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Excerpt--HR and the New Hispanic Workforce

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2007, 283 pages, Hardcover

ISBN: 978-089106189-2

SHRMStore Item #: 61.15003

Order from the SHRMStore or call (800) 444-5006



A demographic sea change is moving across the American workplace, as unprecedented in scope as it was unforeseen. As recently as 1990, the U.S. Census believed that Hispanics would not overtake African Americans to become the nation's largest minority until 2020. It was an arresting development, therefore, when, in 2002, the U.S. Census reported that there were more Hispanics than blacks, and that the United States was the fastest-growing Spanish-speaking nation in the world. "Hispanics have edged past blacks as the nation's largest minority group, new figures released today by the Census Bureau showed. The Hispanic population in the United States is now roughly 37 million, while blacks number about 36.2 million," Lynette Clemetson declared in the New York Times in January 2003, documenting the federal government's official acceptance of the historic demographic developments in the United States in the first decade of the twenty-first century.

Every year since then the Census Bureau, along with other federal agencies, has continued to document the structural changes in the American population, changes that herald the increasing proportion of Hispanics-and thus of Hispanic employees-in ways that, a mere generation ago, were unimaginable. Consider a few tantalizing facts:

  • On average, Hispanics are almost a decade younger than the general population.
  • More than a third of Hispanics are less than eighteen years old.
  • Fertility rates of Hispanics are higher than the natural replacement level.
  • More than 34 million Mexicans have a legal claim of some kind to immigrate to the United States.
  • Hispanics who attain graduate degrees earn more than 15 percent more than their non- Hispanic counterparts.
These changes have not unfolded without comment. "It is a turning point in the nation's history, a symbolic benchmark of some significance," Roberto Suro, director of the Pew Hispanic Center, said of the emergence of Hispanics as the largest minority, displacing African Americans from their historic position. "If you consider how much of this nation's history is wrapped up in the interplay between black and white, this serves as an official announcement that we as Americans cannot think of race in that way any more."2 Other voices have been raised in alarm. "The persistent inflow of Hispanic immigrants threatens to divide the United States into two peoples, two cultures, and two languages. Unlike past immigrant groups, Mexicans and other Hispanics have not assimilated into mainstream U.S. culture, forming instead their own political and linguistic enclaves—from Los Angeles to Miami—and rejecting the Anglo-Protestant values that built the American dream," Samuel Huntington of Harvard University wrote in the pages of Foreign Affairs.3 That sweeping demographic changes are transforming America's workforce is undeniable. Consider two facts:
  • Hispanics in 2005 were 14 percent of the nation's population-but 22 percent of workers.
  • If things continue on their present course, Hispanics in 2050 will represent 32 percent of the nation's population, but 55 percent of workers.
These demographic changes, with Hispanics fast expanding throughout the American workforce, come at a time when there is an emerging literature documenting how human resource management (HRM) has a direct impact on an organization's performance. Empirical economic analysis for more than a decade has continued to demonstrate that companies with HRM strategies that involve paying higher wages relative to their competitors reap significant benefits in reduced absenteeism and employee turnover and increased productivity.

One of the most compelling analyses about the strategic role HRM plays in the success of an organization was conducted by James Baron, Michael Hannan, and M. Diane Burton, who examined how the philosophical approaches of start-up founders in Silicon Valley affected the success of their enterprises.6 In firms where the founders espoused and embraced a commitment-based employment model, which was defined, in part, by explicit commitment by management to the employees and endeavored to complement the firm's and employees' cultural worldview, productivity was higher and HRM conflicts less common.7 The compelling lesson of this large-scale study demonstrates that an articulated, proactive use of HRM as a management tool is a successful strategy for managing employee relations, streamlining problem resolution, and nurturing a culture of mutual commitment and reciprocal loyalty.

In essence, when general management clearly articulated and defined the role of HRM, making human resource (HR) professionals an integral part of the organization's strategy for success, both profit and shareholder value were enhanced. Furthermore, a recognition that HRM consists of economic, social, and cultural components is an integral aspect of creating the proper framework for the successful administration of an organization's "human capital." This important distinction has gained currency only recently. "Human assets are hard to evaluate quantitatively, so they don't show up on the balance sheet," James Baron and David Kreps write. "But whether or not the bean counters can assign dollar values to them, assets they are, and general managers must think of human resources as a form of capital."

In this present decade, building on the foundation of a growing body of empirical studies and data, HR managers have matured as partners in the strategic management of their organizations, and HRM has become more fine-tuned as a science that employs an increasingly skilled corps of professionals. To a significant degree the newfound importance of HRM arises from management's belief that HRM has become an integrated structural system, not a random collection of disparate functions centered on payroll and labor law compliance functions. This approach, often referred to as complementarities, has required a seismic shift in HRM, which stands in contrast to the way HR professionals have historically seen themselves.

"There are many reasons the HR department has been slow to change, not the least of which is the widespread belief that human resources is simply a fact of organizational life that has little or no effect on business performance," argues Edward Lawler of the University of Southern California.

The time has come, however, to see beyond this limited view. Technology is driving a revolution in the way HR administration can be managed, giving HR executives new data-collection and analysis tools with which they can more easily demonstrate the importance of effective human capital management-to strategy and the bottom line. Furthermore, large administrative cost savings can also be realized by outsourcing activities that don't contribute to shareholder value. Companies that hone HR's contributions in both the human capital strategy and administrative realms can build a significant competitive advantage.

It is in this pursuit of competitive advantage that this book explores the Hispanization of the nation's workforce and the emergence of HRM as a strategic management tool.

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