Cultural diversity in the workplace is increasing. While some organisations are reluctant to put diversity policies in place, there is a growing wave of affirmative action leading to superior returns on investment.
According to the results of a recent study conducted in 2013 by Diversity Council Australia (sponsored by PwC and IBM), only 22.2% of directors, 21.9% of CEOs, 19.9% of senior executives and 13.5% of chairs of ASX 200 companies are ‘culturally diverse’, compared to 32.2% in the general Australian community.
The figures would be alarming, yet they fail to take into account the number of entrepreneurs and business owners who have a multicultural background. Six of the top 10 BRW rich-listers are first or second generation migrants.
Therefore, there are two stories here: the need for more diversity at an executive level – including gender – and the celebration of business owners who contribute effectively and generously to the Australian economy.
For the purpose of this article, let’s look at why there is a lack of diversity, how to recognise diversity at executive level in Australian business and then use it to an advantage.
According to a report conducted by Korn/Ferry International, “Our findings reveal that while there has been some progress in improving diversity on Asia’s boards, it has been slow. Most countries’ boards now have a slightly higher percentage of female directors than two years ago, but only Australian companies have made significant improvement, with female directors accounting for 16.7%, up from 11.2% in 2010. Elsewhere, female directors account for less than 10% of total board members. Further, more than 50% of boards in India, Japan, New Zealand, Singapore and South Korea have no female directors.”
The report found that boards are also often lacking in other aspects of diversity, such as age and ethnicity. On those facets of diversity, for example, the report said:
• China has the youngest directors on average. Japan has the oldest: 89% of directors in Japan come from the Baby Boomers generation.
• The majority of boards consist of a single ethnic group, except in Hong Kong, Malaysia and Singapore.
Jacqueline Gillespie is a senior partner with Korn/Ferry. She makes the comment that CEOs must properly strategise and as such commit to a workplace model that embeds diversity and inclusion in every level of an organisation.
“Many CEOs have not been exposed to what true workplace diversity looks like. Our research suggests they view it as a recruitment and compliance process, rather than a strategy that helps to grow and engage talent and competitiveness required for business growth.”
Indeed growth is the key here. There is no doubt that a more diverse workplace seeds ideas and opens the doors to areas where the company may have been stalling.
Nareen Young is the CEO of Diversity Council Australia. She told workplaceinfo.com.au the following:
“Minimal increases in women in leadership positions, persistent barriers to more flexible working and the notable absence of people with a disability and Aboriginal Australians in our workplaces show current organisational approaches are not working. We aren’t going to see a lot of improvement in these areas if organisations don’t value the diversity function, aren’t strategic about planning for it or don’t properly resource it.”
So how do you introduce a policy of cultural diversity into the workplace? The Federation of Ethnic Communities’ Councils (FECC) of Australia has a series of fact sheets on hand for anyone looking for advice.
According to the FECC, first you have to define cultural diversity in your workplace and then you have to decide what it means for your organisation.
“Recognising cultural diversity in your workforce is the first step in creating a positive workplace culture that’s inclusive and responsive to all employees’ needs. Ignoring cultural diversity can lead to an exclusionary environment where employees feel unable or unwilling to talk freely about their views and opinions. This will affect your ability to encourage creativity and innovation,” the FECC states.
“A successful organisation seeks to understand and build on cultural diversity for its own good and that of its employees. To develop a positive workplace atmosphere that embraces cultural diversity you could collect information about your workforce to learn what your organisation’s cultural diversity actually looks like. This can be done formally, via surveys, or informally through regular conversations and discussions.”
This determines the following:
• Self-described ethnic or linguistic identity.
• Country of birth and length of time
• Training opportunities received or sought.
• Employees’ desire to learn about cultural groups and your organisation’s diversity.
• Experiences and types of discrimination and exclusion.
• Job satisfaction – most and least favourite aspects of your organisation, their role etc.
• Satisfaction with career progression and professional development opportunities.
• Opinions on the inclusiveness of your workplace culture and whether they feel comfortable with cultural diversity and how it’s reflected in the organisation.
“By collecting this information you can gain a deeper understanding of the cultural diversity in your workplace and how to make best use of it. Your employees can also have the opportunity to share their culture with others in an inclusive working environment.”
Further to this, there are generous market benefits to be had. There is great potential to stimulate both local and international markets.
The FECC states:
“Workplace diversity can be used to understand and connect with ethnic-specific market segments. This can quite often be the difference between maintaining or failing to sustain a successful business. So, culturally diverse staff should be consulted or involved in planning and marketing exercises.”
They can contribute to:
• Understanding the needs, wants and preferences of growing ethnic-specific markets, which has, for instance enabled alcohol sellers to target the Chinese market for premium brands for red wine and cognac, and car sellers such as Ferrari to target the second generation Italian Australian market.
• Being aware of days of cultural significance or community celebrations such as Lunar New Year (Vietnamese, Chinese, Laotian and Cambodian), Diwali Festival (Indian), Orthodox Easter (Greek, Macedonian, Serbians and Russian), which may create a time-specific need for gifts, food products or entertainment.
• Providing insight into the travel patterns of specific groups such as the southern Europeans traveling for the northern Summer, those from Islamic faith attending the Haj and the Chinese who return to Asia for the Lunar New Year.
Other benefits include client engagement, service delivery, utilisation of knowledge and innovation.
One other benefit is talent management. According to Diversity Council Australia, “harnessing cultural diversity from Australia and abroad is essential to meeting the challenges of skill shortages, global labour market competition and an ageing population”.
A Deloitte and Forbes Insight Survey identified that global business executives view the competition for talent occurring globally and in emerging markets as the most pressing talent concern today.
Diversity Council Australia points out that, “More than 65% of respondents in a subsequent Forbes survey of international executives had developed programs specifically to recruit diverse employees; 53% followed up with diversity-focused development programs and 44% had specific diversity retention programs.
“A workplace in which cultural diversity is valued also gains the productivity benefits of retaining valuable staff and maintaining high staff morale.”
Nareen Young added, “Nurturing the cultural diversity of employees is very important for an organisation’s business and reputation. Not only does it deliver improved productivity and innovation, it enables you to capture the best talent wherever it is. It also helps reduce unwanted turnover costs form race-based discrimination.”…
Excerpted from an article originally published in the April/May 2014 issue of Think & Grow Rich Inc. magazine. If you are a subscriber to Think & Grow Rich Inc. magazine, you will receive this article in your April/May 2014 issue of TGR. If you are not a subscriber, click here to subscribe.