Chapter 6: Visible Minorities and the Private Sector

6.1 Introduction

Diversity is a key issue for the private sector. North American "companies are stepping up their efforts to address diversity issues. More businesses recognize that managing diversity is the key to future growth" (The Olsten Forum on Human Resource Issues and Trends, 1995). The question to be addressed is: what the public service can learn from how the federally-regulated private sector in Canada is faring in this regard.

The private sector sees the advantages of having a diverse workforce and sees diversity as an asset. The private sector is responsive to the clientele: "I need your business and I want you to see that I have representatives from your community." Some segments of the private sector even see the competitive edge of having visible minority staff as part of "the look". In addition, dealings with the Canadian Human Rights Commission help prod action on employment equity in the federally-regulated private sector -- those organizations are more concerned about the possible tarnished "image" and a resulting loss of market share. The fact that until recently, federal employment equity legislation only covered the private sector - and not the public service - could also be a factor.

In order to understand how the federally-regulated private sector handles the visible minority issue, a few firms in the banking, communications, transportation and other sectors were contacted and requested to fill out questionnaires. This was followed by interviews of their human resources staff. In addition, the former President of the Canadian Bankers' Association was interviewed. A repeated theme in these interviews and questionnaires was that diversity makes good business sense and it helps to serve the clientele better. As well, they were well aware of the negative social and economic implications of hiring a labour force that is not representative. According to a transportation company CEO, "representation does not happen as a wish list. It happens only if the organization wants it. Chasing a number is not sufficient," he added. "

If you pay only lip service to employment equity, you are not doing your organization any good" commented a banking executive. At least one major bank puts forth the hypothesis that their productivity has increased as a result of hiring, promoting and retaining visible minorities.

6.2 Hiring

Statistics reveal that the representation of visible minority hiring in the federally-regulated private sector is quite high, especially in the banks. Visible minority representation in the five major banks (the Royal Bank, the Bank of Nova Scotia, the Bank of Montreal, the Canadian Imperial Bank of Commerce and the Toronto Dominion Bank) in 1995 ranged from 10.7% to 18.2%, compared with 9.1% for the Canadian labour force and 4.1% in the federal public service.

It was clear from the questionnaires and interviews that the "commitment of the CEO to employment equity" was a dominant factor for the current level of visible minority employees in the private sector. A second factor was the reputation of the firm as a "world-class equal opportunity employer": this was particularly true in the case of the banks. This reputation, it was said, helped to attract top quality candidates from all designated groups. Factors such as the nature of the work, job satisfaction, and salaries/benefits, while not unimportant, did not come anywhere near as important as the commitment at the top. This is somewhat in contrast to the public service where, according to both employee and management participants, there is rather lukewarm commitment at the top to employment equity and a rather poor reputation as an equal opportunity employer for visible minority groups.

The banks particularly recognize that "access to information on jobs is the most difficult" and try to make sure that it does not become a barrier. In fact, there is a healthy competition among the banks to recruit visible minority employees. To provide information, some banks hold regular "job fairs" which attract a high turnout.

6.3 Recruitment/selection

Internal job postings and selection based on performance ratings were the most commonly used tools for internal recruitment among private sector participants in the study. One of the major banks has a career information network to help employees. The banks make a deliberate effort to identify persons with potential for key positions using a combination of performance appraisals, interviews, and aspirations. They are often identified by committees outside the division in question. A "competency model" is developed and a list of employees with potential is prepared. Those identified are given training to prepare them for higher level positions. This might be a practice that the public sector can emulate.

As in the public service, a variety of traditional techniques are employed to recruit externally. Some banks advertise as "an employer that encourages and respects diversity". They also enable the applicants to see that they have a reasonable number of visible minority employees. The most common labour supply sources were: applicants' inventory, educational institutions, word of mouth referrals, advertising and professional associations. For banks, universities are an important "feeder" or talent pool for new recruits, especially in the context of their Asian banking strategy. Universities were not used as much by other sectors. Among these external recruitment channels, given the nature of the public sector and its need to hire more visible minorities, universities, applicants' inventory, professional associations and advertising appear suitable.

Unlike in the public service, factors such as the variety of types of work, use of languages other than the official ones, visibility in the community, inclusive advertising, strong network and professional relationships with outreach recruiting sources, a visibly representative workforce, and work in larger centres are considered to be factors that encourage visible minority candidates to apply.

One of the most successful banks uses "behaviour-focused interviewing" instead of using "Canadian experience" as a means of screening out applicants. Even if potential applicants have never worked before, they are asked what they did in certain difficult situations to discern their attitudes and problem-solving abilities.

In some banks most of the recruitment is targeted. Branch managers receive a resource guide and have access to training tools, though this is not specific to visible minority candidates. Their advertisements are checked for cultural/racial bias and specify that they are an equal opportunity employer.

6.4 Internal recruitment

Access to information is also key with respect to internal recruitment in the private sector employers involved in the study. Once access to information is guaranteed, the onus is on the applicants. The "entitlement mentality" that the jobs should go to a certain group or groups is no longer valid, private sector representatives pointed out. Job information is posted on career information networks so that anyone can access it. Some banks have Internet web pages as well. In a restructuring context, first chance of refusal is given to those affected adversely (i.e., job loss), second to internal candidates and third to external ones. The composition of the labour force is constantly monitored and if they see that visible minority employees are leaving at a disproportionate rate, greater emphasis is placed on hiring from that group.

In order to secure information on jobs, a private sector practice that would be worth considering in the public service is the use of a 1-800 number to talk to the Diversity in the Workplace/ Equality Coordinator. The Office of the Coordinator conducts surveys, focus groups and open forums to gather information. One bank uses an open staffing system and posts all jobs including those of the executives. Employment equity advisory committees have been established in some non-banking sectors. Other firms use regular workplace climate surveys, newsletters, 1-800 numbers, and Intranet (WAN) to keep employees informed.

6.5 Part-time/temporary work

In most private sector firms, part-time and temporary workers are a significant part of the hiring strategy. This provides an opportunity for the firm to observe employees' performance and recruit permanently those who show promise. The visible minority groups, according to the private sector, accept part-time or temporary jobs more often than the others. In one communication firm, 23.3% of its part-time employees are from visible minority groups. This pool is the main source of recruitment of permanent employees. Some of the employment practices of the private sector regarding part-time or temporary work may not be feasible in the unionized setting of the public service. Nevertheless, it would be beneficial for the public service to see to what extent any elements of this could be used.

6.6 Outreach

Virtually all private sector employers interviewed provided outreach to visible minority communities. These include: teaming up with boards of education in what is known as the "Change Your Future" program and participating in a youth program to encourage youth to stay in school; matching them with a manager as mentor and role model; introducing special programs such as one by a bank in the Atlantic region to hire visible minority employees; and sending job posters to outreach groups and local community associations before they are posted elsewhere.

6.7 Upper level jobs

The private sector shares with the public service its lack of success in having visible minority employees adequately represented at higher levels. Only 2.4% of EXs in the public service in 1995 were visible minorities. The comparable figure for the five major banks was between 2.4% and 5.4%. (The visible minority availability figure for senior managers in the Canadian labour force was 6.6% as per the 1991 census). For middle management in 1995, visible minority representation in the banks ranged from 9.8% to 14.1% as compared to 7.3% for the Canadian labour force. Though there are many visible minority middle-managers in the banks, they have yet to reach the uppermost level. A mentoring or "buddy" system is considered to be helpful, as it was for women, to help visible minority employees move along their career path. Though some come to middle levels laterally, most come from lower ranks. Promotion rates of visible minorities in some banks exceed the general rate for all employees. Transportation companies have targeted better representation of visible minorities at higher levels as well.

6.8 Training and development

Human resources staff and interviewers in the private sector organizations involved in the study received training on human rights and employment equity more frequently than in the public sector. Almost all the firms had front-line staff receive information and training on human rights and employment equity legislation. Banks which are most successful in the hiring of visible minority employees have a "zero tolerance" policy for discrimination. Interviewers are trained to do bias-free interviewing.

6.9 Promoting diversity

The public service can learn from some of the following private sector practices to promote diversity: tracking course attendance and leadership training to ensure representation of designated groups and to see that career information network is universally accessible to all employees; establishing career development centres across the country; tracking hires, promotions and terminations for visible minority employees; and providing access to employment counsellors and employment equity assistance both on line and in person.

6.10 Performance appraisal

Performance appraisal is an important tool that helps the upward mobility of employees in the private sector organizations with which we spoke. In some firms, performance appraisal is done twice a year and career development meetings and individual career development discussions are held. Some transportation companies consider performance appraisals "paramount" and track them to increase efficiency, improve quality, improve the individual's ability to work with other employees and enhance performance.

6.11 Comfort level

Most firms participating in the study had a formal or informal mechanism for consultations with visible minority employees. In order to raise the comfort level of employees, all of them had policies to make the workplace a respectful and accommodating environment such as providing for religious holidays for minorities. Flexible work arrangements were in place to respect religious practices. For example, leave with pay is given for up to three days. "Reasonable accommodation" is practised in most firms.

All the private sector firms interviewed have explicit policies and/or mechanisms to deal with complaints of racial discrimination or harassment. Many have a harassment-free workplace policy. Most have a well-defined process for reporting, investigating and dealing with cases related to racial discrimination or harassment.

6.12 Taking the initiative

Some notable initatives of private sector organizations involved in the study were as follows:

• Outreach, through active involvement in the communities they serve.
• The deliberate promotion of networking opportunities.
• The establishment of employee development centres.
• The establishment of a performance-feedback mechanism based on input from supervisors, peers, subordinates and clients.
• The publication and distribution of guides and materials relevant to the employment equity designated groups.
• The establishment of diversity councils and other consultation mechanisms.
• Efforts to give internal recognition to departments that have done well in promoting diversity.
• Regular employee surveys to learn about employees' concerns and interests.
• Preparation of demographic profiles of communities served.

6.13 Lessons for the public service

Some of the private sector firms offered suggestions to the public service. They strongly felt that since the federal government exists for all Canadians, the public service should reflect Canadian diversity in its workforce. They suggest that top management of the public sector must be committed to the process of hiring and promoting more visible minority employees. In order to do so, there must be a crystal clear policy on the direction and objectives of the program including an education and training program for all personnel. All complaints of discrimination or wrong doing must be thoroughly investigated and the consequences, if the allegations are founded, should be severe. The public service, it was suggested, should establish competencies and performance measurements, if possible quantitative, based on performance appraisals. The setting up of performance goals with time frames that are specific, meaningful, attainable and relevant was also proposed. Providing development opportunities for visible minority employees that involve temporary assignments would be helpful as well. The private sector firms emphasized the importance of having a large talent pool from which one can draw middle and upper level managers on the basis of merit, not entitlement. However, if an organization concentrates on hiring visible minority employees only, a backlash is possible. Private sector representatives involved in the study generally felt that the public service may have an image problem to deal with. The question posed was: "If you are successful elsewhere, why would you go into the government?"

 Summary: Chapter 6

Visible Minorities and the Private Sector

This chapter describes policies and practices that contribute to the higher representation of visible minorities in the federally regulated private sector, in comparison with the public service.

Success in recruiting and retaining visible minority individuals depends on senior level commitment and concern for the firm’s reputation, driven by competitive concerns. Private sector companies believe that a diverse workforce will help then serve an increasingly diverse clientele and break into global markets.

Participants emphasized that equity does not just happen – it must be actively promoted. This takes place through:

•  Disseminating information on employment opportunities as widely as possible;
•  Reaching out to visible minority communities;
•  Identifying and eliminating possible biases in employment systems;
•  Providing diversity and equity training to human resources staff and managers; and
•  Encouraging innovation.

Other important initiatives included:

•  Anti-discrimination and accommodation policies;
•  Mentoring and career development programs;
•  Employee consultation and feedback processes; and
•  Statistical tracking to pinpoint problem areas.

Participants noted certain advantages in the private sector when it comes to the recruitment of visible minorities candidates, such as the need for employees fluent in languages other than English and French, employment concentration in larger urban centre and more flexible employment procedures. 

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