MULTICULTURAL WORKFORCE

The phrase "multicultural workforce" refers to the changing age, sex, ethnicity, physical ability, race, and sexual orientation of employees across all types and places of work in the United States. Multicultural workforce as a descriptive term or phrase has, however, largely been supplanted by the term "diversity" in describing the increasing heterogeneity of the workplace through the inclusion of different groups of people. While "multicultural workforce" is still sometimes used in reference to employees of varying social, racial, and ability characteristics, the scope of diversity goes further and includes not only the personal characteristics of an organization's employees but also the way an organization responds to a multicultural or diverse workforce . Thus Roosevelt Thomas, founding president of the American Institute for Managing Diversity, qualified diversity as a "comprehensive managerial process for developing an environment that works for all employees." Likewise the Portable MBA Desk Reference ended its definition of "diversity" in a similar manner. "The challenge posed by diversity, then, is to accommodate different groups by addressing their lifestyles, values, work style, and family needs without compromising the goals and operations of the organization." And Joan Crockett, vice president for human resources at Allstate Insurance Co., viewed a diverse workforce as being about "unlocking the potential for excellence among all workers." Allstate's diversity vision statement summed up this belief: "Diversity is Allstate's strategy for leveraging differences in order to create a competitive advantage."

The American workforce has been historically dominated by the white, male majority of the labor pool. For a variety of complex social and economic reasons, white women began entering the workforce more and more in the late 1800s—in many cases against most of the social norms and mores of the last 200 years. Women, as a percentage of the labor force, continued to grow, although sometimes sporadically, during the 20th century. Following World War II, however, the employment of women—especially white women—steadily increased. These demographic changes in the labor force have continued to accelerate as minority men and women have followed white women into the workplace. Based on figures published by the U.S. Bureau of Labor Statistics, the Handbook of U.S. Labor Statistics estimated that the U.S. labor force will have increased by about 11 percent, or 15 million persons, from 1996 to 2006, bringing the total workforce up to 149 million. In 2006 the median age of the labor force will be close to 41 years. Women will be expected to increase as a percentage of the labor force but at a lower rate of growth than in past decades. There will also be, "Significant compositional shifts … along racial/ethnic lines." White non-Hispanics will still constitute the largest share of the labor force in 2006 at 73 percent, although this will be a drop from 75 percent in 1996 and 80 percent in 1986. The rate of growth of white non-Hispanics in the labor force, however, will be considerably below that for African American, Asian, and Hispanic groups. It is also expected that by 2006 Hispanics will represent the second-largest ethnic segment of the labor market, surpassing African Americans. The Asian percentage of the labor market is also expected to grow relatively fast but will still be a small percentage of the total.

Assimilation of minorities into the workplace, or the practice of suppressing cultural differences to conform to the majority culture, meant that previously many of these minority workers had to lose a part of their heritage in order to obtain and hold gainful employment. Stereotypes of African Americans, Hispanic Americans, Asian Americans, and women permeated the corporate and industrial culture until well into the 1960s, when federal laws were established to prevent discrimination. Some of the more important pieces of federal antidiscrimination legislation are: Title VII of the Civil Rights Act of 1964, which prohibits employment discrimination based on race, religion, sex, and national origin; the Equal Pay Act of 1963; the Age Discrimination Act in Employment of 1967; and the Americans with Disabilities Act of 1990. While these pieces of legislation are aimed at preventing discrimination rather than promoting diversity per se, they do help in maintaining a diverse workplace.

Diversity and multiculturalism, however, should not be confused with affirmative action. The most striking difference between the two social schemes is that affirmative action is initiated by government regulation and legislation, whereas diversity is voluntary although various governmental agencies may pressure companies under certain circumstances to diversify their workforce. Affirmative action is also legally driven, quantitative, problem focused, assimilated, and reactive, whereas diversity is productivity driven, qualitative, opportunity focused, integrated, and proactive. Janice L. Dreachslin, a Pennsylvania State University management professor and author of Diversity Leadership, stated that diversity programs should be differentiated from affirmative action programs. "Affirmative action means using an individual's group identity as a criterion for making selecting decisions." She went on to state that if diversity is to be valued, it must be viewed as a strategic advantage.

Likewise, the focus of diversity programs and diversity training should not be on the historical workplace inequalities between men and women and majority and minority segments of the labor force. Such a focus often leads to a condescending atmosphere, according to employee-relations consultant Richard Hadden. "It's a bit patronizing." Hadden told Workforce magazine's Gillian Flynn. "It's like, 'Well what can we do to fix these poor black folk and poor women who obviously don't really know very much about what's going on because, poor things, they haven't been given a chance.'" Many diversity trainers and consultants thus feel that although diversity may have some antecedents in affirmative action, it's time for diversity and affirmative action to go separate ways.

Multiculturalism was originally associated with initiatives for race and gender equality in the workplace. Primary dimensions of diversity, however, certainly include race and gender, but also age, ethnicity, physical ability, and increasingly, sexual orientation. Additionally, secondary factors such as education, geographic location, income, marital status, military experience, parental status, religious preference, and work experience also reflect the elements of a diverse or multicultural workforce. Both primary and secondary characteristics significantly affect an individual's interaction in the workplace.

DEMOGRAPHIC CHANGES

All of the diverse characteristics of a multicultural workforce can be used to a strategic advantage by those companies with the creativity to make use of them. The changing demographics of the U.S. population and the resulting shifts in corporate markets offer new competitive opportunities for American businesses. To put it simply, a multicultural workforce makes good business sense. Concurrent with changing demographics in the United States are new patterns in spending power. In 1999 African American buying power was expected to reach over $530 billion—an increase of nearly 73 percent since 1990. Hispanic buying power likewise was expected to increase to $383 billion, an 84 percent increase over 1990 and Asian American spending is expected to jump in the same decade from $113 billion to $229 billion, representing a growth rate of 102 percent. 'Those companies that are able to tap into this growth now, with the right products and services as well as the work force expertise to serve these markets, are looking at an unbelievable business opportunity," according to Thomas Mclnerney, president of Aetna Retirement Services and that company's diversity steward, in an interview with DiversityInc.com .

The rise in the spending power of these minority groups has increased employment opportunities for minorities by ironically creating positive stereotyping, or what Frederick R. Lynch, author of The Diversity Machine, called "identity politics." According to Lynch, companies spend a great deal of money and marketing energy on the idea that Mexican Americans can best sell products and services to other Mexican Americans and that African Americans can best sell products and services to other African Americans. Workforce editor Gillian Flynn concurred, "These companies have a stake in the belief that people of a certain race or gender think similarly, and they favor diversity programs that support that belief."

MANAGING DIVERSITY

Programs or corporate environments that value multiculturalism must answer hard questions about managing diversity. For example, can diversity be best promoted by equal treatment or differential treatment? Antidiscrimination laws prohibit employers from treating applicants differently, yet some argue that this premise seems to ignore those fundamental differences between individuals that form the basis of diversity. On the other hand, treating people differently often creates resentment and erodes morale with perceptions of preferential treatment. Other questions to be answered are: Will the company emphasize commonalities or differences in facilitating a multicultural environment? Should the successful diverse workplace recognize differentiated applicants as equals or some as unequals? How does the company achieve candor in breaking down stereotypes and insensitivity towards women and minority groups? These questions pose difficult dilemmas for companies seeking to create an environment conducive to diverse workers and productivity.

GOOD BUSINESS SENSE

But perhaps the biggest question that companies must face is: Will diversity make good business sense for our company? Evidently it does. Fortune magazine in 1999 published its "America's 50 Best Companies for Asians, Blacks, and Hispanics," and found that many of the companies on the list were some of Wall Street's top performers. The companies matched the Standard & Poor's 500 index (S&P 500) over the past year and beat it in three of the past five years. The top ten companies on the Fortune list were: Union Bank of California, Fannie Mae, Public Service Co. of New Mexico, Sempra Energy, Toyota Motor Sales, Advantica, SBC Communications, Lucent Technologies, Darden Restaurants, and Wal-Mart. Rich McGinn, chief executive officer (CEO) of Lucent Technologies, linked success to talent. "We are in a war for talent," he told Fortune. "And the only way you can meet your business imperatives is to have all people as part of your talent pool—here in the United States and around the world." The CEO went on to say that diversity gives a company a competitive advantage because different people approach similar problems from different perspectives. Ivan Seidenberg, CEO of Bell Atlantic (which ranked 28th on the Fortune list) put it even more simply: "If everyone in the room is the same, you'll have a lot fewer arguments and a lot worse answers." A diverse management team means "more diversity of thinking."

Another Wall Street plus for diversity and the success of diverse companies is the Domini Social Equity Fund, which is a mutual fund investing in companies on the socially screened Domini 400 Social Index. As reported by Hemispherelnc., the Social Equity Fund placed in the top 10 percent of the 4,412 domestic equity funds tracked by Morningstar. In 1998 the fund had almost a 33 percent return and beat the S&P 500 index by nearly 3.5 percent. Nationwide, socially responsible investing grew at a rate of 227 percent from 1995 to 1997, and 9 percent or about $1.2 trillion of all total investment assets are invested in portfolios screened for social responsibility.

STARTING A PROGRAM

How does a company initiate a multicultural or diversity program? Many different elements may be necessary to create a climate of inclusion and to incorporate genuine value for diversity in the workforce. Four common elements in diversity initiatives that strengthen diverse programs are training, communication, task forces, and mentoring.

Many major companies conduct diversity training for managers and almost half conduct training for all employees. The key to success lies in viewing training as an ongoing process rather than a single event. Core components of diversity training may include valuing diversity, cultural literacy, corporate inculturation, global perspectives, and individual selfdevelopment.

Communications about the value of inclusion and diversity that come from the top of the organization are critical in the success of a diversity initiative. While this communication is frequently written, companies such as Allstate Insurance employ teleconferenceing to communicate multicultural values across the country. Additionally, the creation of special multicultural manager positions communicates with actions the real value of diversity from the top.

Task forces engage management and employees in the process of dealing with multicultural conflicts, needs, and organizational dynamics. Many task forces operate at high levels within organizations. Yet, increasingly many companies involve employees at all levels of the company in formulating policies and guidelines. Mentoring programs directly connect multicultural employees with traditional employees across racial and gender lines. IBM, for instance, uses a formal mentoring program while Corning employs a more informal "coaching" program.

Even the most well-intentioned diversity programs can, however, sometimes go awry. Deleyte Frost, senior associate of a Philadelphia organizational development firm offered a number of tips for instituting diversity programs. Frost felt that diversity programs should focus on the real issues of group identity, be they race, gender, age, etc., and not be covered up by such phrases as "all individual differences." Frost also did not approve of euphemisms such as "lifestyle" when the issue is sexual orientation. Opposition to diversity programs should be met with "energy, caring, and thoughtfulness and not deflected by intellectual arguments," although baseline data is needed to jump-start such programs. True change in corporate culture begins at the top and diversity programs cannot succeed without long-term commitment from top officers and a forward-thinking implementation team. Everything the diversity program does must be linked to business success, diversity strategies must be part of "the business purpose and vision." Do not waste time trying to create a plan that will make everyone happy, it just won't happen. Finally, do not assume that training will change behavior, and do not focus diversity efforts only on customers and external public relations.

There are a number of organizations and commercial enterprises that are involved with diversity on a national scale. The American Institute for Managing Diversity is located in Atlanta and was founded in 1984 as a nonprofit organization. The institute helps organizations understand the business imperative for managing diversity. It also provides insights into the strategic implementation of diversity and suggests new areas of research critical to the successful application of diversity programs. DiversityInc.com is an online magazine that provides news, resources, and commentary on the role of diversity in strengthening the corporate bottom line.

Laurie Dougherty, one of the editors of The Changing Nature of Work, noted that the image of the American workforce is rapidly changing from essentially a white male image, as exemplified by the "man in the gray flannel suit" and the hard-hatted construction worker, to one of men and women of all nationalities and races—in essence, a change from a homogenous image to one much more diverse or multicultural. The greatest challenge of this new and diverse image is to "balance the respect for diversity against the danger of discrimination based on differences." Only when this balance is achieved can our human resources be used effectively and productively.