SHRM: Workplace racial inequity cost employers $172B over past 5 years

Dive Brief:

Turnover prompted by racial bias and unfair treatment cost U.S. employers billions in the past five years alone, according to research published Monday by the Society for Human Resources Management.
A SHRM survey of 1,313 U.S. workers found that, over the same five-year period, 42% of Black respondents experienced unfair treatment at work based on their race or ethnicity, while one-third had experienced such treatment within the past year. Twenty-six percent of Asian respondents and 21% of Hispanic or Latino respondents said they experienced similar treatment in the past five years.
While turnover caused by racial inequity at work may have cost employers up to $172 billion over the five-year period SHRM studied, absenteeism caused by experiencing or witnessing racial bias and discrimination at work may account for up to $54 billion in losses during the past year and lost productivity may account for some $59 billion in losses during the past year.

Dive Insight:

The combined aftermath of the coronavirus pandemic, the global reckoning with issues of systemic racism and an economic downturn "has put HR in the spotlight like never before," SHRM President and CEO Johnny C. Taylor, Jr., said in a virtual press conference Monday announcing the organization's findings.

SHRM's research released just one day before the anniversary of the murder of George Floyd in Minneapolis. Floyd's killing sparked a number of initiatives, statements, commitments and programs from employers, but the HR professionals in charge of such programs are still seeking sustainable paths to long-term change and building diversity, equity and inclusion within their organizations, sources told HR Dive in April.

"A major theme I expect to continue is the importance of creating personable and reputable workplaces that are shaped by sometimes difficult, candid conversations," Taylor said at Monday's event, noting the importance of empathy in ensuring workers can engage in such conversations. "This isn't easy, but it is imperative."

Empathy also emerged as a key differentiator for talent in SHRM's research. In a separate report, SHRM found 92% of workers surveyed said they would look for a company that demonstrated empathy when seeking a job. Moreover, employees who scored their organizations highly on empathy were more than three times more likely to recommend family, friends or colleagues do business with their organizations.

D&I initiatives may expand the boundaries of the workplace itself, with employers turning their focus on stakeholders ranging from customers to suppliers. As non-traditional work arrangements continue to develop, some observers have called on HR teams to focus on D&I issues unique to members of the contingent workforce.