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What is Diversity Management?

There are many definitions of "diversity management", and numerous terms are used to describe essentially the same thing. For instance, there are various definitions of "diversity", "productive diversity", "diversity management" and "workplace diversity". In a pragmatic sense, the common ground in these definitions includes:

  • they acknowledge the reality that people differ in many ways;
  • they identify implications for the workplace, or society generally, that arise because of the diversity; and
  • they suggest or imply strategies to ensure that these issues are addressed, in the interest of the workplace, or society generally.

Diversity management is a tool for capturing the diversity dividend. Diversity management focuses on managing the difference within a company’s workforce, capitalising on the benefits of diversity and minimising workplace challenges.

Diversity management contributes significantly to the bottom line. The main ways diversity management produces the diversity dividend are:
  • improving the efficiency of HRM functions;
  • fostering superior decision-making, problem-solving, creativity, and innovation; key factors in the creation of knowledge companies;
  • developing cross-cultural capabilities that facilitate operations in culturally complex environments at home and abroad; and
  • implementing new product/service developments and new sales/marketing strategies for diverse customer bases.

There are two distinct but connected channels in diversity management, which will lead to superior company performance. The first channel focuses on how to tap into the benefits that flow from effectively managing diversity. The second channel focuses on corrective strategies to address ineffective diversity management, which imposes costs.

Effective diversity management leads to improved individual and organisational performance. This is due to the powerful effects of diversity on problem-solving, decision-making, innovation and creativity.

However, having a diverse workforce does not, in itself, translate into bottom line benefits for companies. Diversity must be managed in order for companies to reap a diversity dividend. Companies must commit to effectively managing diversity to ensure that the unique skills, perspectives and knowledge of their workforces are channelled into producing a diversity dividend.


Diversity and Sustainability

Traditional approaches to diversity used to primarily refer to how companies addressed legislative and regulatory issues of equal employment opportunity and affirmative action related to race, gender and disability. Today, companies have expanded their understanding and approach to diversity.

Firstly, they have broadened their understanding of what constitutes difference so that diversity is about acknowledging any difference that can impact on the fair or equitable treatment of people - this can include differences in gender, race, age, culture, disability, religion, sexual orientation, or any other characteristic that helps to shape a person's perspective. Diversity in this context can encompass any way people differ.

Secondly, companies have begun to capitalise on differences and extract the value to the business that can be gained from acknowledging, valuing and developing the business opportunities that arise from this difference.

In this context, productive diversity is a strategy and approach that sees the positive opportunities for business from a diverse workforce, marketplace and supplier base. Businesses that embrace a productive diversity model take advantage of these opportunities to enhance their competitive edge and deliver value and increased returns for shareholders.



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