Workforce diversity refers to differences in the workforce in terms or its age, gender, race/minorities, education and productivity. Age has been a popular basis of market segmentation. A culture’s age structure is especially important to the distributors of such products as athletic equipment, designer clothes, compact disks, etc. Gender make of the workforce is important for management. The nature of workforce diversity is illustrated in fig. 3.2.
Sexual harassment has become a significant issue due to growing percentage of women in workforce. As applied in the work place, sexual harassment means any unwanted sexual behaviour that can involve. For example, words, gestures, sounds, action or physical touching, Racial and ethnic minority issues are also becoming increasingly important.
Managing diversity effectively is essential for the success of an organization. Proof. Taylor Crox1 of the University of Michigan (USA) has given the following benefits of management cultural diversity :
Lower Costs : As organizations become more diverse, lack or integrating workers from different cultural backgrounds leads to higher costs. If multi-cultural issues are not managed well. Employees do not feel comfortable in the work environment. They spend time and energy worrying about discrimination, harassment and other issues rather than their jobs. Effective management of diversity helps to reduce costs.
Better Staffing : Companies that successfully manage cultural diversity will have advantage over other companies in hiring people. Such companies become favoured employers for women and ethnic minorities. They will win the competition for the best personnel. As the talent pool shrinks and changes composition this edge will become increasingly important.
Marketing Advantage : Organisations that manage multi-cultural issues gain an insight into markets consisting of minority groups and women.
Creativity : Groups of people from diverse backgrounds can be more creative than groups with homogeneous backgrounds. However, there must be a core of shared beliefs and values around which people can express their differences.
Problem Solving : Heterogeneous groups can produce better decisions through a wider range of perspectives and more thorough analysis of problems and issues.
Flexibility. Ability to manage diversity increases the flexibility and adaptability of an organization. More quick response to internet and external issues becomes possible. Quicker response to environmental changes provides a competitive advantage.