Sabrina Kandasamy, digital marketing director at Spin Master, is nine months pregnant – due any day now. It’s her second child, and she’s excited to talk about balancing a career and a family.

She’s got a nice plan for a staggered return to work that she and her boss negotiated, something she hopes means both parties come out ahead.

But she wasn’t always so sure. Kandasamy began her career on the agency side in the planning and account departments. “I loved working at an agency [which she won’t name], but you don’t have the balance. I couldn’t imagine being pregnant and working at an agency,” she says candidly.

She didn’t feel comfortable talking to her boss about alternative arrangements. “I could have sat there and said, ‘This is something I really want. I’m going to have my family, leave at a certain time.’ But because there is someone else who can stay, who is typically male, you’d go to your employer and talk to them about it, and they saw it as complaining.”

So she left to work on the client side.

***

Paul Evans can count on one hand the number of black people in the advertising industry. The founder of Toronto’s The Brave Alliance began in the industry in the mail room, but quickly worked his way into the creative departments. During his 20-year career, he moved into senior roles, becoming creative director at one agency before forming his own.

While still a junior creative, a senior CD pulled him into his office to ask his opinion on some work. After Evans gave his blessing, she responded with “Great, I was so worried I was going to offend your people.”

He blew it off, he says, but subtle digs continued throughout his career. “You slush it away. And as it starts to build up, you start to wonder what it all means.”

As a result of his race, he says he felt he had to work twice as hard to get coveted jobs and promotions and never felt comfortable talking about it. “You get labeled a complainer [if you bring up race as an issue] and labels follow you. I got the sense I was already being labeled [as black], so I didn’t want to compound and add to that label. So you shut up and don’t say anything.”

***

The lack of diversity in senior management has gotten a lot of hype recently, with companies like Yahoo! criticized for taking away flexible working schedules, seen as an important step towards increasing women in the senior rank and file. Prominent essays have ignited the debate, such as Wesley Yang’s “Paper Tigers” article in New York Magazine, which examined the “bamboo ceiling” (the barrier for Asians to the C-suite), or Anne-Marie Slaughter’s examination of whether women can have a career and a family, in the Atlantic.

But conversations are starting to happen, with companies like Unilever, L’Oréal and PepsiCo realizing the value of a diverse senior management team and putting in place robust programs and networks to help shatter that glass ceiling (Unilever and Coca-Cola recently won Catalyst Awards, which honours companies that expand opportunities for women in business).

But while consumer-facing companies have joined the technology, legal and financial industries in the diversity chorus, one of their most important partners – advertising agencies – have stayed on the sidelines.

Canadian statistics are scarce on the agency side, but looking at the U.S. (where only 3% of women hold creative director roles and 16% of senior roles at agencies, according to a study by U.S. agency Maternal Instinct) and the U.K., (where women account for 23% of executive or managing director roles, according to the IPA) reveals that women and visible minorities are still greatly under-represented in senior advertising roles.

Since there is no staffing overview of the Canadian creative industry for either women or visible minorities, and with such high-profile names as Leo Burnett’s Judy John, Juniper Park’s Jill Nykoliation and JWT’s Brent Choi leading the charge at major Canadian agencies, it’s been echoed on numerous occasions that Canadian advertising agencies are doing “Okay” on the diversity front. But a count of the names on strategy’s 2013 Creative Report Card’s creative director list reveals only 14% are women, placing us right in the middle of the pack compared to the U.S. and U.K., and nowhere near equal representation.

This contrasts greatly with the numbers coming out of university programs. For example, Humber College’s three-year ad program has a female-to-male graduate ratio of two to one, and Michael Rosen, program co-ordinator for Humber’s advertising program, says in some years, it’s been as high as three to one, while visible minorities make up 14% of the current crop of students. (Visible minorities make up 16% of the Canadian population and workforce).

Faced with these numbers, and clients beginning to lead the charge internally, what are agencies saying when it comes to addressing the lack of diversity?

Not much.

Many people strategy spoke to agree that there is a problem, but few say something needs to be done to address the issue, and most don’t believe policies or programs are necessary (balking at the idea of a “diversity quota”). Talent – they say – is the only thing people look for when hiring or filling positions and many say that hiring for talent should lead to a diverse team.

But if talent is the only factor, does that suggest women and visible minorities are statistically less talented or less capable of helming senior roles than the white male majority?

Research says otherwise.

A McKinsey study of European and Asian businesses revealed that companies with a higher-than-average number of female executives were as much as 47% more profitable than their competitors.

Meanwhile a study by the American Management Association found that companies with senior managers from non-European descent reported sales growth 13% higher than their competitors.

An ethnically diverse team leads to “greater innovativeness, greater creativity, quality decision making and eventually financial performance,” according to a study by the Malaysian Universiti Tunku Abdul Rahman.

And research by the Conference Board of Canada reveals women are more prone to using committees and have a better long-term overview of a company, surpassing men in their attention to audit and risk-oversight.

There’s also a mathematical argument, says Sharon MacLeod, VP marketing at Unilever.

“In Canada, 61% of university graduates [and 58% of the workforce] are women. By the very nature of that, if by the time you get to the C-suite your [talent pool is] 90% men, you don’t have the best men and women. You just have the best men. You’re missing out on half of the population.”
You aren’t choosing from the best of the best. You’re choosing from the best of what’s left, she says.

Alex Johnston, executive director of Catalyst, a global organization dedicated to breaking down gender barriers, says businesses are also going to start driving change to address the fact that only 29% of all senior-level managers are female, while only 5% are visible minorities (despite making up 16% of the population). In the legal profession, for example, companies are mandating that law firms better reflect the population (firms are notoriously bad at retaining female talent, according to multiple studies and oversight bodies). That, more than any other factor in the diversity debate, is driving change.

“I think this will happen in the marketing sector,” Johnston says. “Whether or not agencies are acknowledging it’s an issue, companies are going to start saying ‘It’s an issue for me, and if you want my business, then it’s got to be an issue for you.’ There’s a huge opportunity for people who can adapt early and adapt well.”

For example, Leo Burnett CEO and CCO Judy John says that while diversity is not something the agency actively promotes when pitching new business, companies are starting to speak up.

“We won a client recently, and they felt their previous agency  was missing that female perspective and it was impacting their work.”

A consumer study in the U.S. (where 80% of the buying power lies with women) by Maternal Instincts reported that 90% of respondents said they can’t relate to brands’ advertising. Having a diverse team brings different perspectives to the table, adds Nancy Vonk, founder of Swim, and can help agencies better understand the differences in target markets. Diversity can bring cultural and gender sensitivities to the table, allowing for a voice of dissent when a creative product may cross the line into offensive.

A number of agencies – made up almost exclusively of visible minorities, such as the Toronto-based The Multicultural Partnership or Dyversity Communications – exist for the sole purpose of reaching different cultural audiences, who have an estimated buying power worth $78 billion in Canada, according to a study done by Toronto’s DiverseCity project.

So with all these business arguments for a diverse senior team, what’s holding agencies back? Johnston says Catalyst found that a direct barrier for women is a lack of access to “hot jobs,” or what she calls mission-critical assignments, that often propel a career forward.

It isn’t necessarily a conscious decision on bosses’ part. Nor do people on the teams realize there is an inequality in receiving “hot jobs.”

“When we drilled down, we found men [had budgets] two times as great as their female counterparts, [as well as] more direct reports and significant more access to senior leaders of the company, and that has a huge impact on career advancements,” she says.

Advancement opportunities also coincide with prime child-rearing years, and when a woman goes on maternity leave, it can leave the company in the lurch, says Jill King, president of Toronto-based One Advertising.

“I had an individual have three children in a row, but because we couldn’t communicate openly about what that would mean in the end, it did cause an issue from a business perspective. In a smaller company, that is a reality owners and managers have to deal with. In some cases I think that can be what forces the conversation [of discrimination and diversity] underground,” she says. “On one hand, employees have rights. On the other hand, employers have to run a business. On both sides, you get a lack of communication because everybody has an agenda.”

“We need to end the penalty of being a parent,” Vonk adds, saying that in the agency world, hours can be unfavourable to people with young children, and while it would be great for both parents to share the burden, the responsibility to care for the family often still falls on the woman’s shoulders (Statistics Canada estimates women take on twice the household burden than men).

Angus Tucker, ECD and partner at John St., concedes that agency life can be hectic – though he says it is possible to balance – but it is the responsibility of company leaders to show that balance. (For example, he tries to leave the office at 5:30, and continues working once the kids are in bed).

While women face one set of problems climbing the ranks, the issues for visible minorities can vary greatly depending on whether they’re first-generation Canadians or were born and raised here.

For example, BBDO’s SVP/ECD Carlos Moreno says that in the Hispanic community, people aren’t necessarily pushed into advertising as a career choice, something Helen Pak, EVP/ECD, Saatchi and Saatchi, repeats for the Korean community. Kids are often encouraged to pursue other career streams, such as medicine or law (Pak began her career as an architect).

That being said, Moreno says that he’s seeing a change. Through his involvement with the Hispanic chamber of commerce, he’s fielded requests from youth wanting to learn more about the industry, while at the university level, more second-generation Canadians seem to be making their way into the advertising field. But only time will tell if this leads to greater diversity at the top tier.

On a more immediate basis, however, agencies might be losing the opportunity to tap global talent, says Prasad Rao, former SVP and general manager at MacLaren McCann and now partner at the Multicultural Partnership.

When comparing agencies and brands, he points to multinationals’ entrenched talent management systems in place, and global reach when filling the most senior roles, for their ability to attract diverse labour pools. He also theorizes that it makes these companies more amenable to hiring a new immigrant who might not have the deep Canadian cultural understanding or language skills that a Canadian-born candidate with similar credentials has.

Agencies, both local and those part of global networks, are less focused on HR, career management and facilitating global moves (which limits their internal talent pool). Further, he says many agency leaders don’t have international experience, making them more insular in their hiring choices. Because agencies aren’t thinking globally, they tend to pick local talent.

He also maintains that finding a job is about “who you know,” which for many non-local candidates, makes mid-career moves difficult.
There are core issues facing agencies as well. On a practical level, Tucker says that time isn’t on their side when hiring. In this lightning-quick industry, the priority is to fill the position, and that doesn’t leave much breathing room to examine the issue through a diversity lens.
And of course, there is discrimination. The word itself seemed taboo, with many saying it’s not a factor – other issues were simply at play.

But, as Karen Howe, SVP/CD at One says, “At a previous agency I was told categorically I would not be considered for the role because I was a woman and  was going to have a baby. I wonder if [discrimination has] just gone underground?”

“People say, ‘oh you’re not like other black guys. You’re a white black guy,'” Evans says. “And it’s so offensive that you have to grin and bear it. There’s this old boys club and they’re very comfortable amongst themselves. And as soon as they’re uncomfortable…well, it’s just easier to be comfortable.”

Even though discrimination might not be an overt practice; there are still currents of it in day-to-day business dealings. For example, a University of Toronto study found that hypothetical leaders with Caucasian-sounding names were rated higher than identically-qualified ones with Asian names. And Catalyst’s Johnston says that women face culminative barriers in their careers, often taking lower-paid (an average of $5,000 less than male counterparts) and less-prestigious jobs early on, which compound over time.

“There are lots of things that help you advance – networking, sporting activities, closed door meetings, socializing – and those are real barriers for women and minorities if they’re not participating in the same way as men,” Johnston says.

So what now?

As Evans says, having one woman or minority at the table doesn’t mean you’re representative of diversity. For instance, just because Canadian agencies have a few impressive female or visible minority leaders, it doesn’t mean our agencies are doing better than other markets or indeed other industries, and people shouldn’t be lulled into complacency.

“We’re never where we need to be,” says Minda Sherman, EVP human resources at Blast Radius, one of the few agencies we spoke to that has entrenched efforts to promote diversity.

Agencies need to accept that having diversity practices or targets doesn’t mean you’re losing out on talent, she adds. “Too often, there’s this notion that you either go with the member of a racial minority or the woman or you get the best candidate for the job. And that’s just not the case.”
She says that all other things being equal, Blast Radius will default to the most diverse candidate to fill a role, as well as cast a wider net to find top talent. As a result, the company has a gender-equal senior team, and more than 30% of its creative staff is women – which she says they’re still working on improving.

Agencies also bear responsibility for highlighting key talent and keeping them engaged, even while they’re trying to balance a family life.

“You have to be flexible if you want to keep good talent,” says Leo’s John, where the top three creatives are female. “If you’re really bright and doing well, we’re going to want to keep you.” This means allowing for alternative arrangements, she says.

But of course, the onus isn’t just on companies. As King says, people need to feel comfortable talking with their bosses to find arrangements that work for all parties, whether that be through more open policy discussions or a zero tolerance on racism (even subtle racism).

But that level of comfort that creates an environment where people are able and willing to talk about what they need to succeed can only occur if it comes from the top. That means leaders need to champion the issue.

“If [the boss] doesn’t say ‘I want to see a bit of rainbow action going on here,’ you get into the problem of telling yourself, ‘No, we all think differently. We all happen to be the same colour and gender, but we think differently,'” says Vonk. “I think there’s room for us to step back and say, ‘Can we all come out ahead if we look at the root of the problem and create more opportunities for a bigger group of people to come to the party?'”

And all of this begs the question: Why is the advertising industry as a whole so unwilling to address the lack of diversity?

Other fields have identified this to be a problem and are actively working to solve it. Advertising agencies are most certainly not immune to the problem. So, why are their collective heads in the sand?

People seem to fear this idea of “affirmative action” or “diversity quotas.” But as Blast Radius’ Sherman says, just because you look for diversity, that doesn’t mean you’re losing out on talent. And since talent, repeated over and over, was the most important hiring factor for agencies, tapping into a wider candidate pool should mean access to more talent, not less.

Read Rao and Sherman’s thoughts on what is holding advertising agencies back, and weigh in with your own in the comment section.