The industrial products and services industry faces labour shortages in the coming years in both entry-level and skilled positions. Many companies are looking at diversity and inclusion as a means of not only improving their innovation and performance, but also for expanding their talent pipeline.
Attracting and retaining skilled talent has been an ongoing challenge for the industry. A 2018 labour shortage study [PDF] by the Business Development Bank of Canada reported that close to 40% of Canadian small and medium-sized businesses were having difficulty finding employees with the required skills and qualifications for hire. As the Canadian population ages and baby boomers retire, growth in Canada’s labour force is forecast to fall to near zero. Labour shortages were not expected to get better for at least a decade.
Latest diversity numbers
The industrial products and services industry compares favourably to other TSX-listed firms with regard to women director diversity levels. Data compiled for Osler’s 2021 Diversity Disclosure Practices [PDF] report shows that 27% of directors at industrial products and services companies in 2021 were women (up from 22% in 2020), compared to 20% for TSX-listed companies as a whole. On a per-board basis, the number of women directors also was higher at 2.19 for the industry compared to 1.83 for TSX-listed companies.
In terms of women executive officers, the industrial products and services industry was lower compared to other S&P/TSX 60 Companies. The Osler report shows that 18% of executive officers in the industry were women compared to 22% for S&P/TSX 60 Companies. On a per-board basis, the industry number was 1.69 compared to the S&P/TSX 60 Companies average of 3.30.
Breakdown of number and percentages of women directors in 2021
Breakdown of number and percentages of women executive officers in 2021
Trends since 2015
Mercer’s 2020 Let's get real about equality [PDF] study, which surveyed more than 1,150 companies in 54 countries, found that 40% of the global workforce is women, up from 38% in 2016. Female representation in executive and senior management levels also saw a modest 3% uptick. The study further found that the Black and Latino populations were underrepresented at every career level above the support staff level when compared to their representation in the general population. Black employees in the U.S. were found to make up 12% of support staff positions, but only 2% of executive level positions.
The Canadian Construction Association’s 2019 diversity and inclusion business case [PDF] highlights that only 12% of the construction workforce is women, with only 4% employed in on-site occupations. The association is working with its members to help them adopt diversity and inclusion initiatives. The association’s business case highlights the importance of diversity and inclusion to the industry’s future growth and prosperity.
Best practices and sector leaders
Osler’s 2021 Diversity Disclosure Practices [PDF] report identifies Tree Island Steel Ltd. as having more than 50% of their executive officers as women.
AceTronic Industrial Controls Inc., a repair, calibration, control and plastics processing products company, works with the Women Business Enterprises Canada Council to help open doors for Canadian women-owned businesses to supply chains across Canada. The company also works with the Canadian Aboriginal and Minority Supplier Council to provide and support a national information and referral network, which links major corporations and institutions with Aboriginal and minority-owned businesses.
Manufacturers of all size in the U.S. have taken the National Association Manufacturers Pledge for Action. By 2025, the commitment is to take 50,000 tangible actions to increase equity and parity for underrepresented communities, creating 300,000 pathways to job opportunities for Black people and all people of colour. In doing so, manufacturing will reflect the diversity of the overall U.S. workforce by 2030.
A number of companies have introduced supplier diversity and inclusion initiatives to enhance their revenues and to support their community outreach. According to a Greenstone blog, UPS launched its supplier diversity program in 1992 and now spends $2.6 billion annually doing business with approximately 6,000 small and diverse suppliers, with a goal to increase that spend year after year. UPS partners with third parties to run mentoring and training programs that support the growth and success of diverse suppliers. The company also has a diversity and inclusion steering council that provides oversight for its supplier diversity program. A third party is employed to validate supplier certifications every quarter.
W.W. Grainger, an American Fortune 500 industrial supply company, is helping to create an inclusive supply chain through distribution of more than 35,000 products provided by certified minority, women, LGBTQ+, disabled and veteran-owned businesses. In total, Grainger’s supplier diversity program includes 110 minority and women business enterprises.
Industrial gases company Praxair’s global procurement brochure [PDF] indicates the company has sponsored a supplier diversity program for more than 10 years, championing U.S. companies classified as small and diverse businesses. Since 2013, Praxair has also collaborated with its global affiliates to understand and promote supplier diversity opportunities in each country in which the company operates. Cultural awareness training for all of its employees has further become an important part of Praxair’s approach to diversity.
For the sixth consecutive year, DuPont was named in 2020 as one of America’s top corporations for women business entrepreneurs by the Women’s Business Enterprise National Council. The company’s diversity employee resource groups have been active since the 1980s. DuPont also has a gold program geared towards exposing doctoral and post-doctoral scientists from underrepresented groups to the wide range of career opportunities in industrial research at the company.
From supplier diversity programs to employee resource groups to formal policies, industrial products and services companies are realizing the value of diversity and inclusion initiatives. Reaching out to and recruiting from diverse populations will help with the labour shortage, but the key will be to develop and retain this talent. The industry’s future growth and prosperity is riding on the success of this approach.