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In the business world, 2020 will go down in the history books as the year of diversity, equity, and inclusion (DEI). Ignited by a social uprising over racial injustice in the United States, organizations around the globe pledged to build more diverse and equitable workplaces.1 Fast forward to today and there are signs that DEI&rsquo;s dominance is waning in many sectors, including insurance.
The 2024 Canadian Underwriter Brokerage DEI survey, sponsored by Sovereign Insurance, shows some concerning data points along these lines. The survey asked nearly 300 insurance brokers about numerous aspects of DEI, including how they feel about these efforts. Overall, 21% believe DEI&rsquo;s time is nearly up: 13% say it&rsquo;s a trend or passing fad their organization is participating in somewhat, while 6% &ldquo;disapprove&rdquo; of DEI and agree it&rsquo;s a trend or passing fad that&rsquo;s on its way out. An additional 2% are actively opposed to DEI initiatives.
At the other end of the spectrum, 47% of brokers indicate they &ldquo;appreciate&rdquo; DEI, viewing it as a strategic imperative. An additional 8% &ldquo;adore&rdquo; DEI and view it as a fundamental value. Nearly one quarter (24%) &ldquo;accept&rdquo; DEI, believing it&rsquo;s needed for compliance, brand reputation and employee engagement.
While DEI isn&rsquo;t about to disappear overnight, many organizations across different industries are pulling back on their efforts. Research and advisory company Forrester predicts organizational DEI investments will fall from 33% in 2022 to 20% by the end of 2024. The firm believes that in the wake of cuts that disproportionately affect DEI teams, &ldquo;too many companies will default to &lsquo;check the box&rsquo; efforts such as heritage days, leading to performative &ndash; rather than substantive &ndash; DEI programs.&rdquo;2
<h4>What&rsquo;s to blame?</h4>
There are numerous theories on why support for DEI is sliding. In the view of human-capital industry analyst Josh Bersin, DEI has &ldquo;played an unwitting but central part in the culture wars,&rdquo; which were brought on by declining trust in institutions, growing inequalities and the proliferation of technology. <a href="https://hrprofessionalsmagazine.com/2024/02/03/is-dei-going-to-die-in-2024/">As he writes in an opinion piece</a>, there&rsquo;s also a perception that DEI programs are &ldquo;woke&rdquo; and prioritize ethnicity and gender over achievement and ability. As a result, lawsuits in the U.S. have been filed against firms with diversity hiring programs, scholarships and internships.3
For DEI strategist and consultant Lily Zheng, waning interest isn&rsquo;t the culprit. Rather, <a href="https://hbr.org/2024/04/what-needs-to-change-about-dei-and-what-doesnt">as she writes in Harvard Business Review</a>, &ldquo;most organizations never integrated the many goals, programs, and initiatives spun up following 2020 into their core operations and never created the organizational infrastructure needed to turn a &lsquo;commitment&rsquo; into a reality.&rdquo; In other words, DEI programs that were started from employee demand wilted over time because they were never translated into organizational demand.4 
<h4>The risks of cutting back</h4>
Back when many programs were developed in 2020, DEI wasn&rsquo;t just viewed as the right thing to do. Many companies were moved by research demonstrating a strong business case for diverse and inclusive workplaces, from increased innovation to improved financial performance.
See: <a href="https://www.sovereigninsurance.ca/advice-and-tools/purpose-and-impact/can-an-organization-be-successful-without-addressing-diversity">Can an organization be successful without addressing diversity?</a> 
In the Canadian brokerage sector today, agreement on DEI being critical to success is dropping, but still high. In this year&rsquo;s survey, 75% of brokers agree that diversity must be addressed to be a successful business, down from 84% in 2023 and 91% in 2022. (This finding does not include 36% of respondents who describe their organizations as &ldquo;leading&rdquo; in diversity. The others labelled their organizations&rsquo; DEI culture as &ldquo;not started&rdquo; at 18%, &ldquo;beginning&rdquo; at 23%, and &ldquo;aspiring&rdquo; at 23%.) The survey also found that only three in 10 brokers (29%) in &ldquo;non-leading&rdquo; organizations are concerned about the risk posed by the lack of diversity in their firm. This level of concern has stayed stable from 2023 after dropping seven percentage points from 2022.
For those who agree DEI is vital for success, the top risks for not addressing diversity are losing access to the best talent (35%), losing good employees (30%), and lack of diverse perspectives and strong teams (30%).
Experts would agree those threats are real for any organization considering cutting back on its DEI efforts. The wide-ranging impacts include recruitment and retention challenges, missed innovation and creativity, declines in employee morale and engagement, lost productivity and profitability, and reputational damage.5,6
<h4>How to refocus on DEI </h4>
The question for proponents of DEI is how to bring the focus back to this important topic and ensure diversity is enmeshed in their organizations for the long term. While there may be waning interest and even pushback on DEI, this is an opportunity to rethink approaches and look for ways to improve.
See: <a href="https://www.sovereigninsurance.ca/advice-and-tools/purpose-and-impact/dei-momentum">How to maintain momentum on DE&amp;I</a>
At this point in the collective DEI journey, experts suggest organizations collect data on what is working and what&rsquo;s not. This can be done through employee surveys, listening sessions and talking to people across the organization to get a read on the current state of DEI.7 As DEI expert <a href="https://www.linkedin.com/pulse/transforming-challenges-opportunities-new-dei-2024-berthine-imzqe/">Berthine Cr&egrave;vecoeur West states</a>, &ldquo;The evolving DEI landscape in 2024 demands a more rigorous approach to measuring success, moving beyond surface-level diversity counts to assessing inclusivity, equity in advancements, and the impact on corporate culture.&rdquo;8 
Armed with data and insights, organizations can then tailor their investments to reflect the unique experiences and needs of their workforce, advises Aparna Rae, an educator and DEI consultant. Rather than running one-off DEI training sessions, leaders should focus on sustainable initiatives, policy changes, equitable processes, and continuous learning and development programs.9 She believes leaders should also articulate a clear and sincere stance on important social and political issues to enhance employee trust and loyalty and to support a positive workplace culture. &ldquo;Remember, the goal is to create a culture where diversity is celebrated, equity is pursued, and inclusion is the norm.&rdquo;
This article is part one in a three-part series on diversity and inclusion, based on Canadian Underwriter&rsquo;s 2024 Diversity and Inclusion survey. Stay tuned for next instalments covering diversity in leadership and the rise in polarization. 
Sources 
1 Harvard Business Review, &ldquo;<a href="https://hbr.org/2022/11/to-sustain-dei-momentum-companies-must-invest-in-3-areas">To Sustain DEI Momentum, Companies Must Invest in 3 Areas</a>,&rdquo; Nov. 4, 2022
2 Forrester, &ldquo;<a href="https://www.forrester.com/blogs/predictions-2024-future-of-work-employee-experience/">Predictions 2024: An EX Recession and an AI Revolution Reshape the Future of Work</a>,&rdquo; Oct. 26, 2023
3 HR Professionals Magazine, &ldquo;<a href="https://hrprofessionalsmagazine.com/2024/02/03/is-dei-going-to-die-in-2024/">Is DEI Going to Die in 2024</a>?&rdquo; Feb. 3, 2024
4 Harvard Business Review, &ldquo;<a href="https://hbr.org/2024/04/what-needs-to-change-about-dei-and-what-doesnt">What Needs to Change About DEI &ndash; and What Doesn&rsquo;t</a>,&rdquo; April 9, 2024
5 LinkedIn, &ldquo;<a href="https://www.linkedin.com/pulse/dei-cuts-have-consequences-raven-solomon/">DEI Cuts Have Consequences</a>,&rdquo; Oct. 10, 2023
6&nbsp; Forbes, &ldquo;<a href="https://www.forbes.com/sites/forbescoachescouncil/2022/10/13/five-reasons-to-not-cut-your-dei-budget-even-in-a-recession">Five Reasons To Not Cut Your DEI Budget, Even In A Recession</a>,&rdquo; Oct. 13, 2022
7 Greater Good Magazine, &ldquo;<a href="https://greatergood.berkeley.edu/article/item/how_to_keep_diversity_equity_and_inclusion_initiatives_alive_at_work">How to Keep Diversity, Equity, and Inclusion Initiatives Alive at Work</a>,&rdquo; Oct. 30, 2023
8 &nbsp;&nbsp;LinkedIn, &ldquo;<a href="https://www.linkedin.com/pulse/transforming-challenges-opportunities-new-dei-2024-berthine-imzqe/">Transforming Challenges into New Opportunities: The New DEI Paradigm in 2024</a>,&rdquo; March 7, 2024
9 Forbes, &ldquo;<a href="https://www.forbes.com/sites/aparnarae/2023/12/01/advancing-dei-in-2024-strategies-for-leaders-and-changemakers">Advancing DEI In 2024: Strategies For Leaders And Changemakers</a>,&rdquo; Dec. 1, 2023

Is DEI in the workplace a passing fad?

Purpose And Impact

Despite all the attention on diversity, equity, and inclusion (DEI), the picture of leadership diversity in brokerage firms is mixed.
The 2024 Canadian Underwriter Brokerage DEI survey asked nearly 300 brokers how they would describe their organization&rsquo;s leadership when it comes to representation from diverse groups. The results show an increase in those who say there is &ldquo;no diversity&rdquo; or &ldquo;homogenous leadership representation&rdquo; at 23%, up from 19% in 2023.
Less than half of brokers (48%) say there is &ldquo;some diversity&rdquo; (meaning mostly homogenous with the inclusion of some diversity in gender, race, sexual orientation, etc.), compared to 51% in 2023. An additional 16% (versus 17% in 2023) indicate their leadership is &ldquo;diverse,&rdquo; with more than 50% of the leadership team belonging to a historically marginalized or underrepresented identity group. And 13% (up from 12% in 2023) say their organization is &ldquo;leading,&rdquo; with senior leadership reflecting a vast amount of diversity.
Brokers were also asked how they would describe their organization&rsquo;s corporate culture when it comes to diversity and inclusion. On the positive side, there is an increase in the number of brokerages reporting their culture as &ldquo;leading&rdquo; (36% versus 31% in 2023), meaning their organization has made diversity a core principle and follows workplace diversity and inclusion best practices. However, there&rsquo;s also been an increase in brokers who say their organization has &ldquo;not started&rdquo; (18% versus 15%), meaning there has been no mention, effort, training, or communication whatsoever around DEI.
As the needle moves forward and backward, it points to the need for a greater push for diverse leadership at Canadian brokerages.
<h4>Why does diverse leadership matter?</h4>
While diversity efforts seem to have stalled at many organizations across many different sectors, a commitment to diverse leadership is more important than ever. It&rsquo;s not only a moral and ethical imperative, as some experts suggest, but there&rsquo;s a strong business case for diversity in leadership.1 According to McKinsey &amp; Company, it&rsquo;s stronger than ever.
In its recent global report, Diversity Matters Even More, McKinsey &amp; Company found that leadership diversity (including gender and ethnic diversity) is associated with higher financial returns, greater social impact, and more satisfied workers. More specifically, top-quartile companies had a 39% greater likelihood of financial outperformance versus those in the bottom quartile. Meanwhile, those in the bottom quartile for gender and ethnic diversity are 66% less likely to outperform financially on average.2
Even as companies are under pressure to maintain financial performance in a rapidly changing business landscape, the report says creating a culture of transparency and inclusion can help deliver on that performance.
Many benefits of diverse leadership ladder up to better financial performance. As leadership consultant <a href="https://www.forbes.com/sites/forbescoachescouncil/2021/06/24/14-important-benefits-of-a-more-diverse-leadership-team">Ellie Shefi says in Forbes</a>, &ldquo;Diversity in leadership means greater depth and breadth of experience and perspective, which in turn allows for a greater ability to relate to employees, clients and prospective clients.&rdquo; This facilitates innovation, which is critical to capturing and maintaining market share.3
Diverse leadership can also help attract and retain top talent. Executive coach <a href="https://www.forbes.com/sites/forbescoachescouncil/2021/06/24/14-important-benefits-of-a-more-diverse-leadership-team">Miriam Meima tells Forbes</a>, &ldquo;Emerging leaders and top performers want to see themselves reflected at the top. End users are best served by having their point of view represented by someone at the table.&rdquo;4
<h4>Benefits for brokerages</h4>
What&rsquo;s the view from brokers? More than one-half (54%) of brokers say they have left or considered other opportunities for any of the listed reasons in the survey, with the top ones being toxic co-workers/environment (34%), lack of career advancement opportunities (23%), and unmanageable workload (23%). Those who work at self-described diverse and leading companies are less likely to leave their employer or consider other opportunities for any of the listed reasons (33%). &nbsp;
Those in leading organizations are also more likely to be aware of the needs of new employees. They have noticed new employees are more diverse (87% versus 42%) and they are mentoring someone in their organization (75% versus 46%) &ndash; an important finding since mentoring is known to positively impact retention.5
Conversely, when asked about the biggest threats to them personally if their organization does not address diversity, just over one-half (52%) of brokers agree they are personally threatened if their organization does not address diversity. The top cited personal threat faced by not addressing diversity is poor workplace culture/environment (28%).
It&rsquo;s often said that DEI starts at the top, and the survey bears this out. Overall, the top actions that have been used to increase diversity in brokerages are leadership actively supporting DEI initiatives (40%), increased focus on hiring diverse talent (36%), and the company publicly promotes their DEI values, priorities, and commitments (35%).
Diverse leadership also impacts people&rsquo;s views on DEI across the organization. Brokers working in an organization with leading diversity in senior leadership are more likely than those with none to agree that adopting DEI best practices is better for business (83% versus 44%).
As the research shows, diversity in leadership matters and brokerages would be well served to embrace DEI at the highest level. As <a href="https://www.brainzmagazine.com/post/the-blueprint-for-effective-leadership-in-2024-using-diversity">HR expert Poly Panou writes</a>, &ldquo;Diversity in leadership is more than just a checkbox&mdash;it&rsquo;s a mosaic of experiences, perspectives, and backgrounds that enrich every facet of decision-making. Embracing diversity isn&rsquo;t just the right thing to do; it&rsquo;s a strategic advantage that fuels creativity, fosters innovation, and drives bottom-line results.&rdquo;6
This article is part two in a three-part series on diversity and inclusion, based on the 2024 Canadian Underwriter Brokerage DEI survey. Stay tuned for the next instalment on the rise in polarization.

Sources 
1 Culture Ally, &ldquo;<a href="https://www.cultureally.com/blog/dei-business-case-inclusive-workplaces-drive-growth">Business Case: Inclusive Workplaces Drive Growth</a>&rdquo;
2 McKinsey &amp; Company, &ldquo;<a href="https://www.mckinsey.com/featured-insights/diversity-and-inclusion/diversity-matters-even-more-the-case-for-holistic-impact">Diversity matters even more: The case for holistic impact</a>,&rdquo; Dec. 5, 2023
3,4 Forbes, &ldquo;<a href="https://www.forbes.com/sites/forbescoachescouncil/2021/06/24/14-important-benefits-of-a-more-diverse-leadership-team/?sh=606b59711f9b">14 Benefits of A More Diverse Leadership Team</a>,&rdquo; June 24, 2021
5 Monster,&nbsp;&ldquo;<a href="https://hiring.monster.ca/resources/workforce-management/employee-retention-strategies/mentors-are-key-to-success-retention/">Mentors are Key to Success and Retention</a>&rdquo;
6 Brainz Magazine, &ldquo;<a href="https://www.brainzmagazine.com/post/the-blueprint-for-effective-leadership-in-2024-using-diversity">The Blueprint For Effective Leadership in 2024 Using Diversity</a>,&rdquo; March 11, 2024

Why brokerages need to double down on diversity in leadership 

&ldquo;Don&rsquo;t talk about religion and politics&rdquo; has long been an unspoken rule at dinner parties and water coolers. However, as society becomes more divided on sociopolitical lines and previously not-suitable-for-work discussions are becoming more common, the workplace is becoming increasingly polarized. Experts say this growing polarization is leading to more arguments and less diversity of perspectives in the workplace.1
But is this the case in Canadian brokerages? As part of the third annual Canadian Underwriter Brokerage DEI survey, sponsored by Sovereign Insurance, researchers posed a new question to brokers about how the rise of polarization has affected their work life. Before answering, respondents were asked to think about politics and news items, as well as values or beliefs that force people to take sides on issues without the possibility of a middle ground.
The results show a split almost right down the middle. Close to one half (49%) of brokers say polarization impacts their work life in at least one of the ways listed on the survey.
Among those who do feel impacts, 34% indicate they self-censor and avoid talking about controversial topics at work. And 11% say they now interact less frequently with colleagues. Brokers who work at firms they describe as having no diversity in senior leadership are more likely to feel the impacts of polarization, at 59%. Meanwhile, even 26% of brokers at firms described as &ldquo;leading&rdquo; in the DEI space feel impacted.
Brokers were also asked if they participate in conversations about polarizing subjects at work. Two-thirds (66%) say they rarely or never hear or participate in discussions about polarizing topics, while 25% say sometimes. Just 2% of respondents say they hear or take part in these discussions &ldquo;all the time&rdquo; and 8% say &ldquo;often.&rdquo;
<h4>When tensions are high</h4>
When it comes to non-work-related topics, why should it matter to business leaders if people want to talk about more than just the weather? According to <a href="https://www.shrm.org/topics-tools/news/polarizing-conversations-workplace">HR consultant Matthew Burr</a>, conversations about controversial or polarizing topics &ndash; whether it&rsquo;s politics, religion, the economy or otherwise &ndash; can become emotional disagreements that cause disruption in the workplace.2
Other negative impacts of polarization noted by experts include mistreatment of employees, problematic effects on company culture, reduced performance, lower productivity and work quality, unhealthy conflict among team members, and threats to job retention and job satisfaction.3,4
More troubling for diversity, equity and inclusion (DEI) leaders &ndash; especially as diversity is meant to include diverse perspectives and beliefs &ndash; is that &ldquo;increased polarization and partisan conflict can create additional resistance to DEI change and potentially impact successful progress,&rdquo; according to The Cornell&nbsp;Center for Advanced Human Resource Studies&nbsp;(CAHRS). &ldquo;As some employees are looking to their employer to take a stand on social justice and political issues, this can add to the complexities of fully integrating an organization&rsquo;s DEI strategy and cultivating inclusion and engagement in the workplace.&rdquo;5
<h4>Keeping the peace</h4>
The challenge for HR managers and business leaders is how to enable people to share different views &ndash; especially as the political and economic landscape can&rsquo;t help but bleed into the workplace &ndash; and still maintain harmony.
To navigate potentially hot topics, experts advise organizations to put guidelines in place for non-work-related communication, ensure employees are trained on policies and procedures that might apply to polarizing conversations, encourage respectful dialogue, create opportunities to listen to ideas and find commonalities, and address and investigate any workplace complaints brought to managers or HR staff.5,6
And, even as DEI itself is becoming more polarized, organizations can stay the course. Writing in HRD Connect, <a href="https://www.hrdconnect.com/2023/06/13/empowering-organizational-commitment-to-dei-amidst-political-polarization/">DEI consultant Jarvis Sam</a> says strong leadership plays a pivotal role in maintaining an organizational commitment to DEI, particularly in the face of political polarization.
&ldquo;Leaders must not only articulate a clear vision for diversity and inclusion. They must also actively demonstrate their commitment through actions and policies,&rdquo; he writes, adding that organizations with leaders who champion DEI have higher employee engagement and increased commitment to DEI. &ldquo;By holding themselves accountable for progress, leaders can inspire employees and cultivate a culture of belonging that transcends political differences.&rdquo;7

Sources 
1 Washington Post, &ldquo;<a href="https://www.washingtonpost.com/business/2022/10/05/politics-bias-at-work-survey-shrm/">Politics are becoming harder to avoid at work</a>,&rdquo; survey finds, Oct. 5, 2022
2,5 SHRM, &ldquo;<a href="https://www.shrm.org/topics-tools/news/polarizing-conversations-workplace">Polarizing Conversations in the Workplace</a>,&rdquo; Jan. 20, 2022
3 Ethical Systems, &ldquo;<a href="https://www.ethicalsystems.org/workplace-political-polarization/">Workplace Political Polarization</a>&rdquo;
4 LinkedIn, &ldquo;<a href="https://www.linkedin.com/pulse/polarization-work-carrie-fox-she-her--pio9e/">Polarization at Work?</a>&rdquo; March 6, 2024
5&nbsp; Cornell University Center for Advanced Human Resource Studies (CAHRS), &ldquo;<a href="https://www.ilr.cornell.edu/sites/default/files-d8/2023-11/Navigating-Diversity-Equity-and-Inclusion-in-a-Polarized-World.pdf">Navigating Diversity, Equity and Inclusion in a Polarized World</a>,&rdquo; Nov. 13, 2023
6 Forbes, &ldquo;<a href="https://www.forbes.com/sites/forbeshumanresourcescouncil/2021/07/22/15-tips-for-navigating-potentially-polarizing-discussions-at-work/?sh=1cc71f9a7a4d">15 Tips For Navigating Potentially Polarizing Discussions At Work</a>,&rdquo; July 22, 2021
7 HRD Connect, &ldquo;<a href="https://www.hrdconnect.com/2023/06/13/empowering-organizational-commitment-to-dei-amidst-political-polarization/">Empowering organizational commitment to DEI amidst political polarization</a>&rdquo;

Startup Canada, Sovereign Insurance announce fund recipients

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