Diversity in Human Resources

Learning Outcomes

  • Discuss how business benefit from diversity in the workforce

What Is Diversity?

The term diversity often generates controversy, confusion, and tension. What does it mean? Is it the same as affirmative action?

When people refer to diversity, they may be thinking first of ethnicity and race, and then, of gender; however, diversity is much broader than that. The following definition, from Workforce America! Managing Employee Diversity As a Vital Resource, does a good job of capturing the subjective nature of the term: Diversity is “otherness or those human qualities that are different from our own and outside the groups to which we belong, yet present in other individuals and groups.” In other words, diversity can apply to anyone you perceive to be different from yourself. Dimensions of diversity include, but are not limited to age, ethnicity, ancestry, gender, physical abilities/qualities, race, sexual orientation, educational background, geographic location, income, marital status, military experience, religious beliefs, parental status, and work experience.[1]

How Businesses Benefit from Diversity

There are many arguments for fostering diversity in business, including the availability of talent, the enhancement of interpersonal innovation, risk avoidance, and appealing to a global customer base. The business case for diversity is driven by the view that diversity brings substantial potential benefits, such as better decision making, improved problem solving, and greater creativity and innovation, which lead to enhanced product development and more successful marketing to different types of customers.

Innovation. It is widely noted that diverse teams lead to more innovative and effective ideas and implementations. The logic behind this is relatively simple. Innovative thinking requires individuals to go outside of the normal paradigms of operation, using diverse perspectives to reach new and creative thinking. A group of similar individuals with similar skills is much less likely to stumble across or generate new ideas that lead to innovation. Similarity can cause groupthink, which diminishes creativity.

Localization. Some theorize that, in a global marketplace, a company that employs a diverse workforce is better able to understand the demographics of the various consumer markets it serves, and is therefore better equipped to thrive in that marketplace than a company that has a more limited range of employee demographics. With the emerging markets around the world demonstrating substantial GDP growth, organizations need local talent to enter the marketplace and to communicate effectively. Individuals from a certain region will have a deep awareness of the needs in that region, as well as a similar culture, enabling them to add considerable value.

Adaptability. Finally, organizations must be technologically and culturally adaptable in the modern economy. This is crucial to reacting to competitive dynamics quickly and staying ahead of industry trends. Diversity fosters creative thinking and improved decision making through a deeper and more comprehensive worldview. A company willing to diversify draws from a larger talent pool and hires individuals with diverse skill sets. The value of this, particularly at the managerial level, is enormous.

Practice Question

CASE Study: Little Red Hen

The Little Red Hen business started as a nursery in 1993. The nursery was a place where those with developmental disabilities, such as autism, cerebral palsy, epilepsy, and Down Syndrome were employed as a means of instilling social and work skills.

Today Little Red Hen has become a Non-profit 501(c)(3) corporation that has grown to 6 locations: Nursery, Gift, Kitchen, Vintage, Floral, and Home. Employees generally come from High School and Adult Special Education programs and perform most of the necessary work of a retailer: waiting on customers, stocking shelves, and point-of-sale data entry. No employee is paid below minimum wage at LRH.

How does Little Red Hen benefit from their diverse employee base? One obvious way is how the business has grown to multiple locations and multiple businesses. Another is how they are able to differentiate their businesses from others: #Retail with a Purpose. As 100% of their sales and donations benefit quality programs for children and adults, customers are rewarded for their loyalty to LRH. These programs include early intervention programs, social groups, and educational activities.

“The nicest people that I have ever dealt with.”

“Their service is friendly, sweet, just top shelf.”

Customer testimonials tell the story of the quality of the operation. Unlike other employers that have to motivate employees, the workers at Little Red Hen are thrilled to be employed and are highly motivated.

Little Red Hen is more than just another retailer, they are an essential part of the community.

Little Red Hen company logo, which is a cartoon hen with a red apron on. Below the company's name is its description: "A 501(c)(3) Non-profit Corporation. Serving Children and Adults with Developmental Disabilities".


Little Red Hen. https://www.littleredhen.org/ Accessed April 24, 2022.

Role of Human Resource Management

When it comes to the workplace, the human resource department has a great deal of responsibility in managing the overall diversity of the organization. Human resources should consider diversity within the following areas:

  • Hiring
  • Promotion
  • Compensation equality
  • Training
  • Employee policies
  • Legal regulations
  • Ensuring accessibility of important documents (e.g., translating human resource materials into other languages so all staff can read them)

The role of human resources is to ensure that all employee concerns are being met and that employee problems are solved when they arise. Human resource professionals must also pursue corporate strategy and adhere to legal concerns when hiring, firing, paying, and regulating employees. This requires careful and meticulous understanding of both the legal and organizational contexts as they pertain to diversity management.

Challenges to Diversity

There are various challenges to achieving diversity in the workplace, ranging from the difficulties of defining the term to the individual, interpersonal, and organizational challenges involved in implementing diversity practices. Though the advantages of diversity are well established, establishing a more diverse workforce brings with it obstacles, in both the assimilation of new cultures into the majority and wage-equality and upper-level opportunities across the minority spectrum. Some of the most common challenges to building a diverse workforce are the following:

  • Stereotypes. One challenge of creating diversity is the biases individuals in the organization may have about others similar to or different from them. This is essentially a tendency to stereotype, which significantly narrows the worldview of the individuals within the organization.
  • Culture.  Managers must understand the customs and cultural norms of employees and ensure that they don’t violate important cultural rules. It is the role of the managers to change the existing organizational culture to one of diversity and inclusion.
  • Communication. Whether via language or cultural signals, communication can be especially challenging in the interpersonal arena. Ensuring that all professionals (human resources, management, etc.) have access to resources for localizing or translating issues is a significant challenge in many situations. Poor cross-cultural communication can lead to employee misunderstandings or workplace inefficiencies.

While diversity has clear benefits from an organizational perspective, an additional challenge with diversity comes from mismanagement. Due to the legal framework surrounding diversity in the workplace, there is a potential threat involving the neglect of relevant rules and regulations. Fair, ethical, and nondiscriminatory hiring practices and pay equity for all employees are absolutely essential for managers and human resource professionals to understand and uphold. The legal ramifications of missteps in this particular arena can have high fiscal, branding, and reputation costs.

  1. Loden, M., Rosener, J.B., 1991. Workforce America! Managing Employee Diversity as a Vital Resource. Illinois: Business One Irwin