In the age of declining stock values, layoffs, corporate collapses and overall economic uncertainty, it is not surprising that some companies are freezing or reducing budgets. Restructuring and downsizing is inevitable in a recession; companies are cutting back and spending is vigilantly monitored. However, even in these volatile times, investing in organizational diversity initiatives and cross-cultural awareness must remain a priority if your company is to maintain its competitive advantage.

Economic changes in Canada and the United States doesn’t mean that companies become isolated from the rest of the world, or that employee relations are thrown out the window. Nor does it mean that companies stop hiring altogether. As long as the market requires organizations to engage with other businesses domestically and internationally, we should all have a keen interest in retaining a talented and diverse workforce. With changing demographics, it is also important to have employees that are representative of your clientele. There is no better time to invest in diversity initiatives than this present moment! Now more than ever is the time to think of “repackaging yourselves” or your product to attract new business.

Here are the top FIVE reasons why diversity initiatives are still essential in a slow economy.

1. The pending labour shortage.¹ Even though there are some major changes in the Canadian economy, savvy organizations are keeping in mind that Canada is also experiencing a labour shortage. Among the dismal news of layoffs and salary cuts, employers must remember some key statistics.

   Although, no one can predict when we will see the end of the current economic time, most agree that it will not last more than a couple of years. At that time, we will still be experiencing a labour shortage. For example, according to a recent report from the Conference Board of Canada, by 2014 labour demand will exceed labour supply. If companies want to separate themselves from the pack and thrive now and in the future, it is important to tap into under-represented and under-utilized groups. These include immigrants, internationally trained professionals, Aboriginal people, women, the (dis)abled, mature workers, etc.

   Unlike any economic downturn we have seen before, we cannot afford to lose our talent with a labour shortage; when brighter economic times appear, your competitor may hold all the innovative diverse talent. Even with this gloomy economy, the question that every organization should ask ”what is being done to prepare to recruit and retain our workers, of all backgrounds, that we desperately need?”.

   Rather than attempting to ride out the economic recession and wait for a financial boost to invest in employee diversity initiatives, progressive companies are jumping on board to ensure that they are well equipped for this new pool of employees.

2. More qualified and diverse employees are now available!² While some companies are engaging in employee layoffs, others are hiring some new recruits. According to Scott Kariya in “The How-to’s of Hiring”, states that the upside of hiring in an economic slow down is that there is a bigger pool of higher quality applicants to choose from. He writes that firms view this as a time to scout and recruit new talent. In fact, even though companies can be more selective in a downturn, Kariya writes that the basic rules of recruiting still apply. Organizations are still on the lookout for qualified candidates.

   Even with a slow economy, immigration levels in Canada are steadily on the rise. According to Statistics Canada projections, Canada would have between 6,313,000 and 8,530,000 visible minority persons in 2017. Statistics Canada show that the number of immigrants with professional qualifications will be increasing steadily over the years. We should not forget the increasing number of employees from previously untapped sources. This means that as you continue to recruit the best and the brightest candidates, your organization will become more professionally and culturally diverse.

   With this new, diverse and qualified pool of applicants, now is the perfect time for your HR managers to be aware of the principles of inclusive recruiting and inclusive interviewing in the first steps towards taking advantage of the diverse resources that are available. Strong diversity and workplace inclusive programs will also help retain your new recruits.

3. A recession forces some companies to become more innovative. According to BusinessWeek, one of the mistakes that most companies make is not continuing to invest in innovative ideas. Economic experts advise most organizations to use periods of economic recession to develop much needed innovation. Scott D. Anthony and Leslie Feinzaig in Forbes Magazine³ write that curtailing innovation efforts in tough times is a huge mistake since companies should always strive to maintain their competitive advantage. And what better way to foster innovation and creativity than by relying on the expertise and opinions of employees with a variety of experiences. This is where the importance of having a diverse workforce plays a key role! With new, exciting and innovative ideas coming from your team, your organization will be better equipped to weather this economic downturn by maintaining your competitive edge.

   Imagine the creativity that Generation Y employees can bring when working with employees in the Traditionalist and Boomer generation. Now is the time for businesses to invest in mentoring workshops to discover how to leverage relationships like these to produce new and innovative results.

4. Losing valuable employees is costly to any business. In his article “10 Actions to Riding out a Recession”, Fayazuddin A. Shirazi, writes that companies should pay special attention to retain and develop top talent since “High-impact workers are often more susceptible to being poached by a competitor in a downturn”. Depending on the industry, it is estimated that the cost of losing well trained employees is approximately 30%, 70% or even 200% of that employee’s salary. This means that if an employee who earns $80,000 a year leaves to go to your competitor, it can cost your company $24,000 or even as high as $56,000 in replacement costs.⁴

   Shirazi writes that, “… with these costly figures it is crucial that employers understand the needs of their diverse employees so that each manager should encourage questions and new ideas by making it safe for employees to raise them. This open communication creates an environment where employees remain challenged and focused”.

   Another key suggestion Shirazi makes is to create a positive vision and attitude that acknowledges reality. He writes that when leaders exercise discipline and focus by mobilizing employees to respond to customers’ interests and values, they increase the chance that, when the downturn ends, they’ll come out on top.

5. Maintaining your company diversity brand⁵ is important during these difficult economic times. If employee reduction is to be considered, managers need to consider how these cutbacks will be perceived by their employees, clients and customers. The 2008 U.S. Employment Equity Opportunity Commission revealed that discrimination complaints rise during recessions. Having embraced the principles of active inclusion and workplace diversity, it would be a grave error to have all that progress of building and retaining a diverse workforce go down the drain.

   Cultural awareness does not only apply in hiring situations, but it is also important in cases when employee layoffs are inevitable. Effective managers should be aware of the impact of cultural nuances that downsizing may have on some of their employees. For example, some newcomers to Canada working in their first job are likely to look at a layoff as a sign of their inability to do a job right. It is also important for the employee to be able to save face. In many cultures, the loss of a job brings shame to the entire family. It is essential to be culturally sensitive and to provide an explanation for the layoff, to help people deal with their circumstances and move on to search for their next job.

   For those employees who remain on the job it is important for them to know that they are supported by the employer. Cuts to diversity initiatives may be perceived with cynicism and may cause some employees to disengage and seek new employment when times get better. Also, cutbacks on diversity initiatives may be perceived negatively by your client base.

   Maintaining your company’s profile as a leader in diversity is important – diverse employees and clients will regard your company as the employer of choice when the labour market begins to actively recruit new workers.

The fundamental message is that slow economic time is not the time for companies to sit idle or eliminate workplace enhancement programs. In fact, the December 2008 issue of the Harvard Business Review, BV Krishnamurthy suggests that “the downturn presents the perfect opportunity to enhance the skills that your [employees] need to succeed”. While this idea may be met with some trepidation by some managers, Krishnamurthy rightly says that the key is having a broad view of your organization’s goals to understand that this downtime investment will pay off in the long run.

With so much hidden potential in this slow economy, now is not the time to skimp on employee engagement, retention, motivation development, or multi-generation workplace workshops or preparing to hire from diverse sources to combat the pending labour shortage.

¹With Ontario's labour shortages fast approaching, there is a real need to take action to tap into populations that are under-utilized in the provincial labour market.
The Conference Board of Canada, 2007

²Now is the perfect time for your HR managers to be aware of the principles of inclusive recruiting and inclusive interviewing.

³http://www.forbes.com/2008/07/08/recession-innovation-retailing_leadership_clayton_in_sa_0708claytonchristensen_inl.html

⁴The American Management Association

⁵Maintaining your company's profile as a leader in organizational diversity is important since diverse employees will regard your company as the employer of choice as the labour market begins to actively recruit new workers.

Resources

Kariya, Scott (2001) The How-Tos of Hiring. IEEE Spectrum

Kaye, Beverly and Sharon Jordan-Evans. 1999. The High Cost of Talent Loss in Loving ‘em or Lose ‘em: Getting Good People to Stay

Krishnamurthy, BV. 2008. Use Downtime to Enhance Skills. Harvard Business Review

Langstaff, Michelle (2003) Make the best of a slow economy by hiring outside the box. (http://www.wilkinsgroup.com/newsletters/Tool_Kit-Spring_2003_.pdf)

Labour shortage could cripple Canada's tech industry: report. 2008. Financial Post. Available at http://www.financialpost.com/story.html?id=253575

Ontario’s Looming Labour Shortage Challenges. 2007. Conference Board of Canada. Available at http://workforcecoalition.ca/go/wp-content/uploads/2008/03/conference_board_report.pdf

Shirazi, Fayazuddin A.2008. 10 Actions to Ride Out a Recession. Available at http://www.chiefexecutive.net

May 8^th - 9^th Vesak - Buddhism
Buddhists celebrate the birthday of Buddha - dates vary between early April and late May. This is a day spent in reflective prayer as people cease worldly pursuits and engage themselves in religious activities. Devoted Buddhists pray in temples from dawn until dusk.

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Day of learning more about the contributions that various communities make to Canadian society and to celebrate Canada's richness and diversity.