Deloitte Study Explores the “Diversity Advantage” of Canada’s Workforce

January 23, 2018

Also: what companies can do to encourage diversity not just in word, but also in deed.

Photo by Al x on Unsplash

Canada’s reputation for tolerance and a willingness to accept people from all over the world is growing. The country’s largest companies are looking to weather the country’s demographic challenges over the coming years, and also to become more socially responsible, and diversity is the buzzword on many lips in the Canadian corporate world. For years, organizations from Bay Street to B.C. have spoken about the importance of championing diversity in the workforce – but some high profile accounts have emerged challenging Canada’s corporate citizens to go farther.

Take, for example, Hadiya Roderique’s much-discussed November 2017 essay in the Globe and Mail, Black on Bay Street,” a personal profile of how difficult it can be for people of colour to fit into the still largely white, largely male-dominated world of Canadian corporate law. Canada is farther ahead than other countries in terms of championing diversity in the workplace. But in a country where – as Roderique mentions – over a third of Asian and black job candidates still “whiten” their names to hide their minority status when applying for jobs, can it really be said that  there isn’t a ton of work to be done to include more diverse employees in the workforce?

A new Deloitte report outlines how diversity offers companies a competitive advantage, and then goes on to challenge the assumption that Canada’s workforce diversity is taking great strides. The report authors ask a question that’s pretty provocative in this feel-good environment: what’s the difference between paying lip service to corporate diversity, and actually taking the proactive measures necessary to encourage a more diverse corporate workforce? 

But first, the benefits:

In 2016, Deloitte conducted research into 1,200 Canadian companies and found that the most diverse organizations enjoyed a number of advantages over their competitors. Diverse companies were:

  • More likely to report revenue growth,
  • More likely to report growth in hiring,
  • More likely to compete in national or international markets as opposed to local and regional markets,
  • More likely to value entrepreneurialism,
  • And more likely to feel as though they were able to deal with adversity in the business climate.

According to the report, we’re now in a situation where many companies have recognized these benefits of hiring employees from diverse backgrounds, but few have taken the steps necessary to actually change the picture on the ground, and reap the rewards. In their words, “after more than a year of research, we have found that actions taken by many firms to date in the areas of diversity and inclusion have delivered more optics than outcomes.”

Despite a lot of talk about diversity, only 11% of companies fit Deloitte’s metrics for being “courageous” in terms of inclusionary hiring and talent development – a category that Deloitte even took the step of excluding itself from. Today, only 35% of managerial positions in Canada are held by women. Only 4.5% of Director-level positions are held by visible minority candidates at the top 500 Canadian companies. Maybe the most telling takeaway from Deloitte’s survey is that most business leaders view Canada’s diversity as an economic advantage, but also recognized that progress has stalled when it comes to increasing diversity at their own companies.

This lack of progress is costing companies the advantages described above, but it’s also set to impact hiring: according to Deloitte’s survey, 47% of millennials consider diversity to be a key factor in choosing an employer, compared to only 33% of generation X employees and 37% of baby boomer employees. Which means as time goes on, companies who don’t encourage diversity in the workforce will find it harder to attract talent. 

It’s a tough situation: how do leaders within business – who don’t, statistically, tend to come from diverse backgrounds – learn how to not just hire employees from diverse backgrounds, but make sure that their practices are actively inclusive? Deloitte’s Canadian CEO recently did an interview with Macleans to try and address this issue – how a lack of diversity at the top of a business can become an entrenched issue, even if leaders have a willingness to change things.

The authors of the Deloitte study set up a distinction between diversity, which is the recognition and hiring of people of colour, differing abilities, and women into the workplace – and inclusion, which is a proactive attempt to foster opportunity for these diverse employees and give them opportunities to grow.

They go on to offer some tips for how companies can encourage not just greater diversity, but more inclusivity for their employees:

1. Organizations should set expectations for how leadership should behave when championing inclusiveness. They should include this diversity progress in leaders’ performance reviews and compensation.

2. Organizations should do what they can to avoid a “diversity backlash.” Companies should support traditionally underrepresented groups, avoid tokenism wherever possible, and embrace debate and challenges in the process to prevent internal “backlashes” to trying to increase diversity.

3. Organizations should empower millennial and Generation Z employees who tend to place a greater emphasis on the importance of diversity. They should let employees have a voice in their working style, understand employees’ aspirations, and constantly invite them to rethink how to champion inclusivity in the workplace.

4. Organizations should look at current practices from an inclusion standpoint, rather than waiting for future generations to solve them. According to Deloitte, companies should use new recruitment tools to avoid bias in the hiring process, hire based on “cultural contribution” rather than “cultural fit,” and treat inclusion as an ongoing process rather than a metric like sales targets.

5. Organizations should own inclusion both inside and outside the office. Leaders within companies should stand up for inclusion when dealing with suppliers, clients, and other people in their network, and shouldn’t be afraid to speak candidly about where their companies are still falling short.

Some might say that Deloitte’s report is just “talk” from a management consulting firm, but we think it’s worth commending them for trying to find ways to put inclusiveness into action – and for recognizing how they’ve fallen short in their own practices.

We’re very interested in this topic as a female-owned company who’s talked a lot about how our particular industry needs to do more to attract and promote women and other diverse candidates into leadership positions. 

Argentus is a recruitment company specializing in Supply Chain Management, so we’re on the front lines hiring in our niche. And right now, from our perspective, the single biggest thing that companies can do to help improve their diversity profile in Supply Chain and Procurement is to recognize overseas experience. More companies are seeing that overseas experience in Supply Chain is valuable: lots of people come to Canada with overseas experience at Fortune 100 companies, and many arrive with a useful contact base in overseas supplier networks. But too many companies are still failing to value overseas experience in Supply Chain Management and Procurement, insisting that only Canadian experience matters. We think that’s short sighted, and also standing in the way of the diversity and inclusiveness that Deloitte identifies as a key driver of competitive advantage.


We’ve written about how the Supply Chain industry in particular is a bit farther ahead than some other industries in terms of diversity. But we’re curious to hear about your experiences: are Supply Chain functions at your company as diverse as, say, marketing or sales? More diverse? Less diverse? What more can be done? Let us know in the comments! 

 

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