DEI stands for Diversity, Equity, and Inclusion. It is also known as EDI, or DEIB when efforts are made to encourage belonging. From an employment perspective, DEI is intended to lower the systemic barriers that certain populations face with hiring and career advancement. It also creates a more empowered workforce with an emphasis on respect. The key takeaway is that it is not a trend. It is a powerful and effective business strategy. Yet in recent times, DEI has become a hot topic. Many Canadian companies are moving away from incorporating these initiatives into their organizational strategy.
Why are some businesses moving away from DEI?
Not so long ago, DEI initiatives were in full swing, particularly in the United States. For example, there was a 160% increase in DEI leadership roles in the U.S. between 2019-2022 according to Torys LLP. The recent shifts in the political landscape in the U.S. have led to several lawsuits and backlash against DEI initiatives. As a result, many U.S. companies have been reducing or eliminating DEI programs to secure business deals or avoid potential negative repercussions. This has led to shifts in how companies view DEI on an international scale. In Canada, CBC commented the trend can be seen in some companies in other ways, such as reducing budgets for DEI initiatives or downsizing DEI departments.
Is DEI different in Canada than in the U.S.?
As mentioned, the primary intention of DEI in the U.S. and Canada is to lower systemic barriers. What many don’t know is that DEI programs in the U.S. are based on guaranteed quotas. This is different than in Canada, where DEI programs focus on removing systemic barriers to promote equal opportunities, not on attaining set quotas. This can be summarized by Canadian Discrimination Lawyer, Soma Ray-Ellis:
“Our approaches to DEI have been defined by Canada’s multiculturalism policy dating back to the 1970s and enshrined in the Canadian Charter of Rights and Freedoms and the 1988 Canadian Multiculturalism Act, along with human rights legislation.”
How does DEI positively impact businesses?
With DEI becoming a politically charged term south of the border, divesting in these programs can be tempting. However, it is still a worthwhile investment for your company for three main reasons. DEI builds employee trust, generates better quality business solutions, and appeals more to clients and consumers.
And the numbers clearly reflect this. According to a LinkedIn survey, 60% of respondents believed that having a diverse sales team led to their success. A LinkedIn report also states that diverse companies are seen to “earn 2.5x higher cash flow per employee, are 35% more productive, and make better decisions 87% of the time.”
Fostering feelings of trust and engagement in Employees
If you felt recognized and valued by your company, would you be inclined to engage more? Most likely. Employee engagement, loyalty, and trust are primary goals behind DEI/DEIB programs and initiatives. A team member who trusts their employer often results in the motivation to perform at their best because they feel their contributions and needs matter to the company. From a leadership perspective, when employees in managerial roles are from diverse populations, this leads to employees trusting that there is less discrimination within the company’s hiring practices.
Generating better business strategies
Ever heard of the saying “Two heads are better than one”? Collaborating with people who have different perspectives and come from different walks of life can often generate more efficient, innovative, and cost-effective solutions. Conversely, a team of people who all have a similar way of thinking typically fall flat on producing fresh ideas.
DEI is becoming more appealing to the public
Potential employees, customers, and clients want to see themselves in your business before investing their energy, time, and money. According to the Canadian Marketing Association, customers and clients are choosing to support businesses that demonstrate DEI and diverse workforces because it is more representative of Canada’s diverse population. A company that has social proof that DEI strategies are valued and incorporated gives customers and candidates faith that they will be included and have their needs met.
The bottom line: DEI leads to better financial performance
A company that has an engaged workforce and customers or clients that are motivated to buy is a company that performs better financially. Not only do DEI-focused companies have the capacity to create innovate business solutions, but they also have the capacity to grow despite shifting economic climates. It is true that companies must always weigh the pros and cons of following business trends. However, putting short-term savings over the potential impact on engagement, innovation, and employee and consumer trust may ultimately damage your bottom line in the long run.
Looking for assistance? From customized training programs to HR audits, our team of experts at HR Performance & Results is ready to support your growing business. Contact us today!
References
4 Reasons to support Respectful Workplace Training in the face of DEI Backlash – Rubin Thomlinson