Category Archives: How Equitable Are Diversity Strategies?

How Equitable are Diversity Strategies?

Having a diverse workplace is important. It brings together a variety of perspectives and experiences. It creates an environment that can by dynamic, inclusive and vibrant.

However, some could argue that the best way to see diversity reflected in an organization is to let it happen organically, that is the best people for the job are hired and then diversity results. I believe that diversity strategies do have a place in the workplace however they must prioritize experience and suitability at the forefront in order to be fair. Fairness and equality are just as important in any hiring strategy. In order to have an effective and successful workplace diversity strategies must be equitable.

Diversity strategies should be a part of a broader HR strategy, and not only the main component. Only by making diversity strategies a piece and not the whole part of the hiring process will an organization ensure they are hiring the most suitable and skilled individuals. Therefore I believe that it is very important that diversity strategies be developed with equity in mind in order to ensure success for all employees.

The proof is in the Pudding: How equitable are diversity strategies

Off the bat, I am going to say that they are as fair as you make them.

That being said, I believe that having a diversity strategy and an accompanying outline policy and procedure is the first step in the right direction. However, with any policy or program, an equitable execution requires both interpretation and context to accurately apply- and this is where the root of unbiased diversity creation rests.

Using a diversity strategy in any blanket sense of application can do more harm than good, and actually create a form of reverse discrimination. If you have a minority group in which your diversity strategy addresses including this group in your work force and has procedures in place to ensure that the ‘playing field’ is leveled for them, you inherently are placing all other candidates at a drawback in order to do so. Its sort of confusing to think that removing an advantage from one group makes it fair for all, but that is only one strategy, and perhaps isn’t part of your corporate strategy at all, and that’s totally ok…

I think that having a true alignment with your business’s culture and mandate is key to being able to be transparent about your diversity strategy, and the statement of it. A key element of what is ‘fair’ is always in the eye of the beholder, and is all based on perception. In order to ensure that your program is being perceived as intended, honest and forthright communication of it is integral.

The other piece is that the diversity strategy needs to be just that- truly strategic. This means it is applied with thought and careful to precision to only tip the scales when appropriate and needed.

Regardless of what side of the program one was on, the side of the minority or majority, I’d find it fairer to know that if there is a diversity strategy in place, and that closes a door for a candidate at this time, that another door will be opened for that candidate in another situation. In a grander sense, that as much as there is a tipping of the scale at one moment, that an equal and opposite tipping back the opposite favour is inevitable and will happen. In really deconstructed example: if sex was the factor at hand, if this time around the scales were tipped in the favour of a woman, perhaps then to be equitable they would be tipped in the favour of a man the next time, either through action or passivity.

Maybe that last example was a bit too much and a bit of a loose end. But, I think the factor remains is that these programs are inherently good, and have been needed and that it boils down to application, not existence of the programs that dictates the equitableness.

International Diversity Strategies: Diversity Matters Everywhere

When considering diversity strategies, I am reminded of a project I did a few years ago. The project looked at strategies from different countries (in this case, Sweden and Norway in particular) which were designed to increase the number of women in executive or board member positions. It was interesting that, while considering that these two countries are quite similar in terms of ideology and efforts to be inclusive, they took very different approaches to the issue.

The approach in Sweden is meant to institutionalize inclusion from the beginning. Equality is taught to children in school, and the culture and values of the country support this equal treatment. This “softer” approach requires companies to have programs (primarily mentorship programs) which support the inclusion of women, but are not required to meet certain quotas. Currently Sweden is applying this same approach to diversity with visible minorities, sponsoring cultural sensitivity workshops, and taking a strong stance against discrimination.

Conversely, Norway took what could be considered a “hard” approach. In 2005, the government in Norway instituted a gender quota. The law required that for most boards, women must make up 40 per cent of the board directors, with a 2008 deadline for compliance. This law was initially met with strong resistance, but the majority of companies did comply (non-compliance would result in dissolution of a board, so they had quite a bit of motivation).

Looking at the results now, Norway does lead significantly in the percentage of women in their boardrooms. In Sweden, women represent about 25 percent of board members, while in Norway women represent closer to 37 percent.

As well, a study by the Northwestern Journal of International Law and Business has recently deemed the project in Norway a success, where the increased number of women in the boardroom has led to “more focused and strategic decision making, increased communication, and decreased conflict”.  The study concluded that quotas are the only proven method of increasing the number of women in boards, and should be considered in Canada.

But does Canada truly have an issue with boardroom diversity? Studies in Montreal and Toronto think that they do, but not necessarily as much with women as with visible minorities. Canada has followed a similar path to that of Sweden, and has achieved similar results. In Toronto, women account for about 28 percent of leadership roles, while in Quebec they represent about 31 percent. However when you look at visible minorities, the numbers become extremely low.

In the Greater Toronto Area, female visible minorities account for 2.6 percent of all leaders, yet they make up 25 per cent of the overall population. Similarly in Quebec, 5.9 percent of leaders are visible minorities of either gender, while making up 22.5 per cent of the population. These numbers represent a significant lack of visible minorities in leadership positions.

It seems that in Canada there is a strong case for the quota approach, especially in the case of visible minorities. However within a company the best option to increase diversity (and reap the benefits of doing so) is to ensure that the corporate culture is aligned with valuing diversity. This involves promoting awareness of different cultures and values, and encouraging employees to consider the worldviews of those in different cultures. Supporting diversity is most often done through training or mentoring programs, but it is important to ensure that the goals that are being demonstrated are also reflected in the corporate culture.

Achieving diversity is not an end, but rather a means to an end; the goal is to increase a company’s competitiveness and creativity through diversity by empowering all employees to contribute, regardless of race or gender. I think if we consider diversity in this way, we can see that corporate diversity strategies are truly necessary. The success in Norway is a good example of how a balanced team can result in a better corporate future.

Nationalization as Affirmative Action

When Geraldine said that the topic for this month was to analyze the success of affirmative action, it took me a while to think about how affirmative action works here in the United Arab Emirates.

In Canada, affirmative action focuses on women, indigenous people and minorities, but in the oil rich countries of the Middle East it focuses on nationals (indigenous people) only.  The goal of affirmative action is to place qualified nationals in the technical, professional and labour roles currently held by expatriates.  This goal is congruent throughout the United Arab Emirates (the Emirates), the Kingdom of Saudi Arabia, Oman, Kuwait etc.  These initiatives are referred to as Emiratization, Saudization, Omanization and Kuwaitization respectively.

In these countries, foreign labour is employed to do much of the work.  Among Saudi Arabia, Oman and the United Arab Emirates, the Emirates have the highest ratio of expatriate workers.  It’s estimated that 88% of the population are expatriates (Rees et al. 2007).   In Canada, these workers would be immigrants and essentially there would be no distinction between them and the national workforce, but in the Emirates it is almost impossible to gain citizenship so employees have resident work visas and retain citizenship in their home countries.

One of the drivers of these affirmative action programs is the increasing unemployment rate for nationals leading to a concern that there will be civil unrest. As Looney (2004) notes: The unemployment rate among Saudis is 8.2 percent, reaching as high as 32 percent among younger workers. Clearly the inability of a youthful Saudi workforce to displace foreign workers is one of the great challenges facing the Saudi authorities

Economically, repatriating jobs is important because expatriates typically send 50% of their earnings to their home countries so they are not investing in the country where they reside, nor are they purchasing as many goods and services as the nationals. It is estimated that a decrease of expatriates would increase the purchase of goods and services leading to an increase in earnings in the private sector and an increase in international investments (Taecker, 2003 cited in Looney, 2004).

Two polices that have been introduced to stimulate this change-over include: charging fees to hire expatriates and providing financial incentives for hiring nationals.

In the Emirates, the Emiratization program began in 2000.  It was marketed as ‘positive discrimination’ and quotas were set for targeted industries including banks, airlines as well as for certain positions including HR managers, Secretaries and Public Relations positions.

Tanmia, The National Human Resources Development & Employment Authority, is tasked with leading the way and their mandate includes, reducing unemployment of nationals and recommending policies to the government (Tanmia 2006 cited in Mashood et al 2011).  In tandem with these initiatives, the Khalifa Fund for Enterprise Development focuses on the development of Emirati entrepreneurs, providing them with training and loans to start small businesses.

Like the Emirates, the Omani government is focused on job creation in the private sector for nationals. They are trying to improve the working conditions in that sector to attract Omanis and they are also encouraging Omanis to become entrepreneurs.

Funding higher education is another way the governments encourage their citizens to prepare themselves for gainful employment.

Has Affirmative Action Succeeded?

Back to the initial question: have these affirmative action programs been successful.  The articles I found are not completely up to date, but my observation is that these initiatives have been successful in the public sector and in the banking sector.  I still see very few Emiratis in private enterprise.

The public sector has higher wages, shorter working hours and more flexibility than the private sector. Private sector employers seem to prefer expats due to their knowledge, skills (including language skills), working attitude, related discipline issues and, one of the main factors, lower pay roll cost … (Mashood et al 2011).

 

Affirmative Action has made a Difference in Public Organizations

While it seems that there is a ways to go before nationalization becomes a fait accompli, I have to wonder if the tipping point is closer than we think.   In the Emirates, the government has offered incentives for hiring Emiratis – sometimes their salary costs are covered for the first year, and they have also increased wages in professions, like teaching to attract Emirati graduates.  Our college has a number of Emirati women who are administrators and instructors and our Associate Director is an Emirati man.  It is unlikely that we would have come this far without affirmative action, so looking at it from that perspective, it is a success!

Suggestions for the Future

 

Looney (2004) suggests that the government in Saudi Arabia needs to continue to offer incentives to encourage nationals to take jobs in the private sector.  His suggestions include:

  • making social benefits available to all nationals not matter where they are employed
  • limiting public sector employment
  • rationalizing recruiting and termination policies for nationals and expatriates
  • promoting self-employment
  • increasing technical training

I look forward to following the progress of nationalization in these countries and to reading what others have to say about affirmative action in the areas they are exploring.

Sources

 

Mashood, N., Verhoeven, H. & Chansarkar, B. (2011) Emiratisation, Omanisation and Saudisation- common causes: common solutions?

Looney, R. (2004) Saudization and Sound Economic Reforms: Are the Two Compatible?

Strategic Insights, Volume III, Issue 2

Rees, C., Mamman, A. & Braik, A.B. (2007) Emiritization as a strategic HRM change initiative: case study evidence from an Emirates petroleum company, International Journal of Human Resource Management, 18(1) 33-53