Kitchener-Waterloo

Diversity good for Canadian businesses, says new CIGI report

summary

Report found a 1 per cent increase in diversity lead to an average 2.4 per cent increase in revenue

Diversity is good for the bottom line, says a new CIGI report that looked at Canadian workplaces and found a strong relationship between increased diversity and increased revenue. (Getty Images)

Diversity is good for the bottom line of Canadian companies, according to a new report from the Centre for International Governance Innovation in Waterloo, Ont.

For every 1 per cent increase in ethnocultural diversity, on average companies saw a 2.4 per cent bump in revenue and a 0.5 per cent increase in productivity, said Bessma Momani and Jillian Stirk, the authors of Diversity Dividend: Canada's Global Advantage, published on Monday.

"We really wanted to sort of go beyond the normative argument, and there is a lot of positive rhetoric about that it's a good thing for society, which we agree with 100 per cent, but we wanted to see if there was a business case," said Momani in an interview with CBC Kitchener-Waterloo's The Morning Edition host Craig Norris on Tuesday. 

They found the strongest relationship between diversity and performance in cultural industries, communications, business and legal services. 

The report doesn't try to sugarcoat this, there is a lot of work to be done. There's a great deal of discrimination in this country.- Bessma Momani , co-author of Diversity Dividend

Methodology

The pair spoke to about 100 business leaders across the country,in a series of roundtables in seven different cities.

They did statistical data modelling based on the workplace employee survey by Statistics Canada, which covers more than 7,900 workplaces in 14 sectors, from 1991 to 2005.

"Simply, you just get a conversation going amongst people who are different. You don't think the same, you have very different views on things, we know that sometimes it means access to markets abroad. If you have somebody in your company who is fluent in Mandarin, you're more likely to go out and seek Chinese markets," said Momani, when asked why she thought increased diversity led to revenue increases.

"We know that if you have an ethnoculturally diverse workforce, that maybe marketing to a certain ethnic group at this certain time of year because it's a celebratory time for this community, could be a huge bump in revenue," she said.

Discrimination still exists

"We started this project about two years ago and there's been a great deal written about diversity and its benefits," Momani added.

"But that all said, and I think it's important, because the report doesn't try to sugarcoat this: there is a lot of work to be done. There's a great deal of discrimination in this country, people who are a visible minority, certain ethnic sounding names, I mean there's a lot of discrimination going on in hiring practices, and we recommend a lot of things that could remove that."

Among the recommendations for fixing hiring practices, the pair suggest using blind recruitment, getting rid of referral programs and using technology to find the best candidates for a position.

They also suggest eliminating the need for Canadian experience, which makes it easier for highly-skilled immigrants to get into the workforce.