In times of economic uncertainty, many organizations may be inclined to cut costs and delay investments in areas that are perceived as non-essential, such as diversity, equity, and inclusion (DEI). However, investing in DEI during an economic downturn can provide several benefits to businesses in Canada. In this article, we’ll explore why investing in DEI during an economic downturn is critical and highlight the benefits it can bring to Canadian organizations.
Benefits
Increased Innovation and Creativity
A diverse workforce brings different experiences, perspectives, and backgrounds to the table, resulting in increased creativity and innovation. This is especially important during an economic downturn when businesses must find innovative ways to remain competitive. A study by McKinsey & Company found that companies with diverse workforces are 35% more likely to have financial returns above their national industry medians.
In Canada, investing in DEI during an economic downturn can help businesses tap into new markets and understand the needs of diverse customer groups. As Canada becomes increasingly diverse, organizations that invest in DEI will be better equipped to serve their customers and adapt to changing market conditions.
Enhanced Reputation
Companies that prioritize DEI are more attractive to customers, investors, and potential employees. During an economic downturn, maintaining a strong reputation and brand image is critical. A study by Glassdoor found that companies with strong DEI ratings are more likely to attract top talent. A report by Deloitte found that companies with strong diversity and inclusion policies were 80% more likely to attract new talent.
Moreover, companies that prioritize DEI during an economic downturn are also more likely to be seen as socially responsible and ethical, which can enhance their reputation and brand value. This can lead to increased customer loyalty and better relationships with stakeholders.
Improved Employee Morale & Retention
Employees may feel uncertain and anxious about their job security during an economic downturn. Investing in DEI can help to create a more inclusive and supportive workplace culture, which can improve employee morale and retention. A study by Deloitte found that companies with inclusive cultures are six times more likely to be innovative and agile and eight times more likely to achieve better business outcomes.
In Canada, companies investing in DEI during an economic downturn will be better equipped to attract and retain diverse employees. This can help them build a strong and loyal workforce, reduce turnover costs, and improve productivity and profitability.
Statistics
Increased Innovation and Creativity
In a survey of Canadian executives, 77% said that diversity and inclusion were important for driving innovation and creativity in their organizations.
A report by the Conference Board of Canada found that companies with diverse workforces had higher levels of innovation and creativity and were better able to identify new business opportunities.
Enhanced Reputation
A survey by the Canadian Centre for Diversity and Inclusion found that 81% of Canadians believe that companies should take a leadership role in promoting diversity and inclusion.
A study by Catalyst found that companies with diverse boards of directors were more likely to have better financial performance, higher levels of employee engagement, and stronger relationships
Improved Employee Morale and Retention
A survey by the Canadian Centre for Diversity and Inclusion found that 64% of Canadian employees said that they were more likely to stay with an employer that valued diversity and inclusion.
A report by the Diversity Institute found that companies with diverse workforces had higher levels of employee engagement and retention and lower levels of absenteeism.
Conclusion
Investing in workplace diversity, equity, and inclusion during an economic downturn can provide several benefits to Canadian organizations. By prioritizing DEI, companies can drive innovation and creativity, enhance their reputation, improve employee morale and retention, and ensure compliance with regulations.
In a challenging economic environment, investing in DEI may seem like a luxury that many companies cannot afford. However, the benefits of investing in DEI far outweigh the costs. Companies that prioritize DEI are better equipped to navigate the challenges and opportunities of an increasingly diverse workforce and are more likely to emerge from an economic downturn stronger and more resilient.
Want to improve your bottom line by investing in workplace diversity, equity, and inclusion? Let’s work together to build a more diverse, inclusive, and resilient Canadian workforce.
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References
McKinsey & Company. (2018). Delivering through diversity. https://www.mckinsey.com/business-functions/organization/our-insights/delivering-through-diversity
Glassdoor. (2019). Diversity & inclusion ratings: What they are and why they matter. https://www.glassdoor.com/employers/blog/diversity-inclusion-ratings-what-they-are-and-why-they-matter/
Deloitte. (2017). The diversity and inclusion revolution: Eight powerful truths. https://www2.deloitte.com/content/dam/Deloitte/us/Documents/about-deloitte/us-corporate-citizenship-diversity-and-inclusion-2017.pdf
Conference Board of Canada. (2018). How diversity and inclusion drive innovation. https://www.conferenceboard.ca/e-library/abstract.aspx?did=9780
Canadian Centre for Diversity and Inclusion. (2018). The diversity dividend: Canada’s global advantage. https://ccdi.ca/wp-content/uploads/2018/05/Diversity-Dividend-FINAL-REPORT.pdf
Catalyst. (2011). The bottom line: Corporate performance and women’s representation on boards. https://www.catalyst.org/research/bottom-line-corporate-performance-and-womens-representation-on-boards/
Diversity Institute. (2019). The business case for diversity, equity and inclusion. https://diversityinstitute.ca/wp-content/uploads/2019/11/Diversity-Institute-The-Business-Case-for-DEI-November-2019.pdf
Government of Canada. (2021). Employment equity. https://www.canada.ca/en/employment-social-development/services/labour-standards/reports/employment-equity.html
Government of Canada. (2021). Multiculturalism. https://www.canada.ca/en/canadian-heritage/services/multiculturalism.html
Government of Ontario. (2021). Ontario Human Rights Code. https://www.ontario.ca/laws/statute/90h19
This blog was originally published by Diversio EDU (formerly CCDI Consulting) in April 2023.
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