According to our 2017 Canadian CEO Outlook, limiting brand risk in an age of transparency rose from fourth place in 2016 to tie for the top spot in 2017 with business digitization. Greater speed to market ranked as the second top priority, while three other priorities tied for third place, namely a stronger client focus, talent development, and a transition to data-driven decision making. A focus on diversity, at both the leadership and the employee level, lends itself to an inclusive culture and is the starting point for an Inclusion and Diversity strategy.
Our clients are more sensitive to risk than ever before as change accelerates. We have identified five key trends that are significantly increasing organizational risk in the absence of strong Inclusion and Diversity strategy and execution. They are:
- Class-action litigation is a fact in Canada, setting a precedent with settlements upwards of $100,000,000.1 In Ontario, Bill-132 expands and clarifies "workplace sexual harassment" and requires that all incidents be investigated and complaints of harassment be reported. This shifts the burden of proof towards the employer.2
- Regulatory and Institutional Investor scrutiny of diversity is becoming more prominent. Bill C-25 will embed "comply-or-explain" into the Canada Business Corporations Act for the very first time. Also, industry-leading global asset managers, as well as Canada's major institutional investors are actively calling for more gender diverse boards and executive teams.
- Workforce demographics are in flux, leading to a shift in workforce culture. In 2016, individuals aged 55 and over accounted for 36% of the working-age population, the highest proportion on record.3 Without diversity as a part of organizational culture, replacement of this workforce will not occur – leading to a significant brain drain and failure to innovate into the future.4 By 2020, it is estimated there will be a global talent shortage of 85 million high-skilled and medium-skilled workers.5
- Millennials are changing the way business is done. Empowered by technology and social media, they are exerting their leverage as employees and customers on organizations to create inclusive and diverse workplaces. By 2020, millenials will account for 50% of Canada's workforce.6 If organizations do not adapt, they risk costly turnover.
- The Visible Minority is becoming the majority. Approximately 55% of persons living in Census Metropolitan Areas in 2031 will be either immigrants or the Canadian-born children of immigrants. In Toronto and Vancouver, these proportions will reach 78% and 70%, respectively.7
An organization where Inclusion and Diversity is embedded in the corporate DNA is mitigating the risks associated with these trends. Equally important is that a diverse workforce and a culture of inclusion helps organizations execute on the top strategic priorities as identified by Canadian CEOs.