Beyond quotas: The business case for employment equity

The demographic changes that have taken place in the last 30 years in Canada have changed both the labour and consumer markets.

While HR professionals can advocate for diversity programs on the basis of labour shortages or on ethical and moral grounds, the boost a diverse workforce offers for selling products and services has real bottom-line impact.

The shift in workforce demographics has resulted in an increase of women, Aboriginal Peoples, persons with disabilities and racial minority members in the labour pool. It is estimated that approximately 85 per cent of all new entrants to the labour market come from these four groups.

Figures from the 1996 census show that of the 15.5 million working age persons, 46 per cent were women, two per cent were Aboriginal Peoples, six per cent were persons with disabilities and 10 per cent were racial minority members. This provides a golden opportunity for organizations to increase diversity in their workforce.

Consumer market
While changes are taking place in the labour market, inevitably there is a parallel change occurring in the consumer market. The emerging diverse workers are also consumers. There are approximately 15 million women in Canada representing 51 per cent of the population, and they are taking more than their share of the consumer market.

The federal government projects that the Aboriginal population, currently at more than 1.2 million, will grow dramatically in the next 15 years. Aboriginal Peoples control 20 per cent of Canada’s landmass. Their rising economic status has ignited an interest from the banking sector to become business partners with native bands.

There are more than 4 million persons with disabilities in Canada. And due to the aging population, there will be a great increase in persons with disabilities. Scotiabank has estimated that the purchasing power of this group is $120 billion. Some companies have established consumer services and products to capture this market. For example, Hertz Corporation has been providing services to help travelers with disabilities.

There were more than three million racial minority members in Canada in 1996, representing 10 per cent of the Canadian population. By 2016 it will be up to 20 per cent. The Canadian Advertising Foundation projected that racial minority members will represent more than $300 billion of combined purchasing power by the year 2001. Compusearch has determined that, in addition to age and education, ethnicity is a key factor in consumption pattern. Many companies such as Air Canada, Sprint Canada and the Bank of Montreal have been marketing extensively to racial minority members and have customized products and services for them.

Here is an opportunity
The rising number of diverse consumers and their consumption power presents a strong business case for employment equity. More and more organizations are interested in tapping into this market. They do it through special marketing and product design. In this context, employment equity professionals are in an advantageous position in marketing employment equity within their own organizations. They can show that employment equity has a business case.

One objective of employment equity is to increase the representation of designated groups in an organization. Such an increase is beneficial to these organizations because diverse groups can bring in knowledge, skills and experience that can help their organizations gain a larger market share.

To make this happen, employment equity has to be linked with marketing, customer relations, product design and service delivery. The marketing or customer relations departments have to see some benefits in increasing the number of diverse groups.

The benefits are that having women, Aboriginal Peoples, persons with disabilities and visible minorities on staff will help various departments to understand the lifestyles, consumption needs and wants, purchasing preferences, media usage habits and brand loyalty of these groups.

For many years, real estate companies have been successfully diversifying their agents and consequently have built up a base of diverse customers. Large financial, mutual funds and insurance companies have worked hard to gain insights into new consumers and have diversified their workforces. Automobile companies, and increasingly, food and beverage companies, have found great value in recruiting and retaining more diverse group members and marketing to them. These are good examples of how industries have recognized the value of a diversified workforce.

In order to make employment equity work and become valuable in the eyes of senior and line management, it cannot be viewed as a numbers game, a quota system, an “airy fairy” training exercise. It has to be treated as an integral part of the business of the organization, adding value to product design, marketing, service delivery and customer service.

Bobby Siu is president of Infoworth Consulting Inc., a Toronto-based firm that specializes in equity/diversity management, marketing and international business. He may be contacted at (416) 967-5292 or [email protected]

Spending power
Canadian woman are taking over more of the consumer market. According to the Royal Bank:

•women control 80 per cent of the consumer dollar spent in North America;

•women purchase 53 per cent of all stocks sold in North America;

•four out of five businesses started by young Canadians are started by women;

•women buy 50 per cent of sports equipment, 51 per cent of all PCs and pay for 70 per cent of all home improvements;

•women make 89 per cent of choices of bank accounts; and

•women buy 50 per cent of the cars sold in Canada and influence 85 per cent of the purchasing decisions.

Latest stories