Bridging The Gap: F&H Presents Findings From Research on Diversity and Inclusion in the Foodservice Industry

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The hospitality industry has one of the most diverse workforces of the North-American economy.

In Canada, 31 per cent of the foodservice workforce and 29 per cent of the hotel industry is made up of visible minorities according to Restaurants Canada and the Hotel Association of Canada, respectively. These numbers are higher than Statistics Canada’s 2016 Employment Equity Report, stating that 21.3 per cent of the general workforce is comprised of visible minorities. According to the U.S. Bureau of Labor’s 2020 statistics, the American foodservice and accommodations industry also has above-average minority representation at 51.8 per cent of the workforce compared to the national average of 36.1 per cent. But despite this above-average diversity, further examination of the American industry shows it does not equate representation as increasingly senior positions where we see a significant decrease in minority representation, dropping from 51.8 per cent to 39 per cent in foodservice and 34 per cent in lodging. At the C-suite and vice-president (VP) level, representation drops even further. Equivalent statistics of the Canadian industry are currently unavailable.

But there’s change on the horizon. Over the past few years, a greater understanding has emerged of how systemic racism has created the modern hospitality industry by benefiting certain ethnicities while suppressing Black, Indigenous and People of Colour (BIPOC). Hospitality companies are finally acknowledging the uneven distribution of racial representation in the industry, critically examining normalized industry practices and pushing for reforms.

The Current Landscape
Before real change can occur, the industry needs a data-driven understanding of the current distribution of diversity in its ranks. Currently, diversity statistics of the Canadian hospitality industry, especially statistics of senior positions, remain sparse and are concentrated on female and black representation. This is slowly improving as various organizations and advocacy groups collect data to paint a clear picture of diversity within all levels of hierarchy.

In a primary research study of 161 companies, using information found on official company websites, organization information websites and LinkedIn, we gathered a sample set of 1,342 executive leaders from the top companies in hospitality. Of these, only 29.96 per cent are women, 15.8 per cent are BIPOC and 6.26 per cent are BIPOC women. Looking at the Top 100 foodservice companies (as presented in F&H’s annual Top 100 Report), 27.16 per cent of the Boards of Directors and executive committees are comprised of women and 15.09 per cent are BIPOC. In comparison, looking at the Top 50 hotel companies (as presented in Hotelier magazine’s annual Top 50 Report), 33.28 per cent of the Board of Directors and executive committee are women and 17.03 per cent are BIPOC. Additionally, the percentage of women at the Board of Directors level (26.82 per cent) is higher than the percentage of women in the C-suite level of leadership (13.11 per cent).

Other concerning patterns became clear through the research. Of the 131 female executives, only five companies — Topper’s Pizza Canada, Dixie Lee Chicken, Copper Branch, InnVest Hotels and Easton’s Group — have female CEOs. The CEO role is still male dominated, while women in leadership tend to be in finance/accounting, general counsel/secretary, or human-resources roles.

The same can be said about BIPOC representation in leadership. With the exception of BIPOC-founded companies, where leadership has plenty of representation, the most common roles occupied by minorities are in revenue management, finance and human resources. Interestingly, most BIPOC women hold human-resource roles, while BIPOC men mainly occupy marketing, operations and finance roles.

There’s no denying diversity and inclusion are lacking in the hospitality industry — especially female and BIPOC representation in upper management. However, in recent years, and as society raised awareness about the inequity of the glass ceiling and lack of opportunities for minorities to climb the corporate ladder, the hospitality industry has made strides to become a more diverse and inclusive industry. A great example of the small, but steady changes the industry is making can be seen in the ranks of Airbnb. In 2017, it had a workforce made up of 49.81 per cent white, 36.36 per cent Asian, 2.52 per cent mixed race of non-underrepresented minorities and 11.31 per cent under-represented minorities (URM).

A year later, in 2018, the numbers changed, bringing the percentage of white staff down to 47.88 per cent and mixed race of non-under-represented minorities down to 1.78 per cent, while the number of URM’s increased to 12.34 per cent. In terms of gender equality at Airbnb, its global leadership went from 29.77 per cent female in 2017 to 34.48 per cent in 2018.

Common Diversity and Inclusion Practices
There has long been a trend of denial within hospitality, with companies reacting only when social pressure forces them to change. Over the last decade, increased advocacy for women and LGBTQ+ caused brands to work towards gender parity through partnerships with organizations such as Paradigm for Parity and the Human Rights Campaign Corporate Equality Index, which measures the practises and policies in place for LGBTQ+ inclusion.

Most recently, a series of incidents leading to the deaths of African Americans such as Breonna Taylor and George Floyd renewed attention towards institutionalized racism — the idea that racism is so deeply intertwined into our society that it acts like an invisible hand that guides our everyday actions. The immense public outcry for transparency and action fostered new practices within the hospitality industry that went beyond a statement online.

Immediately, larger corporations such as Yum! Brands, Wendy’s, and McDonalds made significant financial donations and pledges. Collectively, they donated millions of dollars in support of black-owned businesses and non-profits supporting black communities.
But beyond Black demographics, conversations were re-ignited around Indigenous and People of Colour (POC) representation. A few major foodservice companies, most notably Starbucks, Restaurant Brands International and Earls Restaurants, boldly acknowledged their shortcomings and revealed comprehensive plans to improve BIPOC representation in their ranks.

Common promises amongst many hospitality organizations included the creation of Diversity and Inclusion (D&I) Councils or a new C-level D&I position. These councils and executives are typically responsible for increasing representation within the workforce
providing more paths to leadership for BIPOC demographics, as well as overall promotion of equity within the organization. To enforce more accountability, several companies, such as McDonald’s and Chipotle, have begun tying executive compensation and incentives to achievement of diversity targets.

Anti-racism or anti-bias training has also become an integral part of several D&I plans, especially after Starbucks made headlines for shutting down all its stores in the U.S. and later, Canada, for one day so all staff could undergo the new training program. Others opted for the creation of new employee resource groups (ERGs) within organizations. Chipotle and Baskin-Robbins introduced new multicultural ERGs with the purpose of connecting BIPOC franchisees, improving cultural awareness and helping with career development.

Education support for BIPOC groups is arguably one of the most important initiatives companies can implement. Executive-leadership positions typically require an undergraduate degree and an MBA or equivalent designation. However, research has proven that BIPOC groups often have lower social class, resulting in poorer socio-economic status and reduced access to post-secondary education. These circumstances make the path to executive leadership significantly more challenging for many racialized minorities. In addition, a great number of existing internships and programs in the industry are geared towards university students, inadvertently paving a path to management for more privileged groups while blocking out others. Progress has been made with the introduction of scholarship funds such as McDonalds’ Black & Positively Golden Scholarship for students at historically black universities (HBUs), new mentorship programs connecting BIPOC employee with senior leaders and BIPOC-only management-trainee programs.

There has been significant progress when it comes to leaders taking responsibility for centuries of old habits and practices. In the context of the industry’s stubborn nature and years of empty lip-service, the very fact that all these initiatives and plans are being rolled out is a huge step forward for underrepresented groups. The Chief D&I position is a particularly notable milestone because it is typically given to a BIPOC individual, providing an exclusive role for minorities in the C-suite.

However, despite the progress, there remains one glaring question: what about the smaller foodservice groups? Within the Top 100 Report, only 20 companies had some sort of D&I statement on their websites or social-media platforms, and 15 of these have demonstrated a commitment to gender and BIPOC equity through actionable plans or existing practises.

The fact that larger public companies, which face greater scrutiny, are the only ones acting suggests the industry is changing because of societal pressure, instead of a true desire to improve. This creates an urgency for companies to place more racial minorities in executive positions and to support smaller BIPOC-owned businesses. Having mostly Caucasians in the C- suite essentially strips away a representative voice of more than half the workforce. Research studies summarized/collected by the Harvard Business Review showed that diverse leadership leads to psychological empowerment, increased productivity and quantifiable financial benefits. BIPOC leaders can connect with the workforce and foster more trust because they understand the challenges of being BIPOC in a predominantly white and male-dominated industry. This perspective is increasingly critical for a leader to maximize the potential of a diverse workforce, leading to sustained success on a global scale.

There is still a long way to go until the industry can claim to have representation and diversity at all levels of business. Many of the D&I plans are still in their preliminary phases and companies that implement these initiatives receive a lot of praise for being extraordinary or trailblazers. So, until all these goals are achieved, and the initiatives or practices become industry standards, there is still work to be done.

Looking Forward
The industry can’t be expected to achieve perfect equality and inclusivity overnight when there are still so many problematic societal structures related to sexism, classism and racism. Regardless of the protests and solidarity on social media, experiencing change can be challenging for many people, especially since this level of social disruption requires sacrifice and forces people to question their reality and to take responsibility for a social structure they did not personally create.

If the hospitality industry moves too fast, employees and guests may not accept or understand the changes being made.

The first step is having the conversations and raising awareness because change will only occur with collective effort. This is an ongoing process that has gained momentum and must continue. The next step is for hospitality groups to start collecting and publicly disclosing official statistics to measure the situation — something currently lacking in the Canadian hospitality industry. Only then can companies begin to create plans and set actionable goals for accountability. This is what much of the industry is currently working on.

Several global hospitality companies have already provided a guide for others to follow. Practices such as supporting BIPOC education, forming partnerships with minority advocacy groups and a greater intentionality with developing a pipeline of BIPOC talent must become standards.

Since systemic racism is deeply engrained into the structure of hospitality industry, companies need to overtly provide special growth opportunities for marginalized communities. Many people argue that BIPOC-exclusive programs and management training are unfair to others (a practise called reverse racism). But these programs simply serve to even the playing field for minorities in a game with a historically internalized bias.

Throughout this process, all parties must continue to exercise sympathy and patience — something that should come easy for hospitality’s people-oriented industry. Privileged demographics need to understand how systemic racism has contributed to their success, question the familiar and recognize how their power comes with a responsibility to champion change. Marginalized communities need to understand that it’s challenging for privileged groups to question their perception of society and to uproot the foundations of their beliefs. Current executives have been helped by certain social norms, but they’ve worked hard to merit their high-ranking positions and that can’t be discounted. It’s important to remember that advocating for change requires a long-term perspective because the protests of today trigger change that will be visible to future generations.

At the end of the day, this is the hospitality industry — it’s the business of serving people and employees are experts in empathy. With the existing levels of ethnic representation in the industry, given time, the industry can become champions of diversity and foster true representation. – By Stephanie Cheung & Cindy Nguyen, Fourth-year students in the Industry Consultation course of the School of Hospitality, Food, and Tourism Management at the University of Guelp

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