SHRM: Racial inequity costs US workplaces billions annually

Employee turnover due to racial inequity in the workplace has cost US organisations up to $172 billion over the past five years, according to new research from the Society for Human Resource Management (SHRM). 

SHRM estimates losses of up to $54 billion in the past year alone. The cost of productivity losses from racial inequity was even higher, however, carrying a price tag of $59 billion over the last year.

The new report, The Cost of Racial Injustice, revealed that one-third of Black employees faced unfair treatment at work based on race and ethnicity in the past year; and over two in five Black workers say they have experienced this in the past five years. In short, it proves that workplace racial inequity creates more stress, anxiety and loss of productivity.

“SHRM has consistently challenged leaders in the workplace to have open and honest conversations with their peers and teams about bias, discrimination and racial inequity; and then turn those conversations into concrete action,” stated SHRM President and CEO Johnny C Taylor, Jr. He believes in a shared “path to equity”. “It will take the collective efforts of HR professionals, C-suite executives, people managers and employees to create workplaces where inclusivity, empathy and respect are the cornerstone of culture.”

RACIAL INEQUITY STATISTICS

Key findings from SHRM’s research include:

• Over 2 in 5 Black workers (42%) feel they faced race- or ethnicity-based unfair treatment at work in the past five years. 
• Over the same period, 26% of Asians, 21% of Hispanics or Latinos, have experienced unfair treatment in the workplace due to their race or ethnicity. 
• Turnover due to racial inequity in the workplace may have cost US organisations up to $172 billion over the past five years. 
• Absenteeism due to anxiety, worry, stress or frustration steming from experiencing or witnessing unfair treatment based on race or ethnicity in the workplace may have cost US businesses up to $54 billion in the past year. 
• Lost productivity was even more costly, carrying a nearly $59 billion price tag in the last year.

DE&I’S MISSING LINK: EMPATHY

The report also previews SHRM’s new Empathy Index; a resource that will help organisations identify empathy gaps in their workplaces and create cultures where inclusion and equity are consistently at the forefront.

Promoting diversity, equity and inclusion in the workplace is impossible without a strong focus on empathy, noted the study.  Around 92% of workers said if they were seeking a job, they would specifically look for a company that demonstrates empathy, according to another SHRM research report released this week entitled, Empathy: DE&I’s Missing Piece. 

The findings make a strong business case for empathetic workplaces. Interestingly, employees who score their employer high in empathy, are also 3.25 times more likely to recommend family, friends or colleagues do business with their organisation.

Another recent report reveals that nearly seven in 10 Americans believe racial inequity is an issue that should be discussed at work. Click here to read more.