Diversity and flexibility in the workplace
We hear a lot about diversity and flexibility in the workplace, but what do these terms really mean from an employer’s perspective? A good starting point is to recognise that the Australian workforce is now comprised of a wide range of people with different backgrounds. Some of these differences are fixed (e.g. gender, age, ethnicity, race, sexual orientation and physical attributes); others can be changed (e.g. marital status, education level, religious beliefs, parental status).
Since the 1970s Australia has responded to the increasing diversity of our population with a range of laws designed to combat discrimination and maintain equality employment opportunity (EEO). Today there are at least 16 federal, state and territory legislative Acts that deal with discrimination and have direct impact on the workplace. These laws make Australia one of the world’s most proactive countries in recognising diversity and protecting EEO.
However, from an employer’s perspective these laws impose a relatively strong regulatory regime on Australian workplaces, without providing employers with much guidance over how to effectively manage diversity. There has even been a move to introduce affirmative action provisions within workplace laws, with larger companies having to report affirmative action plans to government authorities.
This focus on anti-discrimination and EEO via legislation has created a strong “stick” with which to punish employers who violate the provisions of these laws. However, it offers relatively little by way of a “carrot” to demonstrate to employers the benefits of effective diversity management within the workplace.
In recent years, this “stick” without a “carrot” has led to what some researchers have described as a “multicultural rollback”, with opposition to multiculturalism and diversity expressed by politicians, the media, and the broader community. Yet diversity within the workplace can be positive if it is managed effectively.
Workplace diversity can be a good thing
Despite Australia’s highly legalistic approach to workplace diversity, employers should not see diversity as a negative. Rather than resisting diversity it should be embraced and proactively managed to get the best productivity from available staff.
The concept of “Diversity Management” has its origins in the United States civil rights movement, which led to the Civil Rights Act 1964. This made discrimination unlawful and triggered a greater recognition of the importance of managing diversity. In 1987 the Hudson Institute published a report, Workforce 2000, in which they noted the increasing diversity of the American workforce, and the need for employers to learn how to effectively manage diversity. This included dealing with a workplace in which there would be more older workers, more women, ethnic minorities, migrants and people with special needs such as those with disabilities.
It should be noted that Diversity Management is not the same as EEO. While EEO assumes everyone is the same, Diversity Management assumes that everyone is different. This “sameness” versus “difference” dichotomy is important as the former suggests that everyone has the same opportunities based on their having similar backgrounds, abilities and skills. By comparison the notion of difference assumes that because not everyone is the same, it is potentially detrimental to some individuals to treat everyone the same and expect everyone to behave the same way.
For employers, the process of Diversity Management should be viewed as part of a strategic approach to the management of staff. While more research is needed, there is evidence of a positive impact on productivity. For example, a study of gender diversity and employee productivity in 200 Australian publicly listed companies over the period 2002-2005 found significant and positive relationships between workplace gender diversity and employee productivity.
Workforce diversity can also help small to medium enterprises (SMEs) access international markets. It can also enhance the firm’s level of innovation through the introduction of different perspectives and new ideas.
During the 1990s Diversity Management practices and principles flowed from the United States to other countries including Australia. They were initially embraced by both researchers and employers, exploring ways in which the ability to harness differences within the workforce for positive outcomes. These include the ability to create a more productive workplace environment, and one where all employees feel valued and able to fully apply their talents. However, in recent years the focus on Diversity Management has diminished, which effectively removes the opportunity for a pragmatic “carrot” and leaves only the legalistic “stick”.
Using flexible work arrangements to manage diversity
Although Diversity Management offers a potentially valuable strategic approach to managing workplace diversity it suffers from a lack of effective tools that employers can use when trying to implement strategies. One potentially useful tool is flexible work arrangements (FWA).
FWA is well understood within the Australian workplace and involves the modification of work patterns, schedules, start and finish times, even locations. Commonly used FWA strategies are flexibility in hours worked (flextime), and flexibility in physical location (flexplace). However, flexibility can also be applied to the duration of a work contract (flexlength), and the nature of benefits received (flexbenefit).
FWA offers a way for employers to address the needs of a diverse workforce, providing flexibility to employees that have special needs, and can produce “win-win” outcomes for both the employer and the employees. Effectively used FWA policies can address the needs of a diverse workforce, boost employee productivity, and enhance the resilience and share value of a business. However, it requires careful management and even a reinvention of the organisation’s culture.
Properly used FWA can serve to dissolve difference and unlock the value of all employees regardless of their background. However, it must also deliver benefits to both the employee and the employer. Achieving this “win-win” outcome will require employers to recognise workplace diversity as a strategic challenge. They will need to rediscover Diversity Management and learn how to use the existing tools of FWA to navigate the often complex and legalistic EEO environment to effectively manage an increasingly diverse workforce.
This article by Tim Mazzarol arises out of a research project conducted by the Small Enterprise Association of Australia and New Zealand (SEAANZ), for Biz Better Together, an initiative established by the Australian Chamber of Commerce and Industry. It is supported by the Department of Employment under the Productivity and Education Training (PET) Fund.