Demographic Trends Increase the Need for DEI Programs

Globalization, labor shortages, digitization, major demographic shifts, and the global pandemic that began in 2020 have redefined the workforce, workplace, and marketplace. Into the 2030s, workers will continue to experience a new normal in the way they work and live as workforce predictions come true.

You may have felt or heard that adapting to trends is a disruption you’d rather avoid. However, consider that adapting to demographic changes along the diversity spectrum is an addition to you and your organization, not a disruption.

These shifts (sometimes seismic) in demographics impact the workplace. Look at these trends and changes as opportunity for growth, expansion, and even fine-tuning operations. Use them to upskill and reskill as a people leader and manager, because this will be a key driver of employee satisfaction, engagement, and retention in the decades to come. How you anticipate and/or respond determines the type of impact you’ll have.

Workforce predictions: 2030 and beyond

The workforce predictions for 2030 and beyond are quite informative. Over the years, I’ve studied workforce trends published by global consulting firms such as PricewaterhouseCoopers (PwC); Accenture; Mercer; McKinsey & Company; EY (formerly Ernst & Young); KPMG; Josh Bersin, and others. They’ve all conducted extensive research on the future of work and how it will impact workers and leaders.

The research findings provide insight into how dramatically different things will be and what new skills, habits, and behaviors people need to adopt in order to remain relevant, competitive, and sustainable. A few notable predictions include the following:

• Our world population is rapidly growing older. According to the United Nations Department of Economic and Social Affairs, people aged 65 or older is projected to reach 1.5 billion by 2050.
• Artificial intelligence may replace jobs humans once held and create jobs that didn’t exist before.
• Employers may recruit global, contract-based workers instead of employing full-time workers. Traditional offices and corporate headquarters may go by the wayside.
• Traditional retirement will peter out as workers continue working as long they can.
• Workers will demand more comprehensive benefits and “best place to work” environments, which may lead to job hopping.
• You know how a smart watch can track your steps and health activity? Imagine sensors that employers can use monitor employees, not just at work but all the time.
• Driverless cars may make commuting faster.

An increasingly global world of business

Globalization occurs when a business operates in a country outside its original location. Globalization allows for business growth because it provides a platform for companies to offer products in many locales, regions, and countries.

Labor costs and the price of manufacturing vary all over the globe, and countries often offer economic incentives such as tax breaks and land grants to win international business.

Expanding to another country presents an opportunity to employ labor from that particular location, which means an opportunity for cultural additions and diversity education.

As companies expand their global footprints, their global workforces expand as well. But this process isn’t as simple as it may sound. Essentially, successful global expansion hinges on the following:

• Knowledge management: What does the company know about the countries it wants to expand to or the country where it employs workers? How is the company utilizing that information?
• Skillfulness and acumen: How is the organization using its data analytics to develop and execute strategy for the production stream, operations, and people management?
• Agility: How quickly and appropriately is the company responding to market changes across the globe? And is your workforce mobile (can employees work from anywhere and move quickly)?

Capturing and then strategically utilizing appropriate data is an important factor in effective global expansion. This data should reveal information about the organization and its market.

Also, optimizing your data infrastructure is something to consider when expanding globally. What are your current and future IT needs, and how will a transition to the cloud impact those needs while allowing you to grow?

Another important factor is having in-country talent and a knowledge base that ensures your organization’s ability to enter or exit a market as business needs change. Establishing partnerships and alliances in the people management and talent development space allows you to meet human resource needs such as hiring, payroll, and performance management.

Many of today’s employees want the ability to live anywhere and work anywhere. So, how do you attract the best talent from anywhere in the world to work anywhere in the world?

Here are three important considerations for hiring globally:

• Establish a legal presence in the locale through a foreign subsidiary.
• Hire an independent contractor from overseas. This approach may be a more viable option until you’re ready for a direct hire.
• Manage compliance. Adhering to local and national laws of operations is essential, and to do so, you need talent onboard to manage this area.

If you’re interested in recruiting talent to work globally, here are a few tips:

• Provide the employee with a “best place to work” experience, beginning with the recruitment and onboarding processes.
• Provide a diverse work community.
• Establish excellent corporate social responsibility practices.
• Offer comprehensive and competitive benefits and services.
• Allow for flexibility in how and when workers work and get paid.

An increasingly diverse workforce

With increased globalization comes an increasingly diverse workforce. Five generations are currently in the workplace (seniors, baby boomers, Generation X, millennials, and Generation Z), with millennials and Gen Zers making up approximately 50 percent of the workforce. Add gender, race, ability, LGBTQ identity, diversity of thought, and many other attributes, and you’re looking at an intricate mosaic of individuals.

Generational diversity

The biggest demographic shift impacting the diverse workforce is generational diversity. Because people are living longer and healthier lives, they’re also working much longer, past the average retirement age of 65.

In fact, the United Kingdom recently removed its mandatory retirement age of 65. In the United States, millennials make up 50 percent of the workforce, and that number is expected to reach 75 percent by 2030.

Although people are living and working longer, baby boomers are just now retiring from the traditional full-time workplace. In addition, Gen Xers are looking toward retiring the 40- to 60-hour work week for more much more flexibility in how and when they work. That makes sense, because Gen Xers are now the in-between generation caring for aging parents and raising children.

Given these factors, considering how the generational shift will impact your workplace is important. For instance, do you have succession plans and promotion plans in place?

An organization’s competitive advantage often boils down to its human capital — in other words, the people who possess the knowledge, skills, and experience needed in the company. So, think of the diversity landscape as a garden of talent that needs to be cultivated. Cultivation takes foresight, planning, execution, and a desired outcome for the growing talent harvest. Think about what your executable plans for growing your talent are.

You can also utilize the following tips toward the shifting aging workforce:

• Make the most of workers’ skillsets through efficient and productive work design.
• Maintain skilled leaders and managers who can effectively lead across generations.
• Deal with conflict by managing it fairly, communicatively, and equitably.
• Foster an inclusive environment that demonstrates value for all ages and the dimensions of diversity.

The huge demographic shift of the aging workforce has the potential to disrupt the productive flow of the workplace. But it also provides an opportunity for lesson-learning and adapting so that the workplace can flourish by gleaning from the top talent aging toward retirement and cultivating the talent in the middle and beginning of the career path.

Gender diversity

Gender diversity is often the first aspect of change within the diversity, equity, and inclusion space. Companies tend to begin their DEI work by increasing the gender diversity within management and leadership roles.

According to a 2020 McKinsey & Company study, companies whose leadership was gender and culturally diverse financially outperformed their peers. The study found that companies with more women in its executive ranks were 25 percent more likely to have above-average profitability than companies with less females in its executive ranks.

The broken rung

McKinsey & Company’s Women in the Workplace 2020 Report found that although women are outpacing men in terms of earning degrees, the disparity in pay and leadership positions in organizations still remains.

In fact, the progress toward pay equity is slow. To this point, the United States acknowledges an Equal Pay Day every year to bring light and action toward pay equity for women of all racial and ethnic backgrounds.

Women are still underrepresented in leading corporations, on boards, and in senior executive roles. For example, in 2021, only 41 Fortune 500 corporations were led by women, two of whom were Black women. This number is significant because only three Black women have ever led a Fortune 500 company.

This underrepresentation may stem from many causes, but one of the biggest challenges is what Leanin.org called the broken rung. A sweeping 2021 study looking at 329 companies employing 13 million people found that the biggest obstacle most women face with being promoted is that first step up from entry-level roles to manager. For example, the study showed that for every 100 men promoted to a management position, 86 women are promoted.

At the beginning of 2020, women held only 32 percent of manager positions, while men held 88 percent. So women are significantly left out of entry-level management positions that would put them in the succession pipeline for significant promotion along a leadership track.

Racial and ethnic diversity

Racial minorities are the primary demographic engine of future growth in the United States, countering an aging, and soon-to-be declining white population. The 2020 census data projected that the nation will become “minority white” in 2045. During that year, whites will comprise 49.7 percent of the population in contrast to 24.6 percent for Hispanics, 13.1 percent for blacks, 7.9 percent for Asians, and 3.8 percent for multiracial populations.

Among the minority populations, the greatest growth is projected for multiracial populations, Asians and Hispanics with 2018–2060 growth rates of 176, 93, and 86 percent, respectively. The projected growth rate for the Black population is 34 percent. The new census projections also indicate that, for youth under 18 (the post-millennial population), minorities will outnumber whites in 2020.

Racial diversity is growing in many nations. According to a recent survey conducted by Pew Research Center, approximately 69 percent of people surveyed across 27 nations said their respective nations have grown more diverse over the last 20 years.

Close to half of survey respondents say that they favor a more racially diverse nation. Even though racial diversity is still growing in some nations, other nations, such as Trinidad and Tobago, already have a very diverse population. Groups in this country include East Indians, Afro-Trinidadians, and mixed races. Belize is another country with racial diversity, with its population made up of Mestizos, Kriols, Mayans, East Indians, and other races.

Guyana is also racially diverse. Races that reside in this nation include East Indians, blacks, mixed races, and Chinese.

Other racially diverse countries throughout the world include:

• Brazil
• Canada
• Colombia
• Panama
• Suriname
• United States

In the United States, the most diverse states are California, Texas, Florida, Hawaii, New Jersey, and New York.

While many companies increasingly understand the value of recruiting and retaining diverse talent, many companies fail to recognize the benefits of having a more racially and ethnically diverse workforce.

Factors such as prejudice and stereotypes toward certain racial or ethnic groups, whether conscious or unconscious, are still too common. A number of global studies continue to tout the benefits that a more ethnically diverse workforce brings including better returns on sales, more innovative products and services, and the ability to meet the needs of more diverse customers and clients.