2  Diversity in the Workforce

Facts and Figures

Diversity in the US Workforce

The formation of the working class in the US was complicated by the influx of immigrants from the nineteenth century to the present, which was led by ethnic differences and ‘ethnically hybrid’ cultures distinguished by class. The consecutive waves of migration over 200 years brought their own cultures, languages and organisations. By the middle of the nineteenth century, some industrial workers demanded better wages and shorter hours to make the US more egalitarian. Between the 1880s and mid-1920s, more than 25 million ‘new immigrants’ arrived and joined the earlier generations in the US. Further, internal migrants brought millions of African American and Mexican workers with their families to join the industrial communities, thereby forming the contemporary American working-class population. While some communities lived in ‘ethnic ghettos’, others seemed to be physically integrated, yet culturally segregated, having their own ethnic cultures and institutions, and mixing with other ethnic groups (Barrett 2016). The historical data shown in Table 2.1 indicates that the level of ethnic diversity in the US has been steadily increasing since the 1960s. While the share of white population was 84% in 1960, it had decreased to 62% in 2015. In the same period, all other ethnicities have increased their shares in the US population. The two ethnicities that have shown very high levels of increase in the US population have been Hispanics and Asians, whose share increased from 3% to 19% and from 0.6% to 6%, respectively, from 1960 to 2015.

Organisations in the US are dominated by middle-aged white heterosexual men, and it is essential to create a more diverse workplace, as organisations would benefit from a wider range of personnel. AA, which started over 40 years ago, has been one of the driving forces in increasing diversity, with the purpose of improving employment and educational opportunities for specific groups, including women, ethnic minorities and people with disabilities. AA has achieved many changes in the public sector and military; however, it has been unsuccessful in education, with a number of disadvantaged students still unable to access adequate resources. Private-sector organisations tend to follow their own policies, yet can still be sued through anti-discrimination laws for failing to give individuals’ fair opportunities (ATMA Global 2014).

Table 2.1 Occupation Distribution of Recently Arrived Immigrants in the US

Globalisation, migration and social justice have affected the representation of diverse groups in organisations, especially in the US, where the demographic diversity of the workforce has greatly increased. Implemented policies—included AA and EEO—seem to have helped underrepresented groups gain access to some jobs from which they were previously excluded (Tsui and Gutek 1999). The election of the first African American president in the US in 2008 proved that American’s painful history of racial subjugation can be overcome, with President Barack Obama becoming the most diverse president in American history. However, diversity exists in the people’s imagination, yet many men and women of colour have attained great business success and made significant contributions to their various positions held in organisations.

In the mid-1990s, research showed that white people were more favoured in the workplace than black people. Regarding the promotion of 1,268 managerial and professional employees, black and Asian people were rated lower than white people (Reed 2011). In addition, female employees were rated lower than male employees by managers. The fact that one-third of the Fortune 100 firms have struggled with this issue since 1995 indicates that race is still a main factor in promotions. In 2009, the female executive officers at Target represented 30%—the highest proportion of women in the white group of companies (Reed 2011). In 2009, about 8% of the white executive officers in the Fortune 100 companies were born in Canada, Europe or the Middle East, and brought with them the attraction of international markets (Reed 2011). These findings reveal that some organisations are not interpreting diversity as a melting pot, but as a smorgasbord to choose what they need and ignore the rest. As an employment concept, diversity has failed to solve white job segregation at the top level of organisations. As a result of globalisation and expansion into foreign countries, organisations recruit the right people who can speak the necessary languages and know how to respond to foreign markets. Organisations view diverse people as enormous assets to gain market superiority through local knowledge, experience and language ability, and these qualities have helped these people climb to the highest leadership ranks in organisations (Reed 2011).

The fact that the US workforce is becoming more diverse is an indication of the importance of diversity to the economy and society. As of June 2012, people of colour comprised 36% of the US labour force. To break the working population into race and ethnicity, about 99,945,000 (64%) in the labour force are non-Hispanic white, 24,679,000 (16%) are Hispanic, 18,775,000 (12%) are African American and 8,202,000 (5%) are Asian. About 4,801,000 people (3%) in the labour force are not identified in any racial or ethnic categories. It is anticipated that the proportion of people of colour will increase as the country becomes more racially and ethnically diverse. Census data reveal that, by 2050, there will be no racial or ethnic majority in the US. Additionally, between 2000 and 2050, new immigrants and their children will form 83% of growth in the working-age population. Of Hispanics in the labour force, the rate stands at 58% for men and 42% for women. For African Americans in the labour force, the rate is 53% for women and 47% for men (Burns, Barton and Kerby 2012). While attempts to attain racial equality in the US have caused ethnic mixture in several organisations, there is still more work to be done in this area. As late as the 1980s, black workers were only employed in low-paying manual jobs. However, greater racial diversity does not denote equal opportunities or equal pay. Inequality arises from education levels, yet this trend is slowly changing (ATMA Global 2014).

These data indicate that the diversity of the US population is naturally reflected in the diversity of the US workforce, which is one of the world’s most diverse national workforces in terms of individual differences, such as culture, sex, ethnicity and sexual orientation. The 2012 data show that the American workforce consists of 64% non-Hispanic white, 16% Hispanic, 12% African American and 5% Asian employees (Burns, Barton and Kerby 2012). In the US context, both civil rights legislation and AA have changed the demographic composition of the American workforce, resulting in high diversity in organisations. Considerable efforts have been made to ensure people from diverse backgrounds have equal access to public jobs in the workplace. Since the Civil Rights Act of 1964, the US federal government has endeavoured to include both women and minorities in the employment of federal agencies, and to correct the problem of underrepresentation therein. The term ‘American Labor’—which has been synonymous with the white male working class for a long time—has undergone a sound change since the 1960s, which also led to the formation of a different labour movement. In the late 1980s, white males comprised more than half of the unionised workforce, yet now represent only one-third of this workforce, while the proportion of black workers ranges from 13% to 15%. Thus, the new labour movement has emerged as increasingly immigrant and female (Barrett 2016). Table 2.2 provides recent data for employment status in the US workforce by race.

In their book, Workforce 2020, published in 1997, Judy and D’Amico (1997) predicted that organisations in the US would face four major macro-environmental opportunities. First, rapid technological change would create more jobs for knowledge employees, and reduce the opportunities for women and older American people. Second, the expanding economies in Asia and Latin America would lead to increased competition for low-skilled jobs and increase the instability of the American economy. Third, baby boomers would work beyond their retirement age, and thus constitute a major consumer segment in the economy. Fourth, the US labour force would be more diversified, with minorities forming more than half of new net entrants and a minimum of one-third of all entrants to the workforce. In the American context, it is claimed that, with the fast growth in demographic diversity in the workplace, organisations would have to ‘embrace and value’ diversity and acknowledge that human resources are an advantage if and when workplace diversity programs are effectively managed (Oyler and Pryor 2009).

Source: Bureau of Labor Statistics (2016).

Diversity in the Canadian Workforce

Canada became the first country in the world to adopt a multicultural policy through the Multiculturalism Act in 1988, aiming to encourage immigrants to retain their cultural heritage, rather than assimilate. The Multiculturalism Act is a policy of inclusion that recognises the potential of all Canadians, and encourages participation in Canada’s social, cultural, economic and political life. This recognition makes Canadians more open to and accepting of diverse cultures. Thus, the Canadian government is accountable and ensures that they ‘carry on their activities in a manner that is sensitive and responsive to the multicultural reality of Canada’ (Canadian Multiculturalism Act 1985, 4). Consequently, Canadian organisations are urged to consider multiculturalism when hiring and promoting employees from different backgrounds in order to serve a diverse public. Eighty-four per cent of Canadians are in favour of multiculturalism and immigration (Ng and Metz 2015).

When a multiculturalism policy was first introduced in Canada in 1971, the census data revealed that 96% of the Canadian population were of ethnic European origin, yet, by 2011, only 63% of Canadians reported the same. Originally, immigrants to Canada came from Europe; however, in the last 30 years, Asia and the Pacific region have been the principal source of immigrants. As diversity grows in Canada, federal institutions continue to support equal treatment and full participation in society, and enhance policies and programs that enable individuals and communities of all backgrounds to contribute to Canada’s evolution. Despite the challenges met by some small institutions in endeavouring to meet their obligations pursuant to the Canadian Multiculturalism Act because of limited resources, they remain committed to finding solutions and pooling their resources. The Department of Canadian Heritage remains supportive of efforts to enable all people to help build an inclusive society. However, Canada’s success as a diverse and inclusive nation was not built without effort, as diversity and inclusion have made Canada strong and free in practice (Trudeau 2015). Table 2.3 shows labour market data for the racialised population in Canada.

As a major migrant-receiving country with an officially adopted multiculturalism policy, Canada has an ethnically and culturally diverse population. Before 1967, more than 80% of immigrants to Canada came from Europe; however, this has since declined to one in five (Mulder and Krahn 2005). Since 1979, more than half of all immigrants to Canada (54%) came from Asia. Around 79% of all newcomers settle in Canada’s three largest centres—Montreal, Toronto and Vancouver—and subsequently enhance the cultural diversity of these three ‘capitals of immigration’ and other communities. In 2001, visible minorities comprised more than one-third of Toronto’s population, yet only 17% of Calgary’s population (Mulder and Krahn 2005). In 2006, it was anticipated that by 2017, 20.25% of all Canadians would be members of minority groups by 2017, and increase to as much as over 50% of the population in some major cities, such as Toronto and Vancouver (Dib 2006). Immigrants will be the source of all population growth in Canada by 2025. It seems that both Aboriginal peoples and visible minorities have more youthful populations and higher fertility rates than do the general Canadian population, who have an average of less than 1.5 children per woman (Dib 2006).

Source: Statistics Canada (2006).

The Canadian census data show that immigrants comprised two-thirds of Canada’s population growth of 2 million people between 2006 and 2011, which has contributed to Canada’s economic growth (Ng and Metz 2015). Today, Asia and the Middle East lead the list, with seven in 10 immigrants coming from these regions. It is anticipated that one in three workers will be foreign born by 2031. In the meantime, Canada endeavours to promote the multicultural heritage of Canadians. As a result, the majority of immigrants (80%) in Canada speak languages other than English and French, with Chinese, Punjabi, Spanish, Arabic and Tagalog representing most of the languages spoken by immigrants at home (Ng and Metz 2015). Canada’s people, including a great number of visible minorities, contribute to the prosperity of the country. The ethno-cultural diversity of Canada’s population is expected to increase by 2031, and, in the Canada Year Book 2011, Statistics Canada (quoted in Conference Board of Canada 2013) reported that:

At a time when Canada is facing labour shortages and projected shrinking labour because of the retirement of significant numbers of baby boomers, Canada needs to depend on immigrants to fill the gap in its labour force. A 2004 study by the Conference Board of Canada (2013) revealed that, between 1992 and 2001, visible minorities formed over 0.3% per year of growth in potential output, as well as real gross domestic product. It is expected that the contribution of visible minorities and the total elimination of this existing 14.5% wage gap will benefit visible minorities and the overall economy in Canada (Conference Board of Canada 2013). A skills shortage will be noticeable in certain professions as retirements begin to occur. Moreover, it seems that the fertility rate has declined below the rate needed to maintain the population, thereby resulting in fewer Canadians to replace the retirees. This change has placed pressure on immigration to establish a labour force, and it is reported that Canada will need about 225,000 newcomers each year to keep pace with economic growth and to enjoy the same standard of living to which it has been accustomed over the last 30 years (Rotundo 2012). Therefore, immigration will be useful to address skills shortage in specific professions and trades (Rotundo 2012).

A 2006 survey on diversity-related practices and priorities in Canadian private- and public-sector organisations conducted by the Conference Board of Canada (2013) revealed that diversity has become an integral part of strategic planning and operation of Canadian organisations. According to the study, there appeared to be strong commitment to diversity by the participating organisations, yet a gap between policy and performance because of many organisations’ failure to adhere to their commitment to diversity and provide inclusive work environments (Conference Board of Canada 2013). More recent research confirms the findings of the 2006 survey by revealing that two-thirds of Canadian organisations either adopt a collaborative (40%) or inclusive (11%) approach to diversity management, or embrace diversity (20%), while struggling to optimise its outcomes. Only a minority of Canadian organisations have a compliance culture, and hence view diversity as a problem (24%), or have a singular culture (4%) (Garr, Shellenback and Scales 2014, 14). This is contrary to the findings in the US, which revealed that 11% of US organisations have a compliance culture. Similarly, the regulatory laws in Canada serve as a driver for organisations to deal with diversity and inclusion. The percentage of 11% confirms that Canadian organisations are still at the compliance level. However, 49% of the Canadian survey respondents stated that their organisation had begun concentrating on non-compliance diversity and inclusion in the last five years (Garr, Shellenback and Scales 2014). The research further indicated that almost half of Canadian organisations started to implement inclusion efforts beyond compliance during the last five years (Garr, Shellenback and Scales 2014). Table 2.4 indicates the diversity and inclusion of staff size in the Canadian workplace.

According to recent statistics, members of EEA-designated groups, who encompass women, people with disabilities, Aboriginal people and visible minorities, represent increasing numbers of the Canadian labour market. From 2006 to 2011, two-thirds of labour market growth in Canada was spurred by the majority of newly arrived immigrants. In 2015, women formed 46.7% of the total employed labour force in Canada (Cukier et al. 2017). Meanwhile, research has revealed that, although members of the designated groups exist at the senior management and middle management levels, they are still considered underrepresented at both levels in comparison to their availability in the labour force (Cukier et al. 2017). When the EEA was implemented in Canada, the idea of diversity management emerged in the US as an outstanding characteristic of change in the workplace demographics of the workforce. The Royal Bank of Canada (quoted in Cukier et al. 2017, 1034) announced that, economically, ‘how well Canada continues to meet the challenges of diversity will determine our future success in attracting talented immigrants as global competition for talent intensifies’.

Table 2.4 Diversity and Inclusion Staff Size by Employer Size

Diversity in the UK Workforce

The UK labour market has become diverse with the participation of ethnic and religious minorities in the workforce; however, equality among different groups is yet to be achieved. Previous studies indicate that ethnic and religious minorities still experience occupational segregation and pay gaps. Muslims comprise the religious minority with the lowest employment rate (47% for men and 24% for women), while black graduates experience a 24% earnings penalty (Klarsfeld, Ng and Tatli 2012). In relation to employment equity legislation in the public and private sectors in the UK, the Equality Act 2010 covers age, disability, gender reassignment, pregnancy and maternity, race and ethnicity, religion or beliefs and sexual orientation. However, research indicates that public sector organisations in the UK enforce the equality legislation more strongly and subsequently minimise evasion, while the interpretation and implementation of the Equity Act is more voluntary in private-sector organisations (Klarsfeld, Ng and Tatli 2012).

Black, Asian and minority ethnic (BAME) groups in the UK seem to be underrepresented at all management levels in the workplace. About one in eight of the working-age population come from a BAME background, yet only one in 10 are working, and only one in 16 top management positions are held by an ethnic minority person (Kerr 2015). While British people with a BAME background seem to enjoy their work, they are not rated as the best performers when compared with their white colleagues. When asked about the term BAME ‘black and minority ethnic’ that these groups prefer, there are differences in opinion among ethnic minority groups, and no consensus on the preferred terminology (Kerr 2015).

Race affects individuals in the workplace in many ways, such as their rates of employment. For example, in the UK, 13% of ethnic minorities are unemployed, compared with only 8% of the general population. Further, research indicates that ethnic minority workers in the UK experience a pay gap in their earnings when compared with white workers.

The ‘Race at Work’ report (Kerr 2015) gives a better understanding of the underrepresentation of ethnic minorities in the workplace and at senior level. This report examined the experiences of 24,457 ethnic minority and white employees aged 16 and over and currently employed in the UK. Via a YouGov survey (6,076 respondents) and public open survey (18,381), the participants indicated that:

• BAME people are more likely to enjoy their work and have far greater ambition than their white colleagues: 64% of BAME and 41% of white employees emphasised the importance of their career progress. Similarly, the open survey showed that 84% of BAME employees and 63% of white employees stated that it is important to progress (Kerr 2015).
• Racial harassment and bullying in the workplace is prevalent: ‘30% of those employees who have witnessed or experienced racial harassment or bullying from managers, colleagues, customers or suppliers report it has occurred in the past year alone’ (Kerr 2015, 3).
• Many UK employees do not feel valued or inspired: Many employees without career role models or inspiration feel they are unappreciated by their managers. The absence:
  • of role models in the workplace is stark for Black Caribbean (11%), other black group employees (7%), Chinese and mixed-race employees lacking role models both inside and outside of the workplace (Kerr 2015, 3).
• Employees feel uncomfortable discussing race at work: UK employees might feel comfortable discussing age and gender, but not race. Employers need more confidence dealing with race in the workplace and understanding its effect on individuals and their ability to reach their full potential—especially because race also affects organisational success and survival (Kerr 2015).

People in the UK are three times more likely to take the racial bias test than any other country in relation to age, gender or sexuality because of what they have read in the media. This led to a race equality campaign to determine what is occurring in regard to race in workplaces in the UK. The target was to hear from 10,000 employed people in the UK, aged 16 or above (Kerr 2015). More than 2,000 comments on discrimination and 3,000 on leadership were submitted, with 6,076 respondents representing UK employees and 18,381 respondents to the open survey—a total of 24,457 respondents. The changing demographic of the UK workforce includes its age, education background and ethnicity, which indicates that employers have to provide workplaces that truly reflect equality for all today and tomorrow, and that now is the time to act (Kerr 2015). Organisations in the UK are seeking to prioritise diversity, yet the solutions seem complex and more must be done in relation to recruitment, professional and mentoring issues. It is also important to consider customers, suppliers, employers, shareholders and the public, who have a stake in creating a fairer, more equal environment in the UK (DiversityUK 2016). Clearly, it will take some time to achieve fair representation of ethnic minorities in public and private sectors (DiversityUK 2016).

Diversity in the Australian Workforce

Successful adaptation to diversity depends on the small and everyday actions taken by the individuals in organisations at all levels (Kreitz 2007); however, diversity poses challenges to organisations in many fields today. Demographic changes in the workforce are affected by global markets and international competition, and increase the level of diversity in organisations. This increased diversity needs to be managed internally at an organisational level, where increased diversity is caused by demographic changes in the compositions of the workforce, and externally at a customer level, where increased diversity is caused by demographic changes in customer populations, combined with the globalisation of markets. Riccucci (2002) regarded diversity as the next step needed to create a more integrated workforce. Whether and the extent to which this is occurring in Australia constitutes one of the main issues explored in this book.

Developing a clear understanding of workplace demographics is essential to examine how the dynamics of change affect national economies, and how organisations adapt and manage such changes in the face of constantly increasing levels of diversity in the workplace. The Community Relations Commission for Multicultural New South Wales (2011) stated that Australia has become a productive culturally diverse nation with an annual migrant intake that targets the skills and demands of the labour market, as well as the integration and success of second-generation migrants. According to the commission, this has been achieved because of successive governments’ recognition of the need to implement policies for the national economic interest, and because of the settlement programs that have been conducted with fairness and integrity in Australia’s migration program (Community Relations Commission for Multicultural New South Wales 2011). It is apparent that the fairness and integrity of the settlement program does not necessarily lead to effective management of diversity in the workplace; thus, the ways that organisations are managing their increasing levels of diverse workforce requires further investigation.

Australian workplace statistics have also revealed the multicultural features of the national demographics, which are naturally reflected in the Australian workforce. This was evident in the release of 2016 Census of Population and Housing data, published by the ABS. The 2016 census (ABS 2016) revealed that almost one-third (33.3%) of Australians were born overseas and the majority of immigrants belong to working-age groups. Thus, the question of whether diversity in the workplace is managed effectively becomes a real issue.

Diversity management has become a necessity, and can be seen as a natural outcome of globalisation. There is acknowledgement that diversity is an effect of globalisation, which is the ‘defining political economic paradigm of our time’ (Bratton and Gold 2007, 120), and, with this increasing internationalisation, diversity is becoming a strategic success factor for leading companies. The importance of a diverse workforce is also indicated by the claim that managing workforce diversity is important for success and penetration of the global market (Henry and Evans 2007). Globalisation has had a significant effect on the migration of people from various cultural backgrounds who have joined the Australian workforce and now form a substantial proportion of diversity in the workplace. However, while governments are facilitating the circulation of goods and services around the globe, they are endeavouring to impose higher national barriers to restrict the free movement of people. This affects immigrants from various backgrounds who form the workforce, yet it remains unclear how this is experienced in the workplace.

As discussed, the demographics of the Australian workforce have changed dramatically over the years, as has the global marketplace. The success of the strategic management of diversity in the workplace depends on the recognition of employees’ differences and skills, and using them to their full potential. The more we investigate diversity, the more we find that diversity is a concept that is linked to population distribution, socio-political features and the workforce. Thus, the attributes of workplace diversity relate to employees who come from different backgrounds and possess these attributes in varying degrees.

Summary

This chapter deals with waves of immigrants into the US over a long period of time who brought with them their cultures and languages, and how, over a period of time, it created a diverse workplace. The various policies in the private and public sectors are discussed, together with the factors that impacted on diversity in organisations. The importance of diversity in the US is explained and how equal opportunities are afforded to individuals.

This chapter then discusses how Canada adopted its multicultural policy, and why Canada depended on its immigrants in the labour force to overcome skills shortages and fertility rates. Further discussions covered the stages of compliance levels of Canadian organisations, and acceptance of diversity by the population. Additionally, the inequality experienced in the UK labour force is revealed and how organisations should provide equality in the workplace, regardless of individuals’ ethnic or religious backgrounds. Race seems to be an issue with the diverse workforce which prompts organisations in the UK to deal with race to ensure the organisations’ survival and success. Furthermore, the issues that Australian organisations had to consider in relation to global markets and competition are dealt with, as well as the steps required for an integrated workforce. The importance of managing a diverse workforce and the impact of globalisation on immigration are outlined. The recognition of immigrants from different cultural backgrounds and their skills are investigated in order to highlight the benefits of a diverse workforce.