Diversity is good for business

Learn more about Bessma Momani's latest work at the next Waterloo Innovation Summit, Tuesday, September 28.

Bessma Momai
Bessma Momani
> Faculty of Arts
> Professor of Political Science
> Interim Associate Vice-President of Interdisciplinary Research

At a time when migration is at a record high, Bessma Momani, a professor at the University of Waterloo and interim Associate Vice-President of Interdisciplinary Research, 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.

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The diversity dividend

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.

The business perspective

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.

Talent: Inclusive hiring practices enable organizations to tap into the widest possible pool of candidates and increase workforce quality.
Creativity and Innovation: Different experiences, practices and education help generate more and different ideas. Plus, diverse teams create more accurate, better quality work.
Product Development: Perspective is everything. Diverse teams help to uncover un-met needs in the marketplace and expand to new demographics or markets.
Market Access: Diverse teams bring new, "cultural fluency," to businesses, act as gateways to conducting business overseas and enable access to global market networks.

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.

A way forward

With such a clear business imperative for an internationally diverse Canadian workforce, Momani offers the following actions to help leaders embrace this simple shift.

ACTIONS FOR INDUSTRY

Recognize and reward international experience to drive innovation and build bridges that will take business beyond North America.
Make international experience a factor to be assessed in hiring and promotion.
Working with the education sector, design and promote recognized international study-work opportunities, and leverage youth mobility programs to create international internships for young Canadians.

ACTIONS FOR GOVERNMENT

Work with bilateral partners to create an academic mobility program modelled on the EU Erasmus program that will give Canadians international experience and increase the number of foreign students coming to Canada.
Continue to increase immigration in order to maintain and grow the economy.
Use the Canada-hosted Group of Seven or Group of Twenty summits to champion initiatives such as international third-party certification of indicators and benchmarks, and to showcase the diversity dividend.

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.