Diversity within SMEs is key to Canada’s economic recovery from pandemic shocks

Small Business Canada

In the context of a pandemic that continues to take its toll on all aspects of life, social inequalities persist and worsen. Black, Indigenous, and racialized women and gender-diverse people, young people, new immigrants, and mothers are amongst those who carry the lion’s share of the economic fallout, losing advancement opportunities at an alarming rate. It’s both an irony and a shame. These very groups pushed out of economic stability and work opportunities are an incredible asset. Their contribution is essential to Canada’s economic recovery and prosperity at this critical time. 

The good news is that this is where, with the right investment, vision, and support, small and medium enterprises (SMEs) can shine, poised as they are to drive diverse workforce participation.

SMEs provide jobs and opportunities

There’s nothing small about SMEs’ impact on our economy. There are over 1.2 million SMEs in Canada that are central to the country’s employment rate and GDP.

From 2014 to 2019, 36 percent of job growth was the result of small businesses and 25 percent was the result of medium-sized businesses. SMEs increased GDP by 51 percent in the goods-producing sector and by 56 percent in the service sector. (ic.gc.ca)

SMEs are a powerhouse of the Canadian economy. They can be a leader in driving big, much-needed change.

For example, SMEs can leverage significant growth opportunities in white male-dominated fields like science, technology, engineering, and skilled trades, where diverse women have faced many barriers to entry.

So far, women only comprise four percent of the skilled trades. By 2028, 700,000 skilled trades workers are expected to retire, many from SME workplaces. The opportunity to transition underrepresented workers into these roles at a “sea change rate” is incredible. (newswire.ca)

To diversify and modernize these fields, intentional shifts need to happen from the bottom up, and they need to happen now. Bias in hiring, training, and retention needs to be uprooted. Longstanding gendered barriers like a lack of childcare support, workplace sexual harassment, and mentorship opportunities need to be taken down. 

SMEs are well positioned to lead the necessary shifts in these sectors. MaRS reports that individuals working for small businesses are less likely to report being subjected to bias on the basis of one or more aspects of their identity than those working in larger organizations. We also know from our decades of work on these issues that SMEs often offer the first job opportunities to young women, trans, and non-binary people who are further discriminated against on the basis of race, Indigeneity, socioeconomic status, disability, sexuality, and immigration status. It is clear to us that even with smaller budgets, many SMEs are developing promising practices that, if further developed, promoted, and shared in SME networks, have the potential to make a significant impact.

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A diverse workforce is more important than ever

Advancing women’s equality in Canada has the potential to add $150 billion to the GDP by 2026. And research proves again and again that all kinds of diversity, equity, and inclusion (DEI) initiatives improve work conditions and results for employers and employees alike, regardless of the size of the organization. (betakit.com)

A massive uptake of DEI practices at the SME level can enable Canada’s economy to get the quick wins it needs at this sensitive time. Stabilizing SMEs is an important and necessary step, and we know that DEI can help. Diverse organizations are more successful at recruiting and retaining top talent. A recent report shows that companies with inclusive workplace cultures benefit from an almost 60 percent increase in creativity and innovation. In addition, getting diverse women and gender diverse people back into the workforce, in supportive organizations with inclusive workplace cultures, is fundamental to our economic recovery. This all requires a vision for an SME sector-wide approach with powerful learnings and guidance for an all-economy change. (catalyst.org)

SMEs need data collection and industry support

We can’t leave it to chance and good will. 

As worries about the pandemic’s impacts rage on, so do fears that SMEs will not be able to sustain another shock. The antidote to uncertainty is intentionality. SMEs need to take action and be supported to ensure their workers are safe and healthy. Worker well-being and ambitious business goals go hand-in-hand, so paid sick days and wellness-forward work terms are simply essential.

What gets measured gets done. SMEs need to get serious in evaluating their shortcomings to successfully plan and implement targeted DEI policy and practice interventions. They need to test and assess initiatives such as flexible work hours, novel professional development programs, and clear career tracks to attract and keep diverse talent.

It is time for a historical investment in the participation of diverse women and gender-diverse people in the labour market, and SMEs are the place to start. Make no mistake: this will drive Canada’s economic recovery and prosperity in a sustainable way, both now and into the future.

To learn more about In Good Company and how your small or medium-sized business can get involved, visit igcompany.ca. 

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