Workforce diversity strategies

Workforce diversity strategies

Workforce diversity strategies focused on gender ahead of age, ethnicity: Mercer report

  • 4 June 2012
  • Australia, Melbourne

Australian employers are putting all their workforce diversity eggs in one basket, focusing on gender ahead of age, ethnicity or disability, according to a new Mercer report, Asia Pacific Diversity & Inclusion Survey.

The survey of 355 employers across the Asia-Pacific region found respondents agree that having a workforce diversity and inclusion strategy is important to business success, but the majority are only addressing gender imbalances.

Within Australia, survey respondents identified gender and age as the key diversity issues currently impacting the workplace. However, 90% of these organisations have placed their diversity focus on gender, followed by 49% focusing on ethnicity and race, 39% focusing on age and just 10% on disability.

Alison Tickner, Mercer’s Head of Leadership, Diversity and Learning Solutions for Asia Pacific said Australian businesses must look at expanding the diversity programs on offer.

“Australia has an ageing population, yet employers are failing to tap into this talent pool as a way to fill skills shortages. Business leaders recognise the changing demographics in the workplace is an important issue, yet many aren’t incorporating this into their workforce planning and mentoring programs”, said Ms Tickner.

Mercer argues that workforce diversity isn’t just an issue for the HR or recruitment department, but a way to improve business practices and therefore results.

“Companies perform better when they have genuine diversity in their ‘brains trust’: people from different backgrounds providing fresh perspectives, insights and expertise. Diversity isn’t about ticking boxes or being politically correct – it’s about building an organisation that avoids a herd mentality and delivers better business outcomes,” Ms Tickner said.

Mercer points to a recent report by McKinsey showing the clear economic benefits of incorporating a diverse workforce. The findings released in April 2012 found global businesses which ranked in the top quartile of executive-board diversity, received a return on equity 53% higher on average than those businesses in the bottom quartile.

While the Federal Government is focused on encouraging employers to recruit and retain more mature-aged workers, the survey found that companies with diversity strategies will continue to focus on developing women for leadership roles.

“Australia has seen quotas become a key part of diversity strategies; from women on boards to greater employment of older workers, but this may not be enough to instil a genuine culture of diversity within workplaces. Australian business leaders need to avoid putting all their eggs in one basket and ensure they incorporate widespread diversity programmes which truly include multiple segments of the workforce,” Ms Tickner said.

Despite their best intentions, 74% of respondents in Australia indicated there are real barriers to implementing their diversity strategy, and 50% of respondents noted their local business leaders understand the importance of diversity and inclusion but are not actively involved.

“The survey revealed a level of resistance from middle management to actively change organisational cultures to ensure diversity strategies can survive. Business leaders need to become the champions of change and align diversity and inclusion strategies with their core business strategies if they want to see real, sustainable change,” said Ms Tickner.

About the survey
In light of the increasing importance in Diversity and Inclusion practices in Asia Pacific, Mercer has taken a closer look at diversity & inclusion (D&I) strategies and practices in the region to understand the unique reasons why companies in Asia Pacific are looking at diversity as a competitive advantage.

Mercer conducted the Asia Pacific Diversity & Inclusion Survey in December 2011 to January 2012 which yielded 355 responses from companies located in seven key markets across the region: Australia, China, India, Japan, Hong Kong, South Korea and ASEAN. Mercer also interviewed 31 senior executives throughout the Asia Pacific region. The companies chosen include those spearheading diversity and inclusion efforts as well as those interested in enhancing their current diversity and inclusion strategies.

APPENDIX

Figure 1: Australian organisation’s main diversity and inclusion areas of focus

Figure 2: Top issues of focus for 2012

Figure 3: Priorities for developing the diversity and inclusion strategy

Global country highlights:

Diversity & inclusion programs implemented by companies in Asia Pacific are most likely to target gender, with three-quarters of those surveyed listing gender as the main focus of their diversity efforts. Consistent with this focus, the most common diversity programs offered by companies are gender-related, such as flexible work arrangements (52%), mentoring (43%), and family-friendly policies (43%).

China

46% of respondents didn’t have a D&I strategy, largest percentage in the region. The top three key issues that companies are focusing on from a D&I perspective in China are: National Cultures at 63%, being the largest percentage of focus on this issue in the region, Gender at 53% , being the least amount of focus on this topic in the region, and Race & Ethnicity at 47%. The key demographic trend impacting on the future HR strategy development in China is the movement of multiple generations in the workforce with a focus on dealing with Gen Y at 45%.

Japan
33% of the companies had a country focused D&I strategy, second in the region on having a market driven focus. The top three key issues that companies are focusing on from a D&I perspective in Japan are: gender at 95%, being the highest focus on this topic in the region, followed by age at 46% and race & ethnicity at 43%. The key demographic trend impact on the future HR strategy development in Japan is the aging population with 60% of the respondents concerned to address this issue.

Hong Kong
Most respondents from HKG had either an APAC D&I strategy at 30% or a global strategy at 26% . The top three key issues that companies are focusing on from a D&I perspective in Hong Kong are: gender at 65% followed by race & ethnicity at 47 % and national cultures at 41%. Integration of multiple cultures and the ethnic groups seems to be growing in importance for this market. The key demographic trend impact on the future HR strategy development in Hong Kong is higher turnover due to new work expectations from employees at 44%.

India
The top three key issues that companies are focusing on from a D&I perspective in India are: Gender at 91 %, national cultures 33% and Disability at 39% being the highest in the region with focus on this topic. The key demographic trend impact on the future HR strategy development in India is higher turnover movement due to new work expectations from employees at 44%.

Singapore
Singapore showed its regional hub tendency with 40% of the respondents indicating their company has an Asia Pacific D&I strategy. The top three key issues that companies are focusing on from a D&I perspective in Singapore are: Gender at 60%, national cultures at 55% and race & ethnicity 40%. The key demographic trend impact on the future HR strategy development in Singapore is multiple generations in the workforce specially focusing on Gen Y with 57% percent of the respondents concerned about how to address this issue.

About Mercer

Mercer is a global leader in talent, health, retirement and investments. Mercer helps clients around the world advance the health, wealth and performance of their most vital asset – their people. Mercer’s 20,000 employees are based in 43 countries and the firm operates in over 140 countries. Mercer is a wholly owned subsidiary of Marsh & McLennan Companies (NYSE: MMC), a global team of professional services companies offering clients advice and solutions in the areas of risk, strategy and human capital. With 55,000 employees worldwide and annual revenue exceeding $12 billion, Marsh & McLennan Companies is also the parent company of Marsh, a global leader in insurance broking and risk management; Guy Carpenter, a global leader in providing risk and reinsurance intermediary services; and Oliver Wyman, a global leader in management consulting. Follow Mercer on Twitter @MercerAU @MercerInsights

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