About us

Diversity and Inclusion

Newsroom

Media Kit

Claims

Contact us

Employee referral programs (ERPs) have long been considered an effective way to recruit new employees. Research shows that referred candidates are more likely to accept offers and less likely to quit.1 This, in turn, results in lower recruiting costs and less turnover, which is a win-win for recruiters and employees alike.
Increasingly, though, employers are looking for referrals to help increase diversity and inclusion (D&amp;I). But how worthwhile are referrals for D&amp;I? The evidence is mixed, but the answer seems to be yes―if they&rsquo;re structured properly.
<h3 style="text-align: left;">Why traditional ERPs are flawed</h3>
In a traditional employee referral program, existing employees are asked to recommend potential candidates in return for an incentive, such as a bonus or time off. But this approach doesn&rsquo;t necessarily help increase diversity&mdash;and may even harm it.
Often, traditional ERPs suffer from nepotism (favouring family and friends), affinity bias (favouring people with similar interests, backgrounds, and experiences) or the halo effect (a cognitive bias in which one quality influences your impression of other qualities, for better or worse).2
In other words, they favour family, friends and those with similar backgrounds and experiences&mdash;and may be influenced by biased impressions of suitability based on traits such as ethnicity or gender. So, if an organization isn&rsquo;t already diverse, it won&rsquo;t become more diverse.
According to a 2017 survey of 53,000 U.S. workers by PayScale, a compensation software and data company, about 40 per cent of all referrals are white men.3 White women are 12 per cent less likely to receive a referral, men of colour are 26 per cent less likely and women of colour are 35 per cent less likely, according to the survey.
<h3 style="text-align: left;">Taking a data-driven approach to D&amp;I</h3>
While ERPs are flawed, they can still work if they&rsquo;re structured properly. The belief that an ERP will negatively impact diversity is flawed, according to HR expert Dr. John Sullivan.4 He argues that data-driven corporate referral programs allow organizations to identify the drivers of negative impacts on diversity&mdash;and to neutralize them.
Compared to even 10 years ago, Sullivan says today&rsquo;s workforces are more diverse and employees are much more connected because of social media. He suggests that organizations should &ldquo;rely 100% on data&rdquo; for their ERP approach to increase diversity. That means using data collected from recruitment efforts to identify what&rsquo;s working and what&rsquo;s not, and then adjusting accordingly.
Organizations also need to make diversity the &ldquo;primary focus and target&rdquo; of referrals, he says, while &ldquo;helping the team&rdquo; should be the primary motivator (as opposed to money). Developing an inclusive corporate culture and targeting diverse referrals starts by educating employees on how diversity improves team performance&mdash;and that this improved performance is an essential reason for increasing diversity.
<h3 style="text-align: left;">Making it work</h3>
This point is reiterated by Candice Morgan, head of diversity and inclusion at Pinterest, in an article for Harvard Business Review, who says that &ldquo;setting diversity goals isn&rsquo;t enough&rdquo; and that you need to repeatedly explain why they matter.5
In 2015, the company set a public goal to hire more women and candidates from underrepresented groups. By continually working to build a culture of inclusion, the company has seen significant increases in referrals in these areas&mdash;despite not offering monetary rewards for referrals.
Chipmaker Intel has also had success in increasing diversity through referrals. The company uses data to determine what is and isn&rsquo;t working and posts the results publicly. In 2015, they committed $300 million to support full workforce representation of women and underrepresented minorities by 2020.6 They achieved this in part by explicitly targeting certain referrals and then offering double the referral bonus for women, minorities and veterans.7
<h3 style="text-align: left;">Improving D&amp;I in the insurance industry</h3>
Each organization is different, and each will require a different approach to increasing D&amp;I. But by making diversity a &lsquo;target&rsquo; and taking a data-driven approach, ERP elements that have worked for other organizations can be adapted successfully in your own organization&mdash;making referrals a worthwhile way to increase diversity and inclusion.


Sources:
[1] Stephen V. Burks, Bo Cowgill, Mitchell Hoffman and Michael Housman; &ldquo;The Value of Hiring through Employee Referrals&rdquo; (The Quarterly Journal of Economics, May 2015, Vol. 130, Issue 2, Pages 805-839).&nbsp;<a href="https://academic.oup.com/qje/article-abstract/130/2/805/2331590?login=false">https://academic.oup.com/qje/article-abstract/130/2/805/2331590?login=false</a>
2 Janice Gassam Asare; &ldquo;5 Anti-Racist Hiring Practices Every Workplace Should Adopt&rdquo; (Forbes, Aug 11, 2022). <a href="https://www.forbes.com/sites/janicegassam/2022/08/11/5-anti-racist-hiring-practices-every-workplace-should-adopt/?sh=7f2270d2187a">https://www.forbes.com/sites/janicegassam/2022/08/11/5-anti-racist-hiring-practices-every-workplace-should-adopt/?sh=7f2270d2187a</a>
3 &ldquo;The Impact of Job Referrals: Effects on Pay, Engagement, Diversity&rdquo; report (Payscale, 2017). <a href="https://v2-wp-staging.payscale.com/data/job-referrals">https://v2-wp-staging.payscale.com/data/job-referrals</a>
4 Dr. John Sullivan; &ldquo;A Referral Program That Actually Increases Diversity&hellip; Requires These Design Features&rdquo; (DJS Talent Management Thought Leadership, Dec. 6, 2021). <a href="https://drjohnsullivan.com/articles/referral-program-increases-diversity-design-features/">https://drjohnsullivan.com/articles/referral-program-increases-diversity-design-features/</a>
5 Candice Morgan; &ldquo;What We Learned from Improving Diversity Rates at Pinterest&rdquo; (Harvard Business Review, July 11, 2017). <a href="https://hbr.org/2017/07/what-we-learned-from-improving-diversity-rates-at-pinterest">https://hbr.org/2017/07/what-we-learned-from-improving-diversity-rates-at-pinterest</a>
6 &ldquo;Intel Diversity and Inclusion Annual Report 2015&rdquo; (Intel, 2015). <a href="https://www.intel.com/content/www/us/en/diversity/diversity-2015-annual-progress-report.html">https://www.intel.com/content/www/us/en/diversity/diversity-2015-annual-progress-report.html</a>
7 Cat Zakrzewski; &ldquo;Intel Doubles Up on Hiring Women and Minorities&rdquo; (The Wall Street Journal, Aug. 3, 2015) <a href="https://www.wsj.com/articles/BL-DGB-42906">https://www.wsj.com/articles/BL-DGB-42906</a>

Are referral programs a worthwhile recruiting tactic for D&I in the insurance industry?

Purpose And Impact

Everyone&rsquo;s experience navigating the workplace as a member of the 2SLGBTQI+ community is unique, so fostering an inclusive culture is very important. That&rsquo;s why Sovereign supports the &lsquo;Proud of You&rsquo; ERG (Employee Resource Group). In June, the ERG hosted a 2024 PRIDE panel, themed: &ldquo;United in Diversity: Celebrated Our Community with PRIDE.&rdquo;
The panel explored the 2SLGBTQI+ experience in the workplace and in greater society. The ERG hosted in-person gatherings at several locations across Canada and livestreamed the event for those who chose to participate online. The in-person gatherings included celebrations and networking opportunities before and after the panel discussion.
<img src="https://files.sovereigninsurance.ca/advice-and-tools/purpose-and-impact/2024/United in Diversity Aurelie Kamayah panel photo.png" alt="A group of people wearing blue shirts holding pride flags" />
&nbsp;Aurelie Kamayah (she/her), Senior Underwriter, Technology and Cyber, at Sovereign Insurance, a member of the ERG and a panelist on the 2024 PRIDE panel, shares her experience of being 2SLGBTQI+ in the workplace, how she got involved with the ERG, and how workplaces can support diverse communities.
<h4>Looking back on your journey, what are some key life lessons you&rsquo;ve learned so far?</h4>
I didn&rsquo;t start enjoying life to the fullest until I was comfortable with who I was&mdash;and when I understood that the Canadian Charter of Rights and Freedoms was put in place to protect me. But I know I&rsquo;m lucky that my family accepts and loves me for who I am. Not everyone was brought up the same way I was. That&rsquo;s why it&rsquo;s important for me to keep advocating for equality and inclusivity so that everyone can feel free to be who they are.
<h4>Did you experience any challenges showing up as your authentic self at work?</h4>
At the beginning, when I was exploring my sexual orientation, I wasn&rsquo;t sure how to answer personal questions at work like, &ldquo;Do you have a boyfriend? Do you want to get married? Do you want to have kids?&rdquo; We&rsquo;ve become so accustomed to answers that relate to the status quo: a nuclear heterosexual family with kids. It didn&rsquo;t feel normal to say, &ldquo;I&rsquo;m a lesbian, I have a partner,&rdquo; until I became more comfortable with my own sexuality.
<h4>Why did you get involved in the &lsquo;Proud of You&rsquo; ERG?</h4>
With my educational background in social sciences and political science, I felt I could contribute my experiences and views&mdash;and hopefully inspire or help educate others. It&rsquo;s given me an opportunity to connect with other members who are openly gay and who have overcome challenges in life and work to be open and honest about their sexuality. I&rsquo;ve made new friends, I&rsquo;ve been given the opportunity to share my views on an internal national platform, and I&rsquo;ve learned quite a bit myself on issues relating to our community.
<h4>How can workplaces better support people who identify as part of the 2SLGBTQI+ community?</h4>
It&rsquo;s important to create safe spaces and plan events geared towards the community, such as supporting activities during PRIDE. It&rsquo;s also important to keep the lines of communication open with all employees and incentivize leaders and employees to use non-oppressive language in the workplace. For those who want to be an ally, educate yourself. When you educate yourself, you end up educating others. When you show up for one marginalized person, you show up for many marginalized people and groups.
<h4>What does PRIDE mean to you?</h4>
It means to love in peace.
You may also like: <a href="https://www.sovereigninsurance.ca/advice-and-tools/purpose-and-impact/a-story-of-resilience-carol-saad-on-why-accessibility-matters">A story of resilience: Carol Saad on why accessibility matters.</a>
<a href="https://www.sovereigninsurance.ca/diversityinclusionjourney">Learn more</a> about how Sovereign is championing DEI initiatives and how you can join the diversity and inclusion journey.

United in diversity: Aurelie Kamayah on celebrating her community with PRIDE

Directors and officers wear many hats, but one that&rsquo;s exceedingly important is their role in identifying and mitigating cyber risks. According to PwC&rsquo;s 2024 Global Digital Trust Insights survey (conducted May-June 2023), mitigating cyber risk is now second on the list of prioritized risks for business and tech executives, as the scale and cost of cyberattacks grow. The proportion of businesses that have experienced a data breach of more than US$1 million has increased significantly year over year &ndash; from 27% in the previous year&rsquo;s report to 36%.1
Alongside growing cybers risks, businesses are contending with a changing regulatory environment that puts directors and officers under heightened scrutiny. Bill C-26, which includes the Critical Cyber Systems Protection Act (CCSPA), proposes new cybersecurity requirements designed to protect services and systems deemed vital to Canada&rsquo;s security or public safety, including banking, telecommunications, energy and transportation. Directors and officers can be held personally liable if they &ldquo;directed, authorized, assented to, acquiesced in, or participated in the commission of a violation.&rdquo; Any violation can result in a hefty monetary penalty &ndash; up to $1 million in the case of an individual and up to $15 million for designated operators. Contravention of specific provisions of CCSPA can also result in imprisonment.2,3
While the proposed regulations start with Canada&rsquo;s vital industries, directors and officers in any business who fail to implement adequate cybersecurity measures or respond appropriately to breaches could open the door to claims against them.
<a href="https://www.sovereigninsurance.ca/advice-and-tools/managing-risk/why-directors-and-officers-could-face-cyber-breach-lawsuits" title="" target="">See: Why directors and officers could face cyber&nbsp;breach lawsuits</a>
&nbsp;With increased liability risks &ndash; along with the damage cyberattacks can inflict on a company &ndash; cybersecurity governance is more critical than ever. Described as &ldquo;the backbone of an organization&rsquo;s defense against cyber threats,&rdquo; cybersecurity governance refers to the policies, processes and practices organizations implement to manage and protect their information systems and digital assets. Directors and officers must take the lead, establishing a structured framework to address risks, compliance requirements and the changing threat landscape.4
As with other governance matters, the starting point is in the boardroom. In a Harvard Business Review article, experts observe that cybersecurity discussions in board meetings typically cover threats and the actions or technologies the company is implementing to protect against them. Instead, the conversation needs to focus on resilience. Board members should focus on the biggest risks to cyber resilience (from financial to technological to organizational to supply chain) and how to quickly respond and recover should that situation happen.5,6
The makeup of the board of directors itself may need to evolve. A lack of depth in cyber expertise can prevent directors from leading meaningful discussions about risks, which ultimately impacts governance and accountability.7
Organizations are advised to either educate their board members in cybersecurity and risk management or look to recruit directors with relevant experience in this field. As one risk consultant advises: &ldquo;When assessing candidates, ensure they can communicate multifaceted cyber issues at a board level, as this will be critical to holding the entire management team accountable for the cyber strategy&hellip;. The board&rsquo;s cyber experts should also ensure that all cyber-related materials and resources are regularly updated so that all members can stay informed about the organization&rsquo;s cyber strategy.&rdquo;8
For many organizations, the evolving risk environment may also necessitate a new role in the C-suite: Chief Information Security Officer (CISO). According to a Harvard Law School article, having a dedicated CISO, which is separate and distinct from the Chief Information Officer (CIO) role, has become increasingly important. &ldquo;The office of the CISO may have traditionally been seen as an IT function, but the far-reaching implications of a cybersecurity incident mean that cybersecurity must be considered a business risk,&rdquo; the article states. With oversight responsibility increasingly at the board level, &ldquo;the modern CISO needs to be able to communicate dynamic and fast-changing cyber risks in terms that resonate with both the business and the board.&rdquo; 9
Just as companies evaluate their cybersecurity measures to see where they&rsquo;re protected and where gaps exist, they should assess their insurance coverage. Directors &amp; Officers (D&amp;O) insurance can provide individuals protection against personality liability in the event of a cyber-related incident. What&rsquo;s more, having proper D&amp;O coverage can help attract and retain directors and officers, knowing they can confidently lead and make decisions without fear of personal financial loss.10
With comprehensive coverage and governance in place, organizations can stay one step ahead of the evolving cyber and regulatory landscape, ensuring their business and their people are protected.
&nbsp;
Sources 
1 PwC, &ldquo;<a href="https://www.pwc.com/us/en/services/consulting/cybersecurity-risk-regulatory/library/global-digital-trust-insights.html">The C-suite playbook: Putting security at the epicenter of innovation</a>&rdquo;
2 Government of Canada, &ldquo;<a href="https://www.justice.gc.ca/eng/csj-sjc/pl/charter-charte/c26_1.html">Bill C-26: An Act respecting cyber security, amending the Telecommunications Act and making consequential amendments to other Acts</a>&rdquo; 
3 Cox &amp; Palmer, &ldquo;<a href="https://coxandpalmerlaw.com/publication/bill-c-26-new-cyber-security-obligations-for-canadian-businesses-vital-to-national-security-and-public-safety/" title="" target="">Bill C-26: New Cyber Security Obligations for Canadian Businesses Vital to National Security and Public Safety</a>,&rdquo; Sept. 12, 2022
4 Safety Culture, &ldquo;<a href="https://safetyculture.com/topics/cyber-security/cybersecurity-governance/">Understanding the Essence of Cybersecurity Governance to Organizations</a>,&rdquo; Feb. 25, 2024
5 Harvard Business Review, &ldquo;<a href="https://hbr.org/2023/05/boards-are-having-the-wrong-conversations-about-cybersecurity">Boards Are Having the Wrong Conversations About Cybersecurity</a>,&rdquo; May 2, 2023
6 MIT News, &ldquo;<a href="https://news.mit.edu/2024/now-corporate-boards-have-responsibility-cybersecurity-too-0429">Now corporate boards have responsibility for cybersecurity, too</a>,&rdquo; April 29, 2024
7 CSO, &ldquo;<a href="https://www.csoonline.com/article/656596/how-much-cybersecurity-expertise-does-a-board-need.html">How much cybersecurity expertise does a board need?</a>&rdquo; Oct. 23, 2023
8 Directors &amp; Boards, &ldquo;<a href="https://www.directorsandboards.com/board-issues/cyber-risk/strengthening-cybersecurity-governance-amid-new-regulations/">Strengthening Cybersecurity Governance Amid New Regulations</a>,&rdquo; Nov. 10, 2023
9 Harvard Law School Forum on Corporate Governance, &ldquo;<a href="https://corpgov.law.harvard.edu/2022/11/10/building-effective-cybersecurity-governance/">Building Effective Cybersecurity Governance</a>,&rdquo; Nov. 10, 2022
10 HRO, &ldquo;<a href="https://hroresources.com/do-insurance-its-role-in-recruiting-independent-board-members/">D&amp;O Insurance: Its Role in Recruiting Independent Board Members</a>&rdquo;

Jennifer Rochefort

Portfolio Relationship Manager, MGA