If the thought of Bay Street banks conjures up armies of middle-aged white men in suits, you might be surprised to learn that Canada's financial sector has some of the best diversity programs in the country.
True, the investment banking and trading parts of the business have few women, and certain visible minorities remain vastly underrepresented across the industry. But substantial progress has been made.
Royal Bank of Canada, the country's largest bank, hired its first woman, a Vancouver stenographer named Jennie Moore, in 1902. These days, the bank takes diversity very seriously.
It quantifies its goals. For example, when candidates are chosen for management jobs that could one day become executive roles, the goal is to have one woman or minority individual on the list. At the executive level, one in two staffings should be a woman and one in five a visible minority. RBC, which has 52,500 employees, also has set up cross-cultural training, mentorship programs and employee resource groups. It works with non-profit agencies to hire newcomers to Canada.
The strategy appears to be working. The proportion of aboriginal people employed by the bank in Canada edged up to 1.6 per cent in 2008 from 1.1 per cent a decade earlier. The number of people with disabilities rose to 3.8 per cent from 2.9 per cent. And, most notably, the number of visible minorities increased to 26 per cent from 12 per cent.
The force behind many of these efforts is RBC chief executive Gordon Nixon, who says diversity is not just the right thing to do, it's the wise thing to do.
"If you believe that your most valuable assets are human capital, there is this wonderful resource that should be maximized," he says. "What we've really tried to emphasize internally is the business opportunity that comes from having strong diversity and diversity policies."
Tara Perkins: How is the banking industry doing in terms of diversity?
Gordon Nixon: I would say the banking sector is way out in front. If you look at the capital markets side of the business, though, it is not nearly as advanced as the banking side would be.
Gender has always been an issue in the capital markets business. That's systemic across the industry in Canada and globally, and it's not from a lack of policies or effort. People coming into the capital markets work force at the entry level are actually split roughly 50-50 in terms of gender, but there's a much greater degree of women exiting the business.
Perkins: Can you give an example of how diversity has helped the company's bottom line?
Nixon: There's a great opportunity to ensure that the makeup of our employee base reflects the country. That gives us a better ability to provide service and have a cultural understanding of our customers, to serve them in different languages and ways. Particularly in the urban centres, we've worked very hard to ensure that our business reflects the communities we serve. And from a business perspective, it's been a win-win.
Perkins: How do you balance that with the need to ensure you're hiring the best people for the job?
Nixon: We do have targets that we try to reach at various levels across the organization, not just in the branches. But we also have standards and want to put the best person in each role. If you don't have objectives and measure your progress, things don't happen, so it is a bit of a Catch-22. Human nature is such that it is more natural for people to promote individuals that they are comfortable with, that they have a history with, where they share similar cultural backgrounds. So, if you don't ensure that people are required to look at interviewing and hiring different people then it doesn't happen. So, I believe you have to have targets - you don't want quotas, necessarily, but you want to hold businesses accountable. Ninety-nine-point-nine per cent of people want to do the right thing, but you've got to try to break out some of the systemic biases to achieve the right objectives.
Perkins: I've heard you say that you believe helping new immigrants find work could do more for the economy than much of the government stimulus funding.
Nixon: It is a huge competitive advantage for this country. Our Prime Minister has said, and I agree with him, that in the not-too-distant future skills shortages are going to be a bigger problem than unemployment. If you look at population growth, most is going to come from new immigration. So immigration is going to generate a lot of the economic growth and value in the economy, and Canada happens to have a very progressive perspective on immigration. I just think it's a huge, huge opportunity for this country.
Perkins: What do we need to do better?
Nixon: Ensuring that we're bringing the right skills into the country - not just new immigrants but the skills that will help economic growth - is extremely important. We're making progress around accreditation, but more progress needs to be made. For example, engineers who are well trained need to have the ability to practice in Canada. Also encouraging corporations, including small businesses, to take advantage of the skill base.
We did a study which showed that if every new immigrant was employed to their full capacity the economic impact for the country would be $13-billion.
Perkins: What advice would you give to other business leaders?
Nixon: The one that I like to emphasize is the business opportunity, because that's where people naturally buy in. Most people want to do the right thing by nature, but if you really want to see action taken you've got to get people to understand the value that can be added to their organization by taking advantage of this resource base. That idea's made a huge difference internally across RBC.
Perkins: Do you think the day will come in your lifetime when diversity is no longer an issue that has to be discussed?
Nixon: When we talk about diversity now, I think more of visible minorities than gender because, while gender diversity is still an issue, the progress that has been made at the bank is very dramatic. Among senior executives, 40 per cent are women. It's taken time. But I'm not sure you ever just say 'we've gotten there.' You still have to ensure that you have the programs and don't lose sight of the objectives.
Royal Bank of Canada's quest to diversify its work force has led it to the doorstep of non-profit programs that make it easier to hire newcomers to Canada. These partnerships have helped pad the bank's bottom line in unexpected ways, executives say.
For instance, for more than a decade RBC has been working with the Career Edge Organization. It facilitates intern placements that help newcomers get out of the cycle of "no experience, no job; no job, no experience." Career Edge screens the candidates. Companies that hire the interns are not required to give them a job at the end, but more than half of the time RBC does.
"The phrase we use is 'to serve the market, you need to hire the market,' " said Zabeen Hirji, the bank's chief human resources officer, pictured above. "We've hired a lot of professionals."
These partnerships have helped RBC find people with specific computer skills as well. The bank still uses old mainframe-computer technologies, and a significant proportion of its mainframe-skilled employees are retiring. It's become such an issue that the bank helped develop a post-secondary training program because Canadian universities rarely teach mainframe skills any more. But, Ms. Hirji said, "we've been able to hire people from other countries, Eastern European countries for example, who brought those skills and have filled a very real gap.
The bank has also developed internal methods to try to ensure it is capturing employees' potential, including a mentorship program that pairs high-potential, mid-level employees who are women or visible minorities with a senior leader in the bank.
Ms. Hirji herself participated as a senior leader, and she says it helped her to realize some of her subtle biases.
"It gets to the logical side, but it also gets to the heart."