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Canadian Employers Focused on Improving ESG and DEI in 2021

The social and economic volatility of 2020 is causing Canadian employers to accelerate changes in the way they are investing in their employees.

This is according to Mercer’s “2021 Global Talent Trends Study,” which found that Canadian business leaders have shifted expectations to take a more expansive view of an organization’s responsibility to communities as a whole, extending success metrics beyond shareholder returns and placing individual and societal well-being at its core.

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The survey found 65% of Canadian HR leaders believe their company has continued or stepped up the pace toward an environmental, social and governance (ESG) and multi-stakeholder business approach. Of those now moving forward with stakeholder capitalism, 57% are tying ESG goals to their purpose while 41% are embedding ESG metrics into executive scorecards. However, only 12% of surveyed Canadian plan sponsors currently direct their retirement portfolio investments toward sustainability.

Many Canadian employers stepped up in 2020 to protect jobs and pay during business closures, support caregivers and provide sick leave. As a result, two in five Canadian companies today say managing inclusively and with empathy has become more critical for future resilience.

“A successful shake-up of our workplaces requires trust on all sides,” said Daniel Imbeault, partner in talent strategy at Mercer Canada. “Contributing to collective responsibility will require companies to align benefits goals to business priorities, interrupt gender and race inequities, deliver on flexibility for all and engineer a step change in the employee experience through radical HR transformation — all of which are essential to the reinvention this new era demands.”

The survey also found that 58% of Canadian companies are re-examining what’s most relevant to different persona groups, signaling a shift toward greater personalization of inclusive benefits. The survey also noted only 18% of HR leaders are taking into account the impact of 2020’s transformation or right-sizing plans on various minority groups, and just 13% are considering the pandemic’s impact on these populations. Additionally, almost a third (31%) of Canadian companies plan to improve analytics on pay equity in the year ahead.

The survey found that accountability and action on improving gender, race and wealth gaps will be front and center in 2021, and organizations in Canada will invest more in diversity, equity and inclusion (DEI) analytics and insights.

“The focus on diversity has also highlighted the need to deliver personalized and flexible solutions at work.  We need to rethink flexibility as a whole, including flexibility in policies, practices and benefits available to employees, in order to deliver a better overall employee experience (EX),” said Marie-Josée Le Blanc, Partner and Health Innovation Leader at Mercer Canada. “Given the experience of remote working and the need to adjust capacity swiftly in 2020, it’s no surprise that 2021 Canada transformation plans are concentrated on reinventing flexibility in all its guises (40%).

The survey also found 53% of Canadian companies plan to offer more access to remote health and benefits options and 64% plan to add benefits to address mental- or emotional-health issues. In addition, 50% are training managers to spot mental health issues, compared to only 29% of companies globally.

Nearly two-thirds (64%) of HR leaders surveyed expect the pandemic to affect their business negatively and while 23% of Canadian companies agreed the lockdown has flagged the need to outsource investment and/or fiduciary management to enable HR to focus on core workforce activities, only 50% have outsourced plan management or delegated fiduciary duties.

More than four in five (83%) Canadian HR leaders report that skill development will continue to be a focus in 2021 and while 49% said reskilling toward critical talent pools is a priority, only 31% of companies are gathering information on individuals’ current skills and just 12% have increased spending on workforce upskilling or reskilling for the entire workforce.

Nearly two-thirds of companies (60%) said adaptability was the most important resiliency skill, followed closely by collaboration (58%). Two in five organizations (42%) made it easier to share talent internally in 2020 as a result of the pandemic and a further 22% plan to do so in 2021.

“Canadian employers will need to push themselves out of their comfort zones and start re-imagining HR as strategic advisors who can help their organizations both anticipate the people impacts of business decisions and address employee concerns with empathy,” Imbeault said. “2020 has been a year of reacting and responding, whereas 2021 will provide an opportunity to rebound and reinvent.”


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