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Why Hiring Refugees Is Good for Business

Companies that hire and successfully integrate refugees into their workforce reap the benefits of high retention rates, better management skills and a wider potential labor pool, say the authors of new study of U.S. employers.

Written by Cyierra Roldan, David Dyssegaard Kallick Published on Read time Approx. 4 minutes
Job seekers fill out forms next to a wall with job opportunity advertisements at the annual jobs fair for refugees and migrants at the Estrel Hotel on February 20, 2018, in Berlin, Germany. Sean Gallup/Getty Images

How is refugee integration into the workforce going in the United States? Much better than you might think, especially if you’ve been listening to controversies in the media but haven’t recently visited a factory floor or a healthcare facility that employs refugees.

We spent six months doing just that – visiting the places where refugees work. We interviewed refugees, their employers, resettlement agencies and others in the community in four parts of the U.S.: Atlanta, Georgia; Phoenix, Arizona; upstate New York; and eastern and central Nebraska. The study we produced, Refugees as Employees: Good Retention, Strong Recruitment, found that employers are not only happy with the refugees they’ve hired, they’ve often learned from the experience and become better managers of a diverse workforce. We found at least three ways that integrating refugees can be good for business.

First, we found that employers who made an investment – often rather small – to integrate refugees in their workforce, saw higher retention rates among refugee employees compared to overall retention rates. Of the 29 employers interviewed, 73 percent reported a higher retention rate for refugees than for employees overall. The report was co-released by the Fiscal Policy Institute and the Tent Foundation.

Manufacturing is a big employer of refugees, for example. Among the four manufacturing firms for which we were able to get confidential internal data, the overall turnover rate was 11 percent while refugee turnover was just four percent. In industries that in general see very high job turnover, we still found that refugees were less likely to change employers than other workers. For example, in a meat packing firm with overall turnover of 40 percent it was 25 percent for refugees.

What’s behind the lower turnover? All workers want to feel welcomed, but refugees are especially responsive to a welcoming climate, and are more likely to stay with an employer once they find it. Refugees are also often looking for employers where they can work without much English, and where they can learn English on the job. Once they find an opportunity like this, they may be more likely to stick with it as their English advances.

Integrating refugees into the workforce does not come without issues. Some common ones include language, cultural differences, time off and transportation. However, in general, employers told us they did not treat these challenges as major obstacles to integration, but rather minor challenges that can be solved with some effort. Managers also get better at this as they go along. In fact, they get better not just at handling the challenges that come up with refugees, they get better at handling challenges in general.

Employers are not only happy with the refugees they’ve hired, they’ve often learned from the experience and become better managers of a diverse workforce.

This was our second discovery: that integrating refugees into the workforce not only provides financial stability in the lives of people displaced from their countries, it also opens the doors for others to a diversified, accepting and accommodating workforce with good management and the capability to handle other diversity issues that may arise.

Employers who have made an effort to make jobs work for refugees have created flexibility with time off, used other refugees as translators on the job, or scheduled shifts that work with the public transportation schedule.

An employer summed up how hiring refugees has helped him become a better manager for the whole work force: “We’ve had more success looking for character attributes – drive, ambition, integrity – and then training people with those attributes to learn the skills we need.” When that’s the way you approach hiring potential employees, “then you can look at anyone,” he said.

Third, we found that employers’ efforts to create an inclusive and welcoming workforce for all has resulted in a recruitment benefit as well. Refugees often like to work alongside other refugees or immigrants from the same background, which helps them maintain ties in their culture while navigating a new one in the U.S. Once a firm creates a work environment that is welcoming, many refugee workers reach out to members of their community who might want to work for that firm as well. Refugee resettlement agencies who have relationships with employers that are successfully hiring refugees provide another network to widen the labor pool.

Overall, the investment made to create an inclusive work environment for refugees is likely to be more than offset by the recruitment and retention gains. Many investments were of minimal or even no cost, such as flexibility with scheduling. When current employees served as translators, they sometimes were paid a little extra in recognition of their added responsibility. Employers referred to the investment as taking the initiative and time to hire refugees and making adjustments to make it work.

In terms of gains, one 2012 study found that replacing a worker typically costs businesses about one-fifth of the worker’s annual salary. The refugees in our study were typically earning $13 an hour; that translates into a company saving $5,200 per year for not having to replace a worker. That cost saving could be used to invest in translation services, help with transportation and other services that would help integrate refugees.

Employers, it turns out, like refugee workers. But that’s not just to feel good about providing an opportunity to refugees. Their firms are financially rewarded for investing in a welcoming and inclusive work environment.

The views expressed in this article belong to the author and do not necessarily reflect the editorial policy of Refugees Deeply.

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