Where’s the cultural diversity? Tracking status amongst Australian business leaders

by 28 May 2012

For many years, business, government and the community have rightly focused on addressing the underutilisation of women in the Australian employment market, especially in positions of leadership. Up until now, the degree of cultural diversity at the leadership level had not been explored so there has been no way of knowing if we are making the most of culturally diverse talent.

It’s timely to note that our political and business leaders are increasingly mindful of the relevance of cultural diversity for Australian organisations, particularly as it relates to Asian regions. We are witnessing a fundamental shift in global economic and strategic weight (back) from west to east. Asia’s global significance is top of mind for the federal government, as evidenced by its commissioning of a White Paper on Australia in the Asian Century, which will lay out the economic, political and social opportunities that reside in the booming Asian region, encompassing China, India, the key ASEAN countries as well as Japan and the Republic of Korea. These markets represent significant business opportunities, particularly in an increasingly global service-oriented economy.

The time was therefore right for Diversity Council Australia to conduct a survey of over 2,000 executives and their direct reports measuring just how culturally diverse the executive ranks and immediate pipeline are in the ‘Big 4’ accounting and business services firms (i.e. Deloitte, Ernst & Young, KPMG, PwC) and ANZ in Australia. This has not been done in Australia before so we are breaking new ground.

And what we found was encouraging – there is a breadth and depth of cultural and linguistic diversity at the most senior levels, at least to the same or greater degree, depending on the measure, than the general population.

Across the board, senior executives and leadership ‘pipeline’ executives held citizenship of 65 different countries and represented 107 different ancestries. Fifty-seven different languages were spoken across survey participant homes. The percentage of senior executives and pipeline executives who were born overseas was higher than that in the Australian community (41% versus 27%), and they variously came from 77 different countries.

Also welcome news was the finding that the leadership pipeline was somewhat more diverse than the senior executive workforce, in relation to country of birth, parents’ country of birth and main languages spoken at home.

Recent research has found people with multiple cultural identities and those with overseas immersion experiences display more creativity, are better problem solvers and more likely to create new businesses and products. If our respondents are anything to go by, Australian organisations are well positioned when it comes to intercultural capability (as measured by global experience, multilingual ability and multiple cultural identities). Forty per cent of participants were bi or multilingual, approximately 30% possessed a bicultural or multicultural identity and just over 20% had a high degree of global experience. Senior executives and pipeline executives were proficient in 80 different languages. Over 60% had lived and worked in countries besides Australia and over 50% regularly interacted with clients and colleagues overseas in their current role.

But, not surprisingly, we also found that there is work to be done to capitalise more on talent from a broader range of countries of birth, ancestries and cultural identities and who speak a broader range of languages.

The majority of participants (86%) were born in either Australia or main English-speaking countries, these being Canada, New Zealand, the Republic of Ireland, South Africa, the UK and US.

While broad cultural groups were represented at levels roughly equivalent to that found in the community, often only a limited number of countries were represented in each group (e.g. 94% of overseas participants born in Southern and Central Asia were from either India or Sri Lanka).

Approximately three quarters of the leadership pipeline were Australian-born or born in North-West Europe (e.g. the U.K., France, Germany, Sweden). In the rest of the leadership pipeline the only cultural groups that had somewhat promising levels of representation were South-East Asia (e.g. Indonesia, Malaysia, Philippines, Singapore, Thailand) and Southern and Central Asia (e.g. Afghanistan, Bangladesh, India, Pakistan, Sri Lanka).

If Australian organisations are to leverage fully the business opportunities of culturally diverse markets, business as usual is simply not enough. As DCA outlined in its submission to the government’s Issues Paper on Australia in the Asian Century, intercultural capability is key. Employers will need to genuinely value cultural diversity and the inter-cultural capabilities this can bring, and source people from what we already have in our culturally diverse ranks locally, as well as in regional and global settings.

Doing so will position these organisations for commercial success, enabling them to meet critical talent shortages in an increasingly tight labour market, identify and enter new local and international markets, and better understand and service the needs of an increasingly culturally diverse client base.

About the author 

Nareen Young is Chief Executive Officer, Diversity Council Australia. For more detail on the results of DCA’s research, sponsored by Deloitte, ANZ, King & Wood Mallesons and Goldman Sachs, visit: here

Diversity Council Australia Limited (DCA) is the independent, not-for-profit workplace diversity advisor to business in Australia. For more information, visit www.dca.org.au.

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