6.3 – The Changing Workforce

The focus of human resource management is people. People bring with them feelings, emotions, perceptions, values, prejudices and are often unpredictable. Data, on the other hand is generally neat, quantifiable and often predictable. Thus, HR processes have to adapt and be particularly sensitive to how people and society change and evolve over time.  Workers, like the society in which they live, are subject to constant change. Some of these changes have been slow and steady while others are very sudden (COVID-19). We discuss these changes, and their implications for HRM in this section.

Social Factors: The Constantly Evolving Workers

Diversity

The makeup of the Canadian workforce has changed dramatically over the past 50 years. In the 1950s, more than 70 percent of the workforce was composed of males.^[19] Today’s workforce reflects the broad range of differences in the population—differences in gender, race, ethnicity, age, physical ability, religion, education, and lifestyle. Most companies strive for diverse workforces and HR managers work hard to recruit, hire, develop, and retain employees from different backgrounds. As we will see later in this chapter, these efforts are motivated in part by legal concerns: mismanagement in recruiting, hiring, advancement, disciplining and firing has legal consequences under applicable law. However, reasons for building a diverse workforce go well beyond mere compliance with legal standards. It even goes beyond commitment to ethical standards. Diversity is simply good business! In a competitive market, an organization cannot afford to limit their talent pools arbitrarily. Imagine a hockey team that would only hire players who love Death Metal music (let’s assume that 20% of the population falls into that category). This means that this team would exclude 80% of all available players from the draft. The likelihood of that team ever winning the Stanley Cup with such a restricted pool of players is very, very slim! The point is that organizations cannot afford to exclude workers based on frivolous characteristics. When they do exclude workers, as it is their prerogative, it should be based on characteristics that are proven to be related to performance. In the case of a hockey team: skating, puck handling, vision, etc.

A study by Cedric Herring called Does Diversity Pay? (Herring, 2006) reveals that diversity does in fact pay. The study found that the businesses with greater racial diversity reported higher sales revenues, more customers, larger market shares, and greater relative profits than those with more homogeneous workforces. Other research on the topic by Scott Page, the author of The Difference: How the Power of Diversity Creates Better Groups, Firms, Schools, and Societies (Page, 2007) ended up with similar results. Page found that people from varied backgrounds are more effective at working together than those who are from similar backgrounds, because they offer different approaches and perspectives in the development of solutions.

Eric Foss, chairperson and CEO of Pepsi Beverages Company opined, “It’s not a fad. It’s not an idea of the month. It’s central and it’s linked very directly to business strategy” (Holstein, 2009). A study by the late Roy Adler of Pepperdine University shows similar results. His 19-year study of 215 Fortune 500 companies shows a strong correlation between female executives and high profitability (Adler). Another study, conducted by Project Equality, found that companies that rated low on equal opportunity earned 7.9 percent profit, while those who rated highest with more equal opportunities resulted in 18.3 percent profit (Lauber, 2011). These numbers show that diversity and multiculturalism are certainly not a fad, but a way of doing business that better serves customers and results in higher profits.

Employees’ Expectations

Another trend that HRM needs to account for is how employees’ values and attitudes are evolving. It is important for HRM to meet employees’ expectations when it comes to work.  We outline three broad areas for which expectations have evolved drastically over the past 20 years.

Rights and ethics

Employees are more demanding than ever when it comes to their rights and the behaviour of their employers. Regarding their rights, employees are more informed than ever. With the rise of social media, a new phenomenon is also taking place in organizations: employee militancy. People are willing to commit their time and energy to an organization, but if that organization fails to meet their expectations in terms of values or ethics, they will no longer remain silent. Employee militancy has moved from advocating for workers right (e.g., better pay, gender equity) to pushing for a better society. A good example of this is how Facebook employees staged a virtual protest [New Tab], pressing Facebook executives to take a tougher stand on Donald Trump’s inflammatory posts. Some of the issues that have become very important for employees are listed below, with a relevant example demonstrating it:

Sustainability: At Amazon, employees organized an ‘online walk out’ to protest the company’s stance on climate change. Since late last year, a group of workers within Amazon have been organizing to push the company to radically reduce its carbon emissions. On 2020-09-20, Amazon workers around the world will walk out of their offices to join the Global Climate Strike. Read Hey, Jeff Bezos: I work for Amazon – and I’m protesting against your firm’s climate inaction [New Tab] to learn more.

Privacy:  Humanyze [New Tab], a Boston-based start-up makes wearable badges equipped with sensors, an accelerometer, microphones and Bluetooth. The devices — just slightly thicker than a standard corporate ID badge — can gather audio data such as tone of voice and volume, an accelerometer to determine whether an employee is sitting or standing, and Bluetooth and infrared sensors to track where employees are and whether they are having face-to-face interactions (see video below). The privacy of workers is increasingly threatened by such technological advances and many employees are taking their opposition to this technology to court.

Work life balance

Work-life balance is an important aspect of a healthy work environment, and more and more, employees are insisting on it. Maintaining work-life balance helps reduce stress and helps prevent burnouts in the workplace. To satisfy the assumed desires of employees, many employers overcompensate by adding game rooms and beanbags to spice up the work environment. An entire industry has popped up surrounding making workspaces more “millennial-friendly.”  WeWork [New Tab], one of the most well-known of this new breed of property managers, is known for designing such work environments.  However, these environments tend to blur the boundaries between work and life, and many employees report that they do not care for these types of perks. One of the answers for employers is to create a flexible work environment, one that satisfies the work-life balance needs of most employees.

Attribution

Except where otherwise noted, this chapter is adapted from “The Changing Workforce” In Human Resources Management – Canadian Edition, licensed under CC By-NC-SA 4.0.

Original Source Chapter References

Adler, R. D. (2001). Women in the executive suite correlate to high profits. Harvard Business Review, 79(3), 30-32.

Forsythe, J. (2005). Leading with Diversity. New York Times. Retrieved July 13, 2011, http://www.nytimes.com/marketing/jobmarket/diversity/hilton.html.

Herring, C., “Does Diversity Pay? Racial Composition of Firms and the Business Case for Diversity” (paper presented at the annual meeting of the American Sociological Association, Montreal, Canada, August 11, 2006), accessed May 5, 2009, http://citation.allacademic.com/meta/p_mla_apa_research_citation/1/0/1/7/9/pages101792/p101792-1.php.

Holstein, W. J., “Diversity is Even More Important in Hard Times,” New York Times, February 13, 2009, Retrieved 25, 2011, from http://www.nytimes.com/2009/02/14/business/14interview.html.

Lauber, M. (n.d.).  Studies Show That Diversity in Workplace Is Profitable. Project Equality. Retrieved July 11, 2011, from http://www.villagelife.org/news/archives/diversity.html.

Page, S. E.. (2007). The Difference: How the Power of Diversity Creates Better Groups, Firms, Schools, and Societies. Princeton University Press.

Plaut, V. C., Kecia M. Thomas, & Matt J. Goren. (2009). Is Multiculturalism or Color Blindness Better for Minorities? Psychological Science, 20(4), 444–46.