Human Resources: Executive Summary: Minority Employment Trends

The U.S. population is evolving into a more racially and ethnically diverse nation than ever before. For the first time, the 2000 census found Hispanics are the largest ethnic minority in the U.S., outnumbering African Americans by nearly one million. Asians are the third largest minority, with 4% of the U.S. population.

Clearly, the demographics of the U.S. workforce are undergoing a major ethnic shift. Although by far the largest group of employed persons is non-Hispanic Whites, the labor force participation rates of Blacks and Asians are projected to increase by 2012, according to the U.S. Bureau of Labor Statistics, and employers need to meet the challenge of this growing diversity.

Currently, more than 16 million Hispanics are in the U.S. workforce, a number expected to rise 36.3% by 2010, based on the number of young Hispanics who will enter the workforce, according to the National Council of La Raza's annual report "State of Hispanic America 2004."

Among the problems with which U.S. Hispanics and Blacks must contend are higher unemployment rates. As of October 2004, the unemployment rate for Whites was 4.7%, compared with 6.7% for Hispanics and 10.7% for Blacks. Another concern is occupational distributions. Blacks and Hispanics hold just 6.6% and 4.8% of managerial jobs, respectively, well below their representation in the U.S. population. At the same time, they are disproportionately represented in service and laborer jobs. Occupational separation is particularly intense among top jobs. According to Hispanic Business, for example, Hispanics hold only 1.6% of nearly 6,000 board seats in the Fortune 500. Ethnic minority women are even less likely than their male counterparts to win top jobs.

Although discrimination seems to play a role in these trends, the skill levels of minority populations are also a major factor and are affected by the quality of education. Communities largely populated by people of color often lack adequate elementary and secondary education when compared with white communities. This makes many minorities less likely to be prepared for college, leaving them stuck in the low-wage job market.

Economist Mitra Toossi, of the Bureau of Labor Statistics, says increased immigration from regions other than Europe has caused the increase in diversity in the past 30 years, with many of these newcomers from high-fertility cultures. By 2050, Toossi projects, the composition of the U.S. labor force will be 53% non-Hispanic Whites, 24% Hispanics, 14% Blacks and 11% Asians.

What does this workforce in transition mean for HR? Cultivating a positive employer image within ethnic communities is an important recruitment tool, says Edwin Garcia, CEO of the National Society of Hispanic MBAs. By creating a diverse workforce that captures the ethnic input of minorities, companies gain an understanding of their needs and can respond to them.

Another concern in the increasingly multihued workforce is so-called color discrimination, which can create disparities between dark-skinned and light-skinned racial and ethnic minorities. And sometimes workplace discrimination among minority group members is exacerbated by differences in culture and nationality. The term "Hispanics," for example, is really an umbrella term for a wide variety of cultural backgrounds. HR must understand these differences in order to establish an effective cultural bridge for hiring these workers.

Management strategies encouraging cultural education and understanding can nurture an environment that values diversity. "We're seeing a second generation of understanding about where harassment and discrimination are going," says Lynn Lieber of Workplace Answers in San Francisco. Creating a hospitable workplace where such groups feel comfortable is essential in maintaining a high-value employment brand, especially since many minorities seek jobs through networking with friends and family rather than through traditional ways of recruiting. HR departments that successfully manage diversity will enhance the company's competitive edge.

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