5 Trends Driving the Business Case for Diversity and Inclusion
“The diversity explosion will impact every aspect of society providing immense challenges but also opportunities to prosper, unify, democratize, be more interconnected, learned and relevant.” Dr. Gilo Kwesi Logan
An explosion in diversity is currently underway in the U.S. As a result, it is imperative that business leaders, educators and workers anticipate and prepare for the emerging waves of challenges related to diversity and inclusion that lie ahead. One of those challenges is to be equipped to increase the global connectivity of schools, institutions and departments of various local and state agencies. It is therefore necessary for leaders to be knowledgeable about the latest research in trends impacting communities, educational outlets and the modern-day workforce.
The five major trends driving the business case for diversity and inclusion are:
- Changing Demographics. For the first time more than 50% of children under age 5 are people of color. Women are 50.8% of the U.S. population and account for 49% of the college-educated workforce. In 2011 people who identify as LGBT totaled approximately 9 million adults or 3.5% of the U.S. population. In 2015, millennials, born between 1981 and 2000, surpassed Generation X, born between 1966 and 1980, to become the largest share of the U.S. workforce.
- Buying Power. In 2015, the buying power of Hispanics was $1.3 trillion, up 167% since 2000. In 2017, buying power of Blacks reached $1.3 trillion, an amount larger than the GDP of Australia and Spain. The total buying power of the adult LGBT population in the U.S. is expected to reach $1 trillion in 2018 while women control $4.3 trillion of the $5.9 trillion in U.S. consumer spending that keeps companies afloat. The female persuasion also influences 70–80% of all household spending and in 2018, millennials had the most spending power of any generation at some $200 billion.
- Talent and Skill Shortages. With some 10,000 baby boomers hitting retirement age every day, most organizations recognize their succession plan is ineffective because of the vast number of baby boomers all going into retirement within a few years of each other, with less younger folks to pick up the slack. While the primary labor-force age population will be flooded with 26 million racial minorities between 2010 and 2030, a net loss of 15 million Whites is anticipated.
- Employee Expectations. Currently, only 23% of employers believe their staffers are fully aligned with the company’s purpose and a mere 13% of employees are actively engaged at work, according to a Gallup poll. Businesses used to be places where workers conformed to business norms; today, businesses have to adapt more to the expectations of employees by responding to the various elements of workforce diversification. To do this, they need to redefine what commitment to work looks like, be much more flexible, and show that they understand and value the workforce’s changing demographics.
- Globalization and Technology. In 2013, developing countries contributed 50% of the world’s GDP. Globalization will continue to broaden Americans’ understanding and acceptance of people from different cultures and nations. Technology is changing where and how we work and how customers access us. It brings about increased flexibility and removal from the traditional workplace, allowing employees to work digitally. Corporate leadership must develop cultural competencies in order to communicate and negotiate cross-culturally.
For Business Leaders: What challenges and opportunities have these changes brought to your organization, work and leadership style? What needs to shift, develop or improve in order to succeed?
For Individuals: How have you experienced these trends at your job, in your community, family and in your relationships to others? Which of these trends poses the greatest personal challenge to you and why? Greatest benefit and why?
The U.S. and globe are on the cusp of an enormous shift made apparent by the 2010 census along with the 2012 and 2016 presidential elections. As citizens of the universe, we are approaching an international, national and local demographic transformation fueled by an increasingly complex and diverse global society that must cooperate with each other despite cultural differences.
- Changing demographics: Diversity Explosion by William H. Frey; U.S. Census Bureau; Center for American Progress; Pew Research Center; Global Human Capital Trends 2014.
- Buying power: The Multicultural Economy 2013 by Jeffrey M. Humphreys; Diversity Explosion by William H. Frey; U.S. Census Bureau; What if Women Harnessed Their Purchasing Power by Lisa Wirthman; See Thru Equity; Absorptive Capacity by Willie E. Hopkins & Michael A. Gross; The Multicultural Economy 2017 by Jeffrey M. Humphreys.
- Talent and skill shortages. U.S Department of Labor; U.S Bureau of Labor Statistics; Diversity Matters by Vivian Hunt et al. Delivering through Diversity by Vivian Hunt et al.
- Employee expectations. Inside Employees’ Minds: The Transforming Employment Experience by Mercer; Diversity Matters by Vivian Hunt et al. 2017 Global Human Capital Trends.
- Globalization and technology. Diversity Explosion by William H. Frey; U.S. Census Bureau; Global Human Capital Trends 2014; Global Diversity Management by Mustafa Ozbilgin et. al. Changing Wealth of Nations 2018. 2017 Global Human Capital Trends.