Diversity is good for business
Waterloo researcher links culturally inclusive teams to an increase in revenue and productivity
At a time when migration is at a record high, Bessma Momani, a professor at the University of Waterloo and the Balsillie School of International Affairs, examines the impact of immigration on the bottom lines of Canadian businesses.
Momani's research shows that Canada is well positioned to reap the benefits of immigration. It is something that she calls the diversity dividend and it has the power to make Canadian businesses more profitable.
Analysis of Statistics Canada's Workplace and Employee Survey data shows a strong, positive relationship between the presence of ethnocultural diversity in the workplace and increased productivity and revenue. Ethnocultural diversity refers to individuals born outside of Canada or those who speak a language other than French or English at home.
Across sectors, a one per cent increase in diversity corresponded to an average increase of 2.4 per cent in revenue and 0.5 per cent in productivity. Some industries realized a six per cent increase in revenue related to diversity.
This is good news for Canada since more than 20 per cent of Canadians are foreign-born. But understanding how diversity impacts business and how we can unlock the diversity dividend is key.
To further understand this impact, Momani conducted in-depth qualitative interviews with industry associations, labour unions, provincial and municipal representatives, as well as over 100 Canadian employers from coast to coast. Through these discussions, Momani identified four key business benefits of ethnocultural diversity directly impacting profits.
The benefits don't stop there. When you consider Canada's aging population, combined with its lower birth rate, Canada will need more workers. By 2037, immigration will account for all net growth in Canada's population and workforce.
"To remain internationally competitive, the integration of highly educated and highly skilled immigrants into the Canadian workforce will be essential," says Momani.
With such a clear business imperative for an internationally diverse Canadian workforce, Momani offers the following actions to help leaders embrace this simple shift.
Momani notes that all levels of government have work to do in recognizing foreign credentials, supporting programs to upgrade certifications and establishing national standards.
As a nation, diversity may enable Canada to gain competitive advantage in the world economy and strengthen our global connectivity. However, Canadian cultural fluency and diversity are - at present - underutilized national strengths. Strengths that distinguish Canada from its neighbours, and other countries struggling with inclusion and immigration issues.
By building an inclusive society that addresses barriers, fears and discriminatory practices, we will we unlock and maximize the diversity dividend.