There are a number of demographic characteristic contributing to diversity. The most widely recognized involve age, gender, ethnicity, and education. A detail description of these characteristics provides insights into the nature of diversity in the workplace.
The workforce is getting progressively older. The percentage of employees under the age of 35 is declining while the percent in the 35 to 54 age group is increasing. This development is a result of a number of factors, including the declining birthrate, which helps explain the decline in the percentage of younger workers. Second contributing factor to an aging workforce is the improved health and medical care, which is helping people live longer, more productive lives.
The changing age composition of the workforce is forcing organizations to make a number of adjustments. One is learning how to deal effectively with older workers. In the past this was not a problems because older workers were forced to retire. As a results, the number of age discrimination complaints has increased dramatically. The Equal Employment Opportunity Commission has thousands of complaints each year, about 20 percent of all charges. The key here is that organizations cannot discriminate on the basis of age. Organizations must begin to listen to their older employees, determine how their needs are different from those of younger workers, and learn to draw from the expertise and experience that older employees can offer.
On the other hand, organizations must also learn how to deal with younger employees having totally different values and attitudes.
Besides age composition, there are also changes occurring in gender composition. Women have been entering the workforce in record number over the last four decades. By 1975 they accounted for approximately 40 percent of the total and at the turn of the century women make up about half the workforce. This diversity development can and should dramatically change the policies and day-to-day practices of organizations.
Even though laws spelling out equal pay and opportunity for women have been on the books, companies are still finding that they must carefully examine their compensation and promotion policies and practices. For example, one of major issues remaining is the Glass Ceiling Effect a term used in reference to women being prevented from receiving promotions into top-management positions. This ceiling is often subtle and is uncovered only by looking at promotion statistics and seeing that women are greatly underrepresented in the executive suite. No matter how far up the organization a women advances there still seems to be this ceiling, not always visible, like glass, that halts her progress.
The same goes for pay. The latest statistics show that women are still being paid far less than men. According to the National Committee on Pay Equity, by the end of the 1960s women were paid 69 cents for every dollar a man made. By the turn of the century this had only increased to 74 cents. At this rate, equality would not be reached until the 22nd century. Moreover, these pay gaps between men and women are not confined to lower-level jobs. Working women recently reported pay differentials for men and women in a host of different occupations.
This problem for women is true across the world. To meet the challenge of true equal pay and opportunity in employment, firms must continue to examine and change their policies and practices to eliminate gender bias and discrimination.
The term ethnicity refers to the ethnic composition of a group or organization. Changes in the racial mix of the overall population are reflected in the workforce. These changing racial patterns point to greater workforce diversity. The challenge for management is to deal with these ethnicity changes, as with the change regarding gender, in terms of policies and practices concerning pay and promotions. Like women, minorities on the average are paid less and are less well represented in the upper-management ranks.
Paradoxically whereas new entrants and entrants and existing employees have on average more education, the other end of the spectrum, those with little or no education or basic knowledge, is also increasing. As technology increases and the skills required to remain competitive in the quality conscious, global economy continue to rise, companies will have to train and educate their employees. Even engineers and other high-tech personnel will need to continually upgrade their knowledge. Business will also find that job redesign and reengineering will be necessary in order to streamline the work and the employees must be able to adjust to these expanding knowledge requirements. This challenge is why firms now require their employees to have at least 40 hour of education and training annually, and the budget to do so is around $100 million.
Other Characteristics of Diversity
In addition to age, gender, ethnicity, and education, there are a number of other characteristics that describe diversity in the workforce. Language for example. Firms must exhibit care and accommodation to ensure effective communication. Also those challenged with a disability are receiving increased attention.
Finally, and often overlooked in discussions of diversity, there is the impact of multiculturalism in the global economy. Under globalization, members of corporate boards, executives, managers and workers now represent every nationality. Managing this international diversity is also a challenge.