Workplace Culture

How Corporate Canada is Measuring up on Equity, Inclusion and Fairness

While many Canadian organizations express the belief that a diverse, inclusive workforce is a genuine asset, words must be compared to actions and hard data to provide an accurate snapshot of how Canada’s firms are truly changing.
— By Belinda Jones

The proliferation of diversity and inclusion (D&I) practices across Canada is being embraced as good for everyone. It is obviously good for the members of the historically underrepresented groups who are employed and valued because of it. There is the potential for it to be a mutually beneficial relationship, as well as generating clear good for the organizations which invest in D&I.

For these organizations, there are three types of benefits that come from investments and efforts around expanding their D&I. These are incidental, external and inherent. Each is examined in the paragraphs ahead.

The Incidental Benefits
Incidental benefits are those that do not cause a profound change in the organization. Instead, these rather reveal that the organization would have needed to become more diverse and inclusive one way or another. For example, as demographics change and the Canadian public becomes more diverse overall, many organizations will need to become more diverse in order to survive.

The idea of the “confounding variable” is relevant here. For the classic example of a confounding variable, ice cream sales strongly correlate with the violent crime rate, at least in some regions. Of course, eating ice cream does not cause violent crime; ice cream sales and the violent crime rate both correlate with temperature. In this example, the temperature is the confounding variable.

These things are not always so cut and dry. Sometimes a confounding variable accounts for a significant portion of a trend, but it is not the main cause. In the case of D&I changes correlating with time, there are a handful of partially confounding variables that can be grouped together as “demographic changes.”

For one, the past several years have seen higher than average immigration into Canada. Right now, about 23 per cent of the Canadian population are immigrants, often first generation, and these immigrants are also often members of visible minority groups. Recent immigrants are mostly concentrated in urban centres like Toronto and Vancouver, but they are spreading out with time. This means that most areas are seeing an increase in visible and cultural diversity as recent immigrants move across Canada. This partially explains the recent increases in diversity in hiring – as the local population becomes more diverse, local companies are hiring a more diverse mix of people.

At the same time, thanks to shifting demographics along the age curve, Canadian companies are becoming more limited in who from Canada’s traditional population is available to hire. As the baby boomers age and retire, there are fewer from this demographic generation available to fill Canada’s vacancies. Thus, an employer who might otherwise hire less diversely must shift their practices and hire a more diverse group of young people in a simple reflection of available talent.

In the case of D&I changes correlating with time, there are a handful of partially confounding variables that can be grouped together as “demographic changes.”
The same shifts can be seen in regard to gender diversity. Specifically, more and more women are gaining higher education and building careers. As Canada’s gender equality improves across business fields, it cannot be denied that some portion of the increase in business-leading women is down to “supply” rather than “demand.”

The External Benefits
External benefits are solutions to external pressures placed on the organization, like fulfilling government regulatory requirements. As with underlying changes in Canada’s demographics, this is another partial confounding variable in measuring Canada’s progress on diversity metrics.

As of January 2020, all publicly traded companies regulated by the Canada Business Corporations Act must disclose the per centage of their board members and senior management who are women, aboriginal people, people of colour/visible minorities, and people with disabilities. This requirement is enforced with a “comply or explain” model, meaning that affected companies have two options. They can adopt targets and policies regarding diversity in the highest levels of their leadership, which are to be disclosed alongside the actual per centages they have achieved. Or they can explain publicly why they chose not to.

It has been pointed out that the consequence for noncompliance is fairly minor, but it is at least embarrassing, and this law represents only one of many related laws in nested jurisdictions that require or promote workplace diversity. By increasing internal diversity and promoting equity – willingly or as a result of compliance mandate – Canada’s firms receive the external benefits that can accrue from appearing to adhere to the laws of the land.

The Inherent Benefits
Finally, there are the inherent benefits of D&I for Canadian firms. Inherent benefits are the various increases in efficiency and efficacy that come naturally from a diverse and inclusive culture, such as easier innovation and better talent acquisition. These are the boons that have really drawn Canadian organizations toward D&I practices, and that have served as the main driving force has been internal motivation.

When surveyed, Canadian companies reported that their “big three” reasons for investing in diversity and inclusion were to enhance employee engagement, to build the organization’s brand externally, and to enhance the organization’s ability to acquire new talent. Other highly ranked motivations were delivering on the organization's belief that it is “the right thing to do” and increasing innovation and agility. Legal compliance ranked ninth of 16 suggested reasons.

In other words, there are many factors that have led companies to invest in diversity and inclusion. Demographic changes played a role, as did government regulations. But, ultimately, the main cause is that Canadian companies simply realized that they are better when they are diverse and inclusive, and as a result marked improvements are being seen in D&I around the country.