Hiring refugees makes economic sense - report

When a company like Starbucks pledges to hire 10,000 refugees globally by 2022, as it did two years ago, or when WeWork announces plans to recruit 1,500 refugees by the same deadline, the decision is often cast as morally driven. Refugees, the companies are saying, deserve opportunities in their new home and, contrary to the recent rhetoric, pose no special threat to American security.

Now a new study, the first to look at employers’ experience with hiring refugees in American workplaces, confirms what for many has been known intuitively about hiring refugees—the practice also makes sound economic sense for employers.

The just-released report, commissioned by the nonprofit Tent Partnership for Refugees and produced by the nonpartisan New York-based think tank Fiscal Policy Institute (FPI), is filled with encouraging statistics and stirring anecdotes that could help poke a hole in current anti-refugee sentiments that, under US president Donald Trump, have allowed refugee arrivals to the US to drop to an astonishing 30-year low.

Most significantly for employers, the research finds that the rates of retention for refugee employees tend to be far higher than average. That was true in 73% of the 26 firms interviewed by FPI, which also spoke to refugees and resettlement agencies for its research. Only four companies told the interviewers that refugees had higher turnover rates than other workers, and three said the churn in both groups was about equal.

“They had a life, they lost a life, and now they want a life again. They are eager and grateful,” said the head of a retirement residence, describing for the researchers the sense of loyalty he has encountered among employees who came to the US as refugees.

Generally speaking, the authors clarify, retention rates were highest among employers that paid more, while the trend was mixed among lower-paying organizations.

In we talk about hiring refugees in manufacturing jobs, the turnover rate among refugees was found to be 4%, compared to 11% for the industry average. It’s estimated that 15% of refugees in the US work in that sector.

For businesses, the higher retention translates into cost savings, of course—about $5,200 per year for every worker who stays in a job, the authors estimate, citing research on jobs that paid an average $13 per hour. They say that wage is comparable to the average paid by firms approached for the study, which represented various sectors—manufacturing, hospitality (hotels in particular), health care, meatpacking, transportation, construction, and others— in four intentionally economically diverse regions of the US: Atlanta, Georgia; Phoenix, Arizona; upstate New York, and eastern and central Nebraska.

The paper and its data about hiring refugees should help bust some of the myths about refugees being a burden to society, and allow companies that have thought about hiring refugees to discard the “stereotype that refugees are lazy or don’t want to contribute,” says Gideon Maltz, executive director of the Tent Partnership for Refugees, a foundation started by Chobani yogurt mogul Hamdi Ulukaya. “They contribute tremendously economically,” Maltz tells Quartz, “but more specifically they make for terrific employees.”

Culture clashes do happen—and can lead to improvements in overall company culture

Tent is not unbiased; it works with businesses like Starbucks to help them hire and train refugees, as Ulukaya has done at Chobani. The yogurt company’s workforce is now 30% to 40% refugees or immigrants. But Ulukaya, a Turkish immigrant whose company is headquartered in upstate New York, tells Inc. magazine that hiring refugees is “not about politics.”

“This was about hiring from our community. Refugees are dying to provide for their community,” he insists. “I always said that the minute they got the job, that’s the minute they stopped being refugees.”

Notably, the FPI authors acknowledge early in their paper that refugees are not a monolithic group. Rates of formal education and skills training among say, Syrian, Congolese, Iraqi, Somali, or Burmese refugees differ. For the sake of their report, however, they looked at characteristics that were common across the various workforces.

In addition to the strong retention levels, they also found that hiring refugees is easier and cheaper. When a group from a particular community found a decent, welcoming employer, the authors report, they would be highly likely to invite friends and family to apply for jobs—and the more refugees who joined a firm, the easier it was for the firm to integrate newcomers, creating a virtuous cycle. (At one hospital, refugee employees also created a link to the surrounding community, recruiting customers.)

Resettlement agencies also behaved more like recruiters when they saw success at one place of work, and told FPI researchers that because refugees are fully legal and cleared to work in the US, it was often easier to place them with companies where undocumented workers were becoming increasingly fearful of workplace raids by immigration and customs enforcement officials.

That isn’t to say that there haven’t been hurdles. “Some issues are likely to come up that have never arisen before and may take employers by surprise, although they are often easily manageable,” the authors write.

Language issues are to be expected, the authors note, and more so with refugees than other immigrant groups. “Where training videos may be available in Spanish, for example, the same is not likely for speakers of Karenni, one of several Burmese languages,” they explain.

Refugees in the US can also face long commutes at inconvenient hours and on inefficient public transit systems to reach employers, since it takes time for newly settled arrivals to both acquire a driver’s license and save enough money for a car. Then there can be problems around culture and customs; in particular, the researchers several times ran into tensions related to leaving shoes on or off at work and the length and appropriateness of taking bereavement leave for, say, a tribal mother.

But most employers found that sorting out such snags helped them better address the needs of the entire workforce. Maybe their bereavement leave policy was too restrictive? By hiring refugees, companies would benefit from being more flexible with arrival and departure times to ease transportation and childcare burdens, for instance. Some companies started allowing employees’ family members to come and have lunch at the place of work.

“Employers frequently felt they had learned and grown from the experience of integrating refugees in ways that made them not just better employers of refugees, but better employers in general,” the paper states.

At one hospital, when staff discovered that an employee was taking food that was considered spoiled out of the garbage, they learned that it was because she was putting her earnings toward an education for her son, an aspiring doctor. An executive explained, “We told her that we would help her but that she couldn’t do that anymore.”

When refugees do leave companies, many managers tend to categorize the departures as either “good turnover” or “bad turnover,” the study says. The “bad” variety is that which was seemingly unnecessary, or attributed to management that had not gone far enough to make sure that new employees understood and could succeed in their role. “Good” changes were connected to signs of social mobility among refugees who had, for example, secured the education needed to return to a profession they held overseas. “I had one guy who had worked in Syria as a dentist,” an HR manager in manufacturing told the researchers. “He’s in Chicago now, getting certified as a dentist. So that’s a good reason he left us.”

“It’s the American dream”

One head of a manufacturing company summed up the win-win situation he saw at his firm, linking the quantifiable efficiencies and less tangible, “softer” benefits of hiring refugees in his workforce: “On-time delivery is up, quality is up, residual knowledge is staying here, and I think we have a more connected workforce. And I think the reason is that we’ve tried to find appropriate people who could start and eventually move up in the organization, rather than looking for people with skills acquired elsewhere.”

His firm has started hiring refugees, on the basis of attributes like drive, ambition, and integrity, rather than insisting on certain skills. When you take that approach, he said, “then you can look at anyone.”

On many occasions, managers spoke of the personal payoff that comes with responding, in an incremental but powerful way, to one of the world’s injustices. “If you can be a part of changing one person’s life, that’s rewarding. Refugees are kind of cast out there by themselves. But everybody needs a sherpa—everybody needs a guide and some help along the way,” said one employer involved in the study.

Said another, “It’s the American Dream. It’s very cool to see.”