Work Diversity in Banks and Other Financial Institutions - Essay Example

Evidence Based HRM Report Name Institution Date Evidence Based HRM Report Option Two: Work Diversity in banks and other financial institutions Introduction Managing diversity at work and during recruitment is one of the greatest challenges that HR department and the management face within the workplace. According to Bassett-Jones (2005), diversity refers to the differences among individuals basing on age, race, religion, gender, ethnicity, sexual orientation, education, experience, disability and any other aspect used in distinguishing individuals. Han et al (2014) explains that firms that restrict the types of individuals they are willing to recruit end up limiting the talent pool from joining the organization. As a result, this form of discrimination ends up limiting the organizational productivity as well as forecasts for growth and survival. It is vital for management and HR department to promote a better working atmosphere and ensure that all individuals are treated fairly and justly basing on their performance and personal merit, regardless of their race, ethnicity, gender or age (Han et al, 2014). Therefore, a company to stay competitive, the company should recruit individuals with diverse skills, races, genders and ages. Additionally, it is important for the management to learn how to manage all workers fairly and engage them in the organizational culture (Hiranandani, 2012). This paper will focus on workforce diversity in the banking industry. Specifically, the paper will analyze current research on how other banks and financial institutions address diversity during recruitment and the benefits and risks associated with diversity in workplace. Finally, the paper will discuss areas that need improvement to ensure that there is diversity in the recruitment process. The paper will specifically focus diversity in banking industry as a whole. Context and Industry Information The banking industry has gone global and as a result human resource in the industry has become more mobile which has resulted to the presence of expatriate and local personnel working together, though under different working conditions (Wilson & Iles, 2000). The diversity in the banking industry is also as a result of political diversity and castle diversity. There are many financial institutions and banks that employ a high number of people with different forms of diversity. Adoption of diversity strategy in financial institutions promotes equal opportunities for all workers within the workplace (Kreitz, 2007). Accordingly, financial institutions that invest in diversity aim at creating economic benefits in the future and the benefits can be categorized in various groups, namely; long-term value, medium and short-term value (Hiranandani, 2012). Diversity is important in the banking industry because implementation of diversity within the financial institutions can decrease absenteeism, turnover, and the organizations do not lose talent or has diverse human capital. Workforce diverse also is advantageous to the economy in that diversity in the banking industry comes with creativity, efficiency and productive usage of human capital as well (Dwyer et al, 2001). There is also administration benefit which can be illustrated by the stable employment within the banking industry where any person regardless of their nationality, sexual orientation, gender, color, disability or any other individual characteristic is given an employment opportunity as long as one is qualified to contribute their workforce knowledge. Diversity in the banking industry also provides people with an opportunity to advance their professional life within the industry. On the other hand, consumers are able to get diverse products because the workforces that produce the products are diverse (Kreitz, 2007). Banking industry requires diverse personnel because it handles diverse customers as well as diverse products. In addition, banking industry has since globalised and therefore requires a diverse workforce that can address diverse needs of diverse customers (Hiranandani, 2012). As a result, this paper seeks to investigate diversity within the banking industry and other financial institutions. The paper intends to generally address the recruitment processes for employees working in banks and other financial institutions. The paper will tackle the whole banking industry as a whole for employees from all departments. Nature of the Problem Human resource management faces various challenges in managing diversity at workplace and these challenges vary with time. Diversity involves managing the increasing cultural diversity among the potential employees, as well as the diverse identities within the modern workplace. In the banking industry, several shortcomings with diversity have been identified because diversity comes with several benefits (Kreitz, 2007). In addition, failure to include diversity during the recruitment process can be considered as a form of discrimination. In addition, lack of workforce among employees has been viewed as reducing productivity in the workplace because diversity has been associated with benefits such as decreasing turnover and absenteeism, attracting talent and competent employees, improving creativity and innovation as well as bringing increased inclusion of all workers within the organizational structures. As a result, many banks and other financial institutions are focusing on recruiting visible minorities and expanding cross-cultural awareness as well as communication (Dwyer et al, 2001). Additionally, the current global urban banking setting is short of diverse workforce and as a result this ends up affecting banking products and customer satisfaction. This is because diverse workforce in banking industry can bring in diverse perspectives, experience as well as global and multicultural contacts; this is very important in improving organization efficacy and competitiveness (Ng &Burke, 2015). As a result, lack of diversity in the banking industry therefore contributes to narrow perspectives and inadequate multicultural contacts and this affects the overall efficiency and competitiveness within the industry. In addition, studies show that a diverse workforce ensures that the talent and creativity is maximized and also promotes innovation. This eventually results to increased proceeds as well as positive public image for successful banking industry. This hence means that lack of diversity within the banking sector and financial institutions can result to negative public image for the organizations which eventually impacts on the profits (Ng &Burke, 2015). Moreover, the pool of potential employees is filled with people from different cultural background and other diverse characteristics. In addition, the current world is full of people with diverse cultural backgrounds and multiculturalism. There is also visible discrimination among minority employees and people with diverse characteristics within the workplace (Subeliani & Tsogas, 2005). Therefore, even though human resource in different baking and financial institutions has been trying to ensure diversity in the recruitment process and also in the hiring process, there is still visible discrimination of various diverse groups in some financial institutions. The major contributing factor is that recruitment processes for personnel does not pay enough attention to workforce diversity and therefore the institutions miss many benefits that come with diversity (Kreitz, 2007). This paper intends to use literature review to collect evidence regarding the study topic. The literature review will involve retrieving literature and different journal publications from different databases. During evidence retrieval, the inclusion and exclusion criteria will include; only journal articles with relevance to the study topic will be included in the study. Review of the Evidence According to Subeliani & Tsogas (2005) the most important thing human resources in the banking industry and other financial institutions can do to promote a better work atmosphere is promoting diversity and treating individuals fairly regardless of their race, age, gender or sexual orientation. Therefore, in order to remain competitive global banks and financial institutions need to recruit individuals with diverse and different skills, races, ethnicities and genders (Wilson & Iles, 2000). Additionally, human resource managers should learn how to manage all staff members reasonably and involve them within the organizational culture. There are various banks that adopting measures and implementing strategies to ensure diversity within the workplace (Reskin & McBrier, 2000). Some of the banks that were identified as having implemented diversity policies include the Deutsche Bank and Barclays bank. For instance, Deutsche bank is dedicated to an inclusive culture that respects and embraces the diversity of the workers, customers as well as communities. In regard to diversity, Deutsche bank aims at attracting, developing and retaining the most skilled and capable workers from different cultures, experiences as well as different ethnicities, races, genders, education, sexual orientations, capabilities, and beliefs (Pena et al, 2014). Generally, diversity is fundamental to Deutsche Bank and the human resource and the management are required to promote an inclusive and respectful working atmosphere where all workers can be themselves, make the best contributions as well as succeed basing on merit. This is evident in many aspects. For example, the bank has implemented German gender quota requirement that puts requirements on the number of female employees that should be included during employee recruitment. The bank constantly puts efforts to improve and promote females within the workplace under the gender quota policy that came into being in Germany in 2015. For instance, in 2015, 35 percent of supervisory board members were females. In addition, the supervisory board has put legislations that there should be at least one woman as a member of the management board in the bank. This was attained when Sylvie Matherat was appointed as the chief regulatory officer to the board. There are also other big positions that the bank plans to ensure that women are included (Pena et al, 2014). Barclays bank is another bank that has forever promoted diversity in the workplace. Barclays ban is an international bank that is based in many countries worldwide. According to Ng &Burke (2015), the bank aims at recruiting diverse cultures to the management positions to ensure balance in the workforce. For example the management of the bank ensures that HR creates a recruitment process that vales and respects diversity and inclusion as well. The goal of the HR is to have a diverse workforce, expand competences as well as develop a diverse customer network. The bank also has a diverse culture that has guides actions and behavior of employees and hence this advances the bank’s common mission. According to Pena et al (2014) the diverse work setting at Barclays bank encourages partners to engage with each other and this makes workers to be more satisfied in their work which has led to higher success for the bank. Furthermore Kreitz (2007) presents various ways through which financial institutions and banks can ensure diversity in the workforce. The institutions need to understand the significance of diversity in order to transform the institutions into more powerful institutions. By embracing diversity, these institutions will be able to bridge the gap between various minorities, eradicate stereotypes within the workplace and understand that every individual has something unique and innovative that they can bring forth to the organizations (Kreitz2007). Eventually, financial institutions will end up having determined and productive creative workforce. The diversity ensures creativity in the organizations and also enables the institutions to reach higher demographic. For instance, a bank that only has Hispania male workforce has a likelihood of losing out many of their customers. This is because some groups such as women and African-American people may end up feeling they are not able to relate to the brand. In addition, the groups would feel like they are segregated and hence not be comfortable in the bank. As Koonce (2001) explains, having a workforce that consists of numerous various backgrounds enables customers to relate to the companies and offers them a sense of belonging. This is in line with the study conducted by Subeliani & Tsogas (2005) that established that multiculturalism is an extremely significant aspect within financial institutions in Australia, U.K, New Zealand, and USA as well. These areas have a high number of international migrants with diverse backgrounds. However, Pena et al (2014) found out that racial equality is a common major issue in banking and financial institutions within the U.S and South Africa where there have been a long history of the minorities such as blacks and other ethnic minorities being discriminated during recruitment and workplace as well. A study conducted by Shen et al (2009) established that in order to have workforce diversity, financial institutions should acknowledge that individuals differ in different ways which may be visible or invisible. The most common difference included age, gender, disability, ethnicity, racial, and religious differences (Wilson & Iles, 2000). Nonetheless, the major diversity issues within every country vary. For example, whereas gender inequality is the most common type of diversity issue worldwide, religion and ethnicity are common diverse issues in many workplaces, especially in India and Middle East. Another study found out that in China immigrants rarely get employment opportunities and also rural migrants are not given the same employment opportunities as the urbanities within the workplace (Reskin & McBrier, 2010). Findings and Implications The findings show that financial institutions and banks recognize diversity within the workplace as a business strategy that maximizes productivity and ensures creativity and innovation among the employees and as a result efficiently meets the needs of the customers (Kreitz, 2007). For example, it is evident that if a bank recruits employees from only one ethnic group, such a bank is likely to lose client from other minority groups because they would feel left out (Ng &Burke, 2015). In addition, findings show that when banks focus on recruiting diverse workforce, such institutions are likely to only recruit the most talented individuals, irrespective of their inclinations. By recruiting diverse workforce, organizations are able to have a greater pool of candidates and hence improve the odds of recruiting the best employees. Therefore, a diverse institution should put people first, irrespective of the ethnicity, religion, gender, sexual orientation, disability, among other factors (Hiranandani, (2012). According to the findings, workforce with diverse perspectives can assist organizations with a holistic insight of the market and identify new opportunities. Hiring and retention of important workers is an important factor among banking and financial institutions (Pena et al, 2014). Therefore, it is important for the human resources to create an environment where all workers feel included and valued. This ensures increased employee productivity and commitment (Reskin & McBrier, 2010). Conclusion and Recommendations This focus of the paper was on diversity within financial institutions and banks as well. Diversity has many benefits that include bringing a pool of talents to the workforce and also ensuring that creativity and innovation among employees. Evidence shows that different financial institutions have implemented measures to ensure diversity in their recruitment process and the workforce as well. For instance, Deutsche Bank and Barclays bank have implemented policies that ensure diverse recruitment. This is demonstrated for example where Deutsche Bank has implemented a policy that ensures that females are always included in the management positions and may other positions. However, there are many other financial institutions that do have the appropriate policies and measures to ensure diversity. As a result, the following recommendations have been suggested: The Human resource and the management should ensure that an equal opportunity environment is created. After the implementation of the policy, it should be ensured that the policy is published both internally and externally The human resource should ensure that job descriptions do not rule out any one. This means that job descriptions should be clearly formulated for all kinds of applicants and should not be discriminative in any manner Job openings and opportunities should be publicized and advertised in various venues to attract diverse workforce. For instance, the job openings can be posted online in various diverse platforms to ensure that diverse applicants get to know about the job opportunities The human resource along with the management should familiarize themselves with the current legislation. This is because this will ensure that the organizations will be aware of the latest discrimination laws and hence they will implement the appropriate diversity rules in order to avoid potential litigations References Bassett-Jones N. (2005). The paradox of diversity management, creativity and innovation. Creativity and Innovation Management. 14(2), pp. 169–175. Dwyer, S., Richard, O & Chadwick, K. (2001). Gender Diversity in Management and Firm Performance: The Influence of Growth Orientation and Organizational Culture. Journal of Business Research. 55(1), pp: 1–11. Han, J., Han, J., & Brass, D. J. (2014). Human capital diversity in the creation of social capital for team creativity. Journal of Organizational Behavior. 35(1), pp: 54-71. Hiranandani V. (2012). Diversity Management in the Canadian Workplace: Towards an Antiracism Approach. Urban Studies Research. 1(1), pp: 1-12. Kreitz P. (2007). Best Practices for Managing Organizational Diversity. Stanford: Stanford University. 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Managing Diversity in the Netherlands: A Case Study of Raboank. International Journal of Human Resource Management. 16(5), pp: 831–851. Wilson, E.M & Iles, P.A. (2000). Managing Diversity – An Employment and Service Delivery Challenge. The International Journal of Public Sector Management. 12(1), pp: 27–49. Read More