, the Centre of Excellence approach provides content experts within the HR organization who focus on meeting strategic business needs. For example, a company's HR functions may be aligned with its businesses on paper but not in practice. This disconnect can be addressed through a Centre of Excellence approach, which provides content experts within the HR organization who focus on meeting strategic business needs. These experts serve as consultants to corporate business divisions and develop customised HR products and services to support business issues. For the Centre of Excellence approach to be effective, it should map to three levels of HR transformation: strategic, operational, and foundational. On the strategic level, HR leaders must work to define key HR objectives and a new value proposition with their client business divisions--in effect, changing HR’s positioning in the organization. A non-threatening way to accomplish this task is to participate with business divisions in developing their annual business strategy, and then craft an HR strategy to help each division meet its business goals. HR leaders must transform the organization's HR foundation, addressing core "people" elements of its change. Flexible networks of HR staff should be established to work cooperatively toward shared workforce management goals. A formalized HR reporting and organizational relationship system should be developed, and key HR performance requirements, accountabilities, and competencies defined. This right mixture of diversity is said to provide a wide-array of solutions to various problems and situations. On the other hand, it is also a venue for introducing conflict and disagreement. Teams in the work environment emerge to attend to tasks or solve problems that are beyond the capacity of an individual. It is this type of set-up that allows for the creative and innovative juices to flow through the constant sharing of information. The proper division of labor among the members of the team can lead to a speedier, more efficient and less stressful workplace. Their high levels of performance with regards to quantity, quality, and timeliness of work results can contribute to their sense of satisfaction, addressing a psychological and motivational need. With continuous exposure to one another, the team members and their superiors can thus determine whether they have a team that can continue working together with synergy or their togetherness poses a detrimental effect on their output and interrelationships (Hunt, Schermerhorn & Osborn, 2003). Diversity in a team, in the long run, leads to increased effectiveness. The combination of people with different backgrounds, varied skill sets, and unconventional flow of thinking, has been proven to result in a positive change in organizational culture. Anne Schauber’s study (2001) states that if a team’s performance is duly rewarded by the organization, a culturally diverse organization “may be more economical in the long run” and “will result in better service to a changing clientele”. “It enhances the creativity and problem-solving capabilities of the organization” in such a way that the “previously untapped talent and energy will be focused on achieving organizational goals” (Schauber, 2001). Thus, diversity has become a positive contributing factor to the achievement of the goals of a high performance teams. References Black Enterprise. (2005, July). The 30 Best Companies for Diversity: When it Comes to Minority Representation, These Corporations Mean Business. Earl G. Graves Publishing Co., Inc. 35(12): 112. Bovee, C. L., Thill, J. V. and Schatzman, B.E. (2003). Business in Action. New Jersey: Prentice-Hall – Pearson Education Company Hunt, James G., Schermerhorn, J. R. Jr., and Osborn, R. N. (2003). Organizational Behavior, 8th edition, New York: John Wiley & Sons, Inc. McDonald’s Diversity. McDonald’s Website. Retrieved 10 April 2006 from http://www.mcdonalds.com/corp/values/diversity.html Schauber, A. C. (2001). Effecting Extension Organizational Change Toward Cultural Diversity: A Conceptual Framework. Date Retrieved April 10, 2006. Journal of Extension, 39 (3) from http://www.joe.org/joe/2001june/a1.html Sims, R.R. (2002). Organizational Success through Effective Human Resources Management. Westport, CT: Quorum Books. Stopper, W. G. (2003). Current Practices. Human Resource Planning, 26(2): 5. Read More