What is workforce diversity

The colorful workforce diversity at all levels, especially with regard to age diversity


1 16 The colorful workforce Diversity at all levels, especially with regard to age diversity

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3 18 Workforce structures reflect social and demographic developments and are primarily shaped by one thing: diversity. How various workforces can be effectively designed has long been a key issue in HR policy. Teams of different ages, in particular, who use the interplay of new impulses and proven experience to develop creative new solutions, play an important role in the sustainable competitiveness of companies. THE AUTHOR DR. ANDREA HAMMERMANN Senior Economist in the field of labor market and the world of work, Institute of the German Economy, Cologne. Her main research interests are changes in work organization forms, life phase orientation in company personnel policy, resilience, and quality of work. The job offer in Germany is becoming more and more diverse. This is particularly evident in the increased participation in the labor force of women, the elderly, people with disabilities and people with foreign roots. Around 75 percent of all women between the ages of 20 and 64 were gainfully employed in Germany in 2017. This means that women are still less likely to be gainfully employed than men, but there is a positive trend: In the past ten years, the participation of women in the labor force has increased by around nine percentage points (Destatis 2018, 6). In addition to the positive economic development that has generally spurred the labor market in recent years, women in particular benefit from the structural change towards a service society. And especially in the health sector, in which the proportion of women is particularly high, skilled workers are desperately sought in many places, a demand that the domestic labor market can no longer meet on its own. The proportion of workers with foreign roots has also increased. According to the Federal Statistical Office, 11.5 percent of those in employment between the ages of 20 and 64 had foreign citizenship in 2017 (Destatis 2018, 18). Between 2007 and 2017 the number increased by around 48 percent. For EU citizens, who make up slightly more than half of the 4.5 million gainfully employed people with foreign citizenship, the 2004 Law on Freedom of Movement has made working in countries of the European Union much easier. But more and more skilled workers are also being sought outside the European Union. To make this easier, the Skilled Workers Immigration Act came into force in March 2020 for the immigration of qualified skilled workers from third countries (Federal Government 2019). Immigration is also important for the labor market against the background of the local demographic development with low birth rates. The baby boomers are about to retire. The effect of an aging society on the labor market is currently weakened by the increasing participation of older people in the labor force: while 33 percent of 60 to 64 year olds were employed in 2007, the figure is 58 percent in 2017 (Destatis 2018, 66). In addition to the discontinuation of early retirement regulations, the increase is also likely to be related to the increasing shortage of skilled workers: Many companies are becoming less and less able to do without their older employees because there is simply a shortage of junior staff. On the other hand, the employment of older people is slowed down by the introduction of the deduction-free pension after 45 contribution years from 63 years, which was introduced in July 2014. People with disabilities are also increasingly employed. According to the Federal Statistical Office, more than 41 percent of severely disabled people between the ages of 15 and 64 were gainfully employed in 2013. This corresponds to an increase of almost nine percentage points since 1999 (Flüter-Hoffmann / Kurtenacker 2015, 7). With the increasing presence of previously underrepresented groups on the labor market, the labor supply is becoming increasingly differentiated. Gender, ethnic origin, age and disability are just four characteristics of diversity. In addition to the core dimensions anchored in the General Equal Treatment Act, which also include religion and worldview as well as sexual orientation, diversity can be defined even more broadly. Similarities and differences between employees can also be determined with regard to other aspects such as marital status, professional experience, and training qualifications (see Süß 2009). The differentiation of life courses and the associated expanded spectrum of different desires and needs of employees in different phases of life play a particularly important role in dealing with diversity.

4 19 AGING AND HETEROGENIC AGE WORKFORCE The age structure of the workforce follows the demographic change on the labor market and manifests itself not only in an increase in the average age, but also in a greater age heterogeneity of the workforce. However, not all sectors are equally affected by this, as evaluations based on the Linked Employer-Employee data set of the Institute for Employment Research (IAB) show (Fig. 1). The traces of the aging process of the workforce are particularly clear, in which every third person is now 55 years and older. The situation is different in the hospitality industry. Here, the average age of around 39 years is almost ten years below the average age in public administration. Not only the average age but also the age heterogeneity, i.e. the mix of different age groups, increased between 2007 and 2014 (Hammermann et al. 2017). In some companies, four generations work together. The current generational diversity of baby boomers, generation X, Y and Z needs a mutual understanding of different perspectives and lifestyles and age-appropriate HR management offers. This is the subject of research in numerous scientific studies, albeit with ambivalent results (for an overview see Williams / O Reilly 1998). The connections between diversity and success are essentially traced back to two effect theories (Fig. 2). Based on the information / decision making theory, it is assumed that heterogeneous teams come to more creative solutions than homogeneous groups due to different experiences and perspectives. The social categorization or similarity attraction theory, on the other hand, assumes that people tend to feel they belong to a certain group with which they are increasingly differentiated, with the increasing presence of previously underrepresented groups on the labor market. Gender, ethnic origin, age and disability are just four characteristics of diversity. public administration. While the average age across all sectors has increased by 1.6 years since 2007 to 43 years in 2014, the average age in public administration has increased by 2.1 years in the same period. More than DIVERSITY AND TEAM SUCCESS With an increasingly colorful workforce in mind, the question arises whether heterogeneous teams may even work more productively than homogeneous teams. share certain values ​​and experiences. This can lead to segregation and exclusion in heterogeneous groups and be associated with increased communication problems and potential for conflict. Whether heterogeneous teams are more successful or less successful

5 20 cherish than homogeneous teams depends on a number of accompanying factors and also on the composition of various diversity characteristics in the workforce. The key factor for success, however, is that all operational actors consciously deal with heterogeneous needs, attitudes and behaviors in a workforce. AGE STRUCTURE IN WORKFORCE Share of age groups in percent and average age in years in companies with five or more employees per year, 2 45.5 42.8 43,, 7 42.4 42.6 38.7 34.9 26.2 20, 1 22,, 8 23.5 15.2 Average age in the hospitality industry in years 55 years and older For personnel management in companies with increasingly heterogeneous workforces, there are expanded fields of action against this background in order to raise the innovation potential of teams with different levels of experience and uncover possible generation conflicts and to be able to address. The term diversity management encompasses all those measures that address, promote and integrate different workforce groups in a way that is appropriate to the target group. MANAGING AGE DIVERSITY Almost two thirds of companies in Germany pay attention to the different age-related needs of their workforce in their personnel policy and actively address them. This is indicated by a previously unpublished representative survey of managing directors and HR managers from companies in the private sector in 2019 (IW Personnel Panel 2019). But what constitutes an age-appropriate personnel policy and what should those responsible pay attention to? 59.8 64.9 70.9 68,, 8 68,, 7 5.3 8.9 9 9,, 2 11.9 12.5 19.1 Managing diversity means networking employees with their different strengths and the to bring different information, perspectives and experiences into the exchange. The prerequisite for this is to identify the different competencies and potentials, but also to recognize possible lines of conflict and to initiate preventive and curative measures. For an age- and age-appropriate personnel policy, several focal points can be identified that can be managed by non-profit organizations and public administration with mining / water / waste and food and consumer goods credit / insurance / insurance and company-related services / IT / communication with teaching and Health, social and other services Energy, financial, and social services Average trade / repair and transport / storage / news Product and capital goods and construction The data relate to an extrapolation of company averages. They can therefore deviate from information from personal surveys. Source: Hammermann et al. 2017; Data source: Linked-Employer-Employee data from the IAB HOW HETEROGENESS INFLUENCES TEAM SUCCESS Heterogeneous teams Source: IW Cologne based on Williams / O Reilly 1998, 89 Information / Decision Making Different information, experiences and perspectives can make a positive contribution to team success. Social Categorization / Similarity Attraction The social identity of people who h feel connected by similar characteristics can lead to group formation and thus also to delimitation from others. with forestry trade industry agriculture 25 to under 55 years of age under 25 years of age creativity problem-solving skills TEAM SUCCESS Communication problems conflict potential Fig. 1 Fig. 2

6 21 need more differentiated consideration in age-heterogeneous workforces. The transfer of knowledge can be promoted well through mixed-age teams and substitute systems. Young professionals can learn from their experienced colleagues, but older people can also benefit by gaining new insights and impulses. An interesting format in this context is reversed mentoring, i.e. mentoring programs in which experienced managers learn from the younger generation, for example, how to use social media. Employees who grew up with digital media often deal with it differently. Surveys show that employees who are younger than 30 years of age complain less about the flood of information at work than employees of other age groups (Grunau et al. 2018, 13). Flexible forms of work organization can help meet the various (temporal) needs of employees in different life situations. Employees in the age group between 30 and 49 years of age work most frequently in the home office, often in order to be able to better combine work and family (Grunau et al. 2018, 10). Employees who use working time accounts can distribute their working hours particularly flexibly over a defined period of time. In practice, however, these are mostly short-term accounts that must be settled within one year at the latest. Lifetime working time accounts, which allow employees to redistribute working time over the entire career, depending on the model, are less common due to administrative costs for companies and high requirements for insolvency protection. Health management measures can be the building blocks of an age-appropriate personnel policy by maintaining and promoting the employment and productivity of employees with a view to a longer employment horizon. However, offers such as sports programs or nutritional advice should only be seen as supplementary components of a health-promoting work structure. Work design and equipment at the workplace are particularly important for this. For health management in the narrower sense, in addition to sports offers to increase physical fitness and nutritional advice, there are a number of offers that strengthen the mental health of employees. Here, too, there may be age-specific differences in requirements. Older employees as well as employees under 30 show the lowest risk of depressive symptoms (Grunau et al. 2018, 16). In many places, formal further training offers concentrate more on those groups of employees who are just starting their professional careers or who are new to the company (Grunau et al. 2018, 9). It is essential to offer long-term employees perspectives for their own and professional development. With increasing life and work experience, however, other learning concepts are needed, for example by expanding opportunities for learning in the workplace. On the other hand, longer phases of learning weaning, in which repetitive and less complex tasks are carried out, reduce the employees' ability to adapt flexibly to new requirements and thus increase the risk of not being able to keep pace with changing requirements. So-called silver worker concepts are offers for (further) employment aimed at people after retirement age. Employees who work in the company beyond retirement age help transfer knowledge and create more time to train successors. However, it should be noted that employment and collective bargaining agreements often stand in the way of leaving the company after the statutory retirement age. A temporary employment of employees after reaching the standard retirement age is basically possible according to 41 sentence 3 SGB VI, in that the contracting parties postpone the termination date, possibly several times, by agreement during the employment relationship. The mentioned personnel policy priorities are examples where an age- and age-appropriate personnel policy can apply. A systematic examination of the offer with regard to different age groups makes sense, but in the application it should not be forgotten that employees find themselves in very different life situations regardless of their age and have very heterogeneous requirements that need individual, flexible personnel policy solutions (Blazek et al. 2011). SHAPING CHANGE WITH AGING WORKFORCE For the successful design of change processes, the ability and willingness of those affected to change are decisive. Change processes are always particularly difficult when a lot is at stake for those affected. This often affects those in the company hardest who have built a unique selling point based on their experience or who have otherwise established themselves well in their current professional position. Employees who are still relatively new to the company often have less to lose and their behavior is less shaped by routine than is the case with more experienced colleagues. However, professional beginners often lack the manual skills to react adequately to changes, as they do

7 22 has not yet been able to consolidate what has been learned in education in practice. Maintaining and promoting the ability and willingness to change over the entire course of an employment career is an important setting of the course in personnel policy for companies whose competitiveness depends on their flexibility and adaptability. are possible and necessary. Once measures have been introduced, they should be checked regularly to ensure that they meet requirements and that the objectives have been achieved. A life-phase-oriented perspective can help to systematically record the needs of the employees and to develop an age- and age-appropriate personnel policy. Federal Government (2019): More skilled workers for Germany, (Status:) Destatis (2018): Labor market at a glance. Germany and Europe, Wiesbaden Flüter-Hoffmann C. / Kurtenacker A. (2015): Personal Compass Inclusion A Guide to Employing People with Disabilities, Cologne Grunau, P. / Mackeben, J. / Wolter, S.(2019): Managing diversity means to network employees with their different strengths and to exchange the different information, perspectives and experiences. The prerequisite for this is to identify the different competencies and potentials, but also to recognize possible lines of conflict and to initiate preventive and curative measures. CONCLUSION Managing diversity in a company means targeting different groups of employees and weighing up different needs and interests. Workforces differentiate themselves with regard to various characteristics such as ethnic origin and age. For the company personnel policy, the regularly recurring inspection order is connected to the extent to which the existing offers meet the needs of different workforce groups and where more differentiated, flexible solutions to sharpen human resources work and to use the available time and human resources in the best possible way. Literature General Equal Treatment Act, (Status:) Blazek, Z. / Flüter-Hoffmann, C. / Kössler, S. / Ottmann, J. (2011): PersonalKompass Demografiemanagement mit Lebenskreisorientierung, Cologne Monitor Age Diversity in Companies. Current results of a company and employee survey, Federal Ministry of Labor and Social Affairs (ed.), Berlin Hammermann, A. / Niendorf, M. / Schmidt, J. (2017): Shaping the future with age-heterogeneous workforces, in: IW short reports, 73 Social Code (SGB) Book Six (VI) Statutory Pension Insurance (1990): 41 Old Age Pension and Protection against Dismissal, 41.html (Status:) Süß, S. (2009): The institutionalization of management concepts Diversity Management in Germany, Munich / Mering Williams, KY / O Reilly, CA (1998): Demography and diversity in organizations. A review of 40 years of research, in: Research in Organizational Behavior, 20,