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CAPITALIZING ON DEMOGRAPHIC CHANGE: How Your Organization Can Prepare for the Global Workforce By Lynn D. Lieber, Esq.
|DiversityBusiness.com Magazine Article/- It is hardly a secret that demographics in the workplace are rapidly shifting. The most obvious change is that of a burgeoning population. At the turn of the 19th century, the world’s population was roughly one billion people; a century later, it had increased by half a billion people. Such growth seems paltry when compared with the present rate of growth. By 1999, the planet housed six billion people. Demographers predict that by 2013, yet another billion people will have joined us. In other words, adding another billion people now takes only fourteen years. Remember, the world’s population grew a half billion during the entire 19th century! It doesn’t require advanced mathematics to see that the world’s population growth is exponential and that we will all be affected.
Why should employers care about what is happening with global demographics? How is this an issue for any organization’s HR, marketing, or PR departments? Savvy managers are right now learning all they can about changing demographics to prepare for radically shifting changes in their organizations’ customer and client bases and in their future pools of job applicants. The face of the world is changing and successful organizations and their managers are watching, learning, and making plans.
THE IMPACT OF MIGRATION
One key factor in changing global demographics that will greatly affect the future workplace is migration. Although migration does not change the population globally, it does significantly shift individual countries’ demographics. It is helpful to understand the numerous reasons why people move. Many of these migration motivations fall under the rubric of a search for a better life: people are moving in search of better job opportunities, personal freedoms, more education, or to avoid drought, hunger, disease, or persecution.
From a workplace perspective it is especially important to ask two questions regarding migration: where are people leaving and where are people going? The United States welcomes more migrants than any other country on earth. In 2002, well over a million people chose to leave other lands and make their lives in the U.S. By comparison, the country receiving the second highest number of migrants was Afghanistan, with 300,000 people emigrating there.
Where are people departing from? In 2002, the greatest number of emigrants left Mexico: 280,000 people. China was a close second with 230,000 people leaving that country. Many Mexican and Chinese emigrants came to the U.S. In fact, nearly a third of foreign-born people in the U.S. have migrated from Mexico. It is especially important for organizations doing business in the United States to understand the role of immigration. Immigration can alter a country's existing racial and ethnic composition, impacting the culture.
Has your organization developed a plan to respond to these global demographic changes? Or is your organization still trying to do “business as usual”? The latter is not likely to be a winning strategy. No longer can your organization assume that its clients, customers or employees were born in the United States. As the U.S.’s racial and ethnic makeup shifts, products and services must respond in order to capitalize on changing consumer demographics.
In fact, the new marketplace requires changes on a magnitude commensurate with those occurring in the population. If you’re still not convinced that Mexican and Chinese immigrants – along with those from other countries – matter to you and your organization, consider this. By the year 2050, people of color will make up significantly more than half the U.S. population.
The statistics we are talking about are dramatic. For instance, approximately 20 percent of all U.S. children now have a foreign-born parent. The buying power of these households is tremendous. The southern United States has recently experienced the most rapid foreign-born population increase, but no region of the country remains untouched by radical population changes. An organization’s ability to tap into these markets and harness their human resources might very well mean the difference between success and failure.
THE MULTIGENERATIONAL WORKFORCE
Migration is not the only significant cause of demographic change. With the benefits of ever improving nutrition and medical care, people in many countries are living longer. The European Union expects that the number of people 65 years of age or older will rise more than 50 percent between 2005 and 2030, putting significant strain on the pension system as well as businesses. While it is great news that people are living longer, the decrease in young people and the relatively small size of the working population could cause problems for those countries’ economies.
In the United States, between 2011 and 2029, “baby boomers” – people born between 1946 and 1964 and so named because of their large population segment – will be entering traditional retirement age. Of course, not everyone will want to or be able to retire. Some older workers will remain in their jobs and statistics are already reflecting this as a demographic event. For instance, in 2000, 20 percent of U.S. workers were between 65 and 74 years of age. By 2006, there were 5.5 million workers 65 and older, representing a 3 percent increase in only six years. But this is only the beginning. In just a decade, by 2016, that number will have nearly doubled, with 10.1 million workers 65 and older expected to be in the workforce.
However, many baby boomers will indeed retire and that decision will be felt both in the economy and workforce. The younger generations following the retirees will be pulled between the need to care for their aging parents and the need to care for their own children. Benefits and time away from work are likely to become more important to the workforce, creating more pressure on businesses and organizations.
As boomers leave their careers, employers can expect fewer qualified candidates to fill open positions. Organizations will be scrambling to move many of their current employees up into the jobs that boomers will retire from, thus creating openings in the lower levels of many organizations.
YOUR NEXT GENERATION WORKFORCE
Who will fill these new positions? Human Resources Departments are already working with a much more diverse pool of applicants than would have been seen even as recently as a decade ago. This increased workforce diversity is not just the result of migration; baby boomer retirement also impacts the racial/ethnic makeup of the U.S. workforce because race diversity is not distributed evenly across the age groups in the United States. Sixteen percent of the population over 65 years of age is nonwhite, while 39 percent of the population under 25 is nonwhite. In other words, as older employees leave their jobs and younger workers are hired, the racial composition of the workplace will change dramatically.
The same can be said about gender in the workforce. Because women are living longer than men, an aging population will number more women than men. This means that organizations will find their more experienced workforce becoming increasingly female. In order to compete well, organizations will have to ensure that they are women-friendly workplaces and avail themselves of the resource of foreign-born workers.
For HR managers, having an understanding of foreign-born worker demographics can translate into attracting high quality job candidates to the organization. For example, understanding that certain applicants and employees have ties to other countries can be helpful. Foreign-born employees may need to travel farther to visit families – sometimes travel time alone can take four to five full days. Offering flexible time off that enables employees to leave for longer periods can be of tremendous value to foreign-born employees, or those whose families live in foreign countries. It is important to remember, however, that giving special incentives or benefits to people based on their country of origin is illegal. Smart organizations will consider the needs of foreign-born employees, yet always treat all employees equally and never discriminate based on country of birth.
By the year 2050, the United States is expected to have become a minority-majority country, meaning that the number of minority people, taken together, will exceed the number of non-minority residents. These racial and ethnic demographics transitions are already evident. What can you expect as a result of these changes? If you and your organization have been preparing, you will reap dual rewards: the creative and business benefits of greater workplace diversity and an increased customer or client base.
Nevertheless, such great change is not without its challenges nor will it happen organically. Organizations at the forefront of this vast cultural swing will lead the way with HR managers who implement diversity and cultural sensitivity training in their workplaces. Successful hiring decisions in the next generation workforce will have to be free of racial and cultural prejudices.
“Prejudice is a dirty word,” says Sondra Solovay, author, law professor and employment attorney, “and most people are quick to self-report that they are not prejudiced. However, the vast majority of people do have implicit biases.” Solovay explains that implicit biases are unconscious, hidden preferences and she cites the implicit bias testing developed by Harvard University. “Over three million people have taken the Harvard test,” says Solovay, “and those results have consistently shown overwhelming prejudice against certain groups, such as older people, heavier people and African-Americans.”
To capitalize upon the next generation workforce, HR managers will need not only to train their workforce but to also examine their own implicit biases. “A failure to do so,” says Solovay, “can directly translate into poor hiring practices that undermine an organization. Remember, implicit biases are basically unknown beliefs lurking in the minds of good-intentioned people. Many people have implicit bias but honestly believe they hold no prejudices. Therefore it does not even occur to them that they may be unfairly discriminating. This is why it takes conscious work to overcome implicit biases. Revealing them is only the first step. Organizations must commit themselves to training.”
THE SHIFTING MARKETPLACE
Clearly, successful organizations will be increasing diversity within their ranks. But the workforce is not the only place an organization must look to when thinking about increasing diversity. The marketplace is also growing increasingly diverse. What should your organization be considering when trying to capitalize on the new demographic markets we have been discussing?
First of all, organizations must exercise caution in not being too superficial in their marketing vision. Don’t assume that all members of a single racial group have the same experiences; significant and increasing diversity is emerging within single racial groups. For example, in 1970 only 1.3 percent of the U.S. black population was born outside of the United States. By 2000, however, that number had jumped to nearly 8 percent. Therefore, any organization wanting to target “black” consumers must understand that its target market is actually quite diverse.
Fortunately, many organizations already have a wealth of information easily available to them: their own diverse workforce. An organization expanding its marketing to target diverse demographics can first look within its own ranks and Frito-Lay well illustrates this concept. Frito-Lay is a business with a strong commitment to diversity and includes employee resources groups that focus on the needs and desires of certain communities. Listening to suggestions from its diverse employees, Frito-Lay profitably creates new products and flavors and targets its marketing. One example is the popular guacamole-flavored potato chips that were inspired in part by the company’s Latino Employee Network.
THRIVING IN THE CHANGING GLOBAL ECONOMY
There are powerful demographic sea changes taking place. Increased migration is literally changing the face of both your workforce and customers. Organizational managers must be prepared to tap into more diverse human resources. Organizations must also develop the know-how to market their products and services to an increasingly diverse population.
Businesses need to plan for the enormous impact of an aging workforce. Some baby boomers will choose to continue working while others will retire. Both choices have significant ramifications in the workplace. Organizations must be prepared to replace some older workers while accommodating workforce needs of others who remain in their positions.
Business as usual will simply not work when demographics are changing so radically. Those organizations that will thrive in the changing global economy are those that understand these demographic shifts, and managers need to be prepared with a plan to avail themselves of new human and market resources. Does your organization understand these changes? Do you have a plan?
About the Author
Lynn D. Lieber, Esq. is a seasoned employment law attorney and a nationally recognized spokeswoman on corporate ethics, harassment and discrimination law. Lieber is also founder and CEO of Workplace Answers, a San Francisco-based provider of Web-based legal compliance education.
Ms. Lieber has worked closely with Fortune 1000 companies, major university systems and large municipalities in developing a new approach with highly customized, interactive, web-based diversity training courses that focus on the business benefits of diversity. Lynn also has two decades of experience as a client-side attorney in cases involving workplace harassment and discrimination, and helps organizations avoid potentially costly and reputation-damaging litigation from workplace relationships.
Launched in 1999, DiversityBusiness, with over 50,000 members, is the largest organization of diversity owned businesses throughout the United States that provide goods and services to Fortune 1000 companies, government agencies, and colleges and universities. DiversityBusiness provides research and data collection services for diversity including the "Top 50 Organizations for Multicultural Business Opportunities", "Top 500 Diversity Owned Companies in America", and others. Its research has been recognized and published by Forbes Magazine, Business Week and thousands of other print and internet publications. The site has gained national recognition and has won numerous awards for its content and design. DiversityBusiness reaches more diverse suppliers and communicates more information to them on a more frequent basis then all other organizations combined. We also communicate with mainstream businesses, government agencies and educational institutions with information related to diversity. Our magazine reaches over 300,000 readers, a monthly e-newsletter that reaches 2.4 million, and website visitors of 1.2 million a month. It is a leading provider of Supplier Diversity management tools and has the most widely distributed Diversity magazine in the United States. DiversityBusiness.com is produced by Computer Consulting Associates International Inc. (CCAii.com) of Southport, CT. Founded in 1980.
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