When done properly, the gains are potentially monumental

By Jordan Wapass, BA, MPP, CAFM, Principal Consultant, Cree8ive Advisory

Diversity and inclusion is a hot topic in Canada and around the world, and for good reason. But what are the benefits of integrating such values into a workplace, and how are some ways to do so? Several studies have shown that companies that enjoy higher diversity & inclusion (D&I) also perform better in several ways. In a Deloitte study,¹ for example, diversified workplaces were shown to enjoy a two point three times higher cashflow per employee over a three-year period. Likewise, a BCG study² reported that organizations with diverse management recorded revenue nineteen percentage points higher than organizations with below-average diversity leadership.

While they can confer great benefits to an organization, diversity and inclusion cannot be implemented through policy alone. It takes hard work and serious dedication. A company cannot just write an initiative and believe their work is done. Indeed, many companies purport to be inclusive and diverse, but that belief is part of the problem – in essence, you cannot fix what you do not see.

Diversity and inclusion must be integrated into the fabric of work culture if they are to be effective. Companies who fail to integrate such values in their company do their own shareholders a disservice.

Despite the popularity of diversity and inclusion, a lack of diversity and inclusion is not a secret to the Canadian public. Only forty percent of the Canadian workforce can agree that their environment is inclusive. Canadian corporations can and must do better.

What Are Diversity and Inclusion?

Diversity is the more well-known term of the two. Diversity can refer to differences in race, culture, gender, religion, politics, and sexual orientation. In the workplace, the term implies inclusion of people from these and other classifications.

Inclusion, meanwhile, is a more commonly disregarded term. Inclusion refers to the act or process of fostering an environment where those within diverse categories feel welcomed and valued. Inclusion is an important concept to remember, because there is a clear distinction between merely employing people and actually providing a diverse group with a comfortable work environment.

In Canada, many companies have become more diverse over the years as the general population has become more diverse. However, inclusion – or practices to ensure diverse populations are able to work in a safe and welcoming environment – requires more than just hiring practices. When there is a diverse environment but an absence of inclusion, a toxic culture can bubble up, where only certain sections of the staff feel comfortable doing their work.

Drilling into D&I: The Benefits to Corporations are Clear

Revenue increases, employee satisfaction, and common moral sense all point towards ensuring a workplace is diverse and inclusive. But D&I drives benefits in many categories. Below are a number of benefits conferred to those who choose to do the work of integrating D&I into their corporate culture.

1. A Radically Larger Talent Pool

If your hiring practices attract a homogeneous talent pool, then it is impossible to wind up with a diverse team. When you tweak your hiring practices to target a diverse multitude of applicants, your talent pool quickly grows.

According to Glassdoor,³ eighty-nine percent of Black and Asian, seventy-two percent of female, and seventy percent of Latino respondents said that corporation diversity influences their job applications greatly. More than fifty percent of White respondents also agreed that workforce diversity is essential.⁴

2. Improved Employee Engagement & Trust

If a corporation can increase its internal engagement, the benefits are potentially monumental. It is commonly known, for example, that when workers feel included, they tend to be more engaged. Above and beyond that, higher employee engagement is also reflected in team morale, profitability, and team retention. Employees in a highly inclusive work environment often have healthier physical and mental capabilities and suffer fewer health issues. Organizations that support D&l will have up to eighty-three percent of their millennial base substantially more engaged in their organization.⁴

An inclusive culture instills greater trust between leadership and employees, and lack of trust is a problem for many corporations. Only one out of every five HR leaders believes that their company leaders deeply trust their employees.⁵ By ensuring that leaders recognize the special flairs of their team members, there is more engagement between both parties.

3. Not a Coincidence: More Perspectives = More Innovation

Diversity of opinion and experience comes with a wider view of the playing field. A publication by Harvard Business Review⁶ revealed that diversity plays a significant role in outcomes related to innovation. According to the study, the most innovative enterprises also happened to be the most diverse ones.

The ability to properly decide whether or not to pursue an opportunity also improves with diverse opinions. In a recent study,⁷ six hundred entrepreneurial decisions arrived at by two hundred teams were assessed. Researchers found the diverse teams enjoyed a sixty percent improvement in their decision-making skills compared to more homogeneous groups. In fact, gender-, geography-, and age-diverse teams made better decisions than sole-category teams eighty-seven percent of the time.

It’s clear that diverse teams are more equipped to identify products and opportunities that will fulfil the needs of emerging consumer markets. In a world where innovation matters if you want to stay alive, heterogeneous expertise and problem-solving skills are not just nice to have – they’re imperative.

4. Better Employees, More Profits

According to McKinsey,⁸ EBIT experienced three and one-half percent growth for every ten percent increase in gender diversity. Corporations with considerably more ethnic and racial diversity also have a thirty-five percent higher chance of outperforming competitors.⁹

Harvard Business Review¹⁰ reported that diverse corporations post nineteen percent higher revenue per annum. Another report, this time by McKinsey,¹¹ supplemented this finding by revealing that for every ten percent increase in the ethnic and racial diversity of a company’s top management, there was a corresponding zero point eight increase in profits. Further, companies in the top quartile for ethnic, racial, and gender diversity have a twenty-five percent better chance of higher profitability than the expected national median for their according industries.¹¹ This is particularly applicable during crises. Great Places to Workevaluated some publicly traded organizations before, during, and after a recession, and, if you’ve grasped the tenor of this article, their findings won’t surprise you: highly diverse & inclusive companies posted a fourteen point four percent gain, while the S&P experienced a thirty-five point five percent fall in stock performance.¹²

Diversity and inclusion are critical to the workplace. A brief glance at the benefits noted above – which themselves are a short list – is sufficient, but there are much more data out there.

Implementing D&I can be difficult. Many companies consider it an “add-on” to their corporate strategy. To the contrary, D&I needs to live in the very DNA of every Canadian company.

Ways to Incorporate Diversity & Inclusion into the Canadian Workplace Culture

Implement the Truth and Reconciliation (TRC) Calls to Action

Apart from the legal imperative for corporations to engage diverse populations, including Indigenous groups, participating in TRC is also a moral good that is crucial to fostering diversity and inclusion. Furthermore, the benefits attached to D&I can flow from participating in TRC.

Here are five practical ways to apply the TRC CTA 92, which states:

i.   Commit to meaningful consultation, building respectful relationships, and obtaining the free, prior, and informed consent of Indigenous peoples before proceeding with economic development projects.

ii.  Ensure that Aboriginal peoples have equitable access to jobs, training, and education opportunities in the corporate sector, and that Aboriginal communities gain long-term sustainable benefits from economic development projects.

iii. Provide education for management and staff on the history of Aboriginal peoples, including the history and legacy of residential schools, the United Nations Declaration on the Rights of Indigenous Peoples, Treaties and Aboriginal rights, Indigenous law, and Aboriginal–Crown relations. This will require skills based training in intercultural competency, conflict resolution, human rights, and anti-racism.

1. Hire & train Indigenous students – offer internships, co-op placement opportunities, and scholarships through partnerships with universities and colleges.
2. Diversify the chain of supply – explore local vendors or review your procurement policy/practices to ensure successful proponents have Indigenous participation.
3. Train staff on the history of Aboriginal peoples, including the history and legacy of residential schools – work with your HR team to integrate this training into employee orientation and onboarding practices of your organization.
4. Celebrate dates that are special for Indigenous culture  – National Indigenous Peoples’ Day.
5. Meaningful engagement – when exploring opportunities on Indigenous land, work with the community to chart a path to prosperity. Meaningful consultation and engagement now means educating the community on the project and what their equity stake is.¹³

Employing an Inclusive Workplace Model

Corporations must consider inclusivity as an essential presence in their workplaces, supporting an environment that reflects different backgrounds and personalities.

A diversified company that scores low inclusivity marks is at the risk of alienating a segment of its workforce. Consider, for instance, the Indigenous employee who has to worry about whether to celebrate certain days related to their identity, or the Muslim worker unsure of whether to keep to his daily prayer routine while at work for fear of consequence. These employees might feel they have to conceal or mask important parts of who they are at work because the employer has not done enough to make the environment welcoming. Furthermore, they may also feel unnecessary pressure to be the educators in the workplace when, in reality, that simply is not their role. When lack of inclusivity is the problem, you can be certain a fall in motivation and engagement – as well as a rise in employee turnover – is likely to follow.

Take a Tally: How Diverse and Inclusive is Management?

Your executive team is the reflection of your ideologies as a company. The people who make up this team are a major signifier to the middle- and low-level workforce, as well as to partners, customers, and other stakeholders.

Is your management team homogeneous or heterogeneous? Is the diversity of the population represented?

According to a Boston Consulting Groupsurvey,¹⁴diversity is lacking in America’s boardrooms. If you think this might be the case in your management structure, then maybe the barriers to your boardroom are preventing a more heterogeneous representation. For the honest board member, this should incite deep reflection and a commitment to ensuring peoples of all groups are welcomed and valued.

Recognize and Celebrate Multiple Cultural Holidays and Practices

Look at the holidays in your company. Is there anything but the traditional Western holidays, or have you made space to celebrate and recognize other cultures’ important days as well? A policy that sees to the acknowledgement and honouring of multiple holidays will signal to potential multicultural employees that they are seen.

Another idea for inclusiveness is to demystify cultural practices by accommodating them.  You can start by installing a refrigerator to store Kosher food items, provided there is no stigma associated with this separation. As previously said, employees are more satisfied when recognized. This recognition translates into happier, harder working teams.

Final Words

Companies discussing D&I gain social capital by doing so, but their efforts in this regard must not be superficial. The changes, if changes are to come, must reach all the way to the board and beyond – to the company’s very mission and vision. 

Instructing hiring managers to welcome diverse employees is not enough. Corporate Canada must do its own research into the best ways to provide diverse employees with an inclusive work environment. This will spell a boon for the company, which realizes more profits, but also for the employees who feel that they are finally recognized and appreciated as part of something truly accepting and accommodating.

---

This article originally appeared in issue 28 of the Journal of Aboriginal Management, and has been edited to fit the blog format. Access the full issue at https://afoa.ca/about/jam/

Would you like to contribute an article to a future issue of JAM? Contact us today.