The Growth and Benefits of Cultural Diversity in the Workplace
Workplaces around the world are becoming more diverse as individuals immigrate and relocate.
Statistics Highlighting Diversity Around the Globe
A Pew survey of more than 30,000 people in 27 countries found that nearly 70% of respondents said their countries have become more diverse over the past 20 years. In 2017, there were 66.2 million expatriates around the world, according to the most recent data from market research firm Finaccord. Some 71.1% of these individuals were workers, and 14.1% were non-employed spouses and children. Students made up 8.5% of the pie, and 1% were associated with corporate and other transferees. Some of the countries with the largest expatriate populations included Saudi Arabia, the United Arab Emirates, and Germany.
Finaccord also projects an increase of expatriates between 2017 and 2021, from 66.2 million to 87.5 million. Additionally, the number of multinational enterprises worldwide is predicted to grow by 3.2%, reaching 13,900.
Furthermore, market research company Technavio reports that between 2020 and 2024, the global market for cross-cultural training services is expected to expand by $1.2 billion. Reasons for this growth include increased expatriate assignments, a growing emphasis on corporate cultural awareness, and new opportunities due to COVID-19.
Ethnic Composition of the American Workforce, 2018
White (non-Hispanic or Latinx) individuals make up 63% of the country’s workforce. Another 17% of the workforce is Hispanic or Latinx; this figure consists of 61% Mexican, 10% Central American, 8% Puerto Rican, 7% South American, 4% Cuban, and 9% other countries or regions of origin. Black (non-Hispanic or Latinx) individuals make up 11% of the American workforce. Another 6% of the workforce consists of Asian (non-Hispanic of Latinx) individuals; this figure breaks down to 24% Asian Indian, 22% Chinese, 15% Filipino, 11% Vietnamese, 7% Korean, 5% Japanese, and 16% other countries of other origin. These groups are followed by American Indian and Alaska Native (1%), Native Hawaiian and other Pacific Islander (0.5%), and two or more races (2%).
The Benefits of Culturally Diverse Teams
There are numerous advantages to embracing culturally diverse teams. One of these benefits includes greater innovation, as companies with diverse workforces are 1.8 times more likely to embrace change and are 1.7 times more likely to be market leaders. Another perk is improved employer reputation; a ZipRecruiter survey indicates 86% of job candidates consider workplace diversity important when seeking a new job.
Other key benefits include increased creativity, collaboration, productivity, and engagement. These ultimately can coalesce into increased profits, as companies in the top quartile for racial and ethnic diversity are 36% more likely to have financial returns that exceed their respective industry medians.
Complex Challenges in Cross-Cultural Leadership
Business leaders in multicultural environments must confront challenges and obstacles.
7 Challenges for Cross-Cultural Leadership
One of the key challenges facing cross-cultural leaders is working with differing communication styles and forms of expression utilized in different cultures, such as the use of open-ended questions. Another challenge involves understanding diversity in the individual frame of reference, such as geographic location, childhood experience, and educational opportunities. A third challenge involves adjusting to work styles dictated by cultures, like work schedules and acknowledging vacation expectations.
Business leaders must also learn how to navigate differences in motivational factors, such as considering the personal values of employees when creating team goals. Additionally, business leaders must be prepared to address prejudice and cultural stereotypes. Another challenge involves overcoming cultural and language barriers. Finally, business leaders must understand varying expectations toward respecting hierarchy and status.
How to Improve Your Cross-Cultural Leadership Skills
Every leader can take steps to identify their weaknesses in cross-cultural leadership and commit to improving their skills.
10 Tips for Cross-Cultural Leadership Success
An important step leaders can take to move toward effective cross-cultural leadership is to obtain an external assessment of their competence as a leader and communicator. It’s also important for leaders to be curious and open to adjusting their leadership style. Additionally, leaders must remain nonjudgmental when dealing with conflict. Another key tip for leaders is to have one-on-one conversations with employees to learn about their decision-making processes. It’s also important to minimize the language barrier by avoiding colloquialisms and slang.
Leaders should also work to accommodate an employee’s cultural customs. Additionally, leaders should avoid creating artificial divisions and focus on building commonality-driven relationships. It’s also crucial for leaders to understand that the smallest unit of any culture is the individual. Leaders should also constantly strive to respect differences. Finally, it’s important for leaders to foster a sense of community in the workplace.
Striving Toward Better Leadership
As leaders improve their cross-cultural leadership skills, they will undoubtedly make mistakes. Rather than becoming discouraged, leaders should seek to learn from every misstep or error and remain committed to growing personally and professionally.
Association for Talent Development, The Simple Key to Cross-Cultural Leadership
Business News Daily, How to Best Lead a Multicultural or International Team
Business Wire, Global Cross-Cultural Training Market 2020-2024 – Rise in Expatriate Assignments to Boost Market Growth – Technavio
ExpatNetwork, Number of Expat Workers Over One Million by 2021
Finaccord, Global Expatriates: Size, Segmentation and Forecast for the Worldwide Market
Forbes, The Benefits of Cultural Diversity in the Workplace
Harvard Business Review, Being the Boss in Brussels, Boston, and Beijing
Harvard Business Review, 3 Ways to Improve Your Cultural Fluency
Houston Chronicle, Diversity for Groups & Teams in the Workplace
Houston Chronicle, Effects of a Cultural Stereotype in the Workplace
Josh Bersin, Why Diversity and Inclusion Has Become a Business Priority
McKinsey & Company, Diversity Wins: How Inclusion Matters
Pew Research Center, A Changing World: Global Views on Diversity, Gender Equality, Family Life and the Importance of Religion
PR Newswire, Over 86% of Job Seekers Say Workplace Diversity Is an Important Factor When Looking for a Job
U.S. Bureau of Labor Statistics, Labor Force Characteristics by Race and Ethnicity, 2018