Study: Refugees Stay In Manufacturing Jobs Longer Than Other Employees

posted on October 31, 2018

By Forbes |

The study found that the average turnover rate for refugees at manufacturing companies was just 4%, far below the 11% for all employees.

Refugees in the United States, some 15% of whom work in manufacturing jobs, stay in those jobs longer than do other employees, according to a new study by the Fiscal Policy Institute.

The report, commissioned by Tent — the non-profit founded by Chobani yogurt billionaire Hamdi Ulukaya to help businesses support refugees — studied employment trends in four areas that are major sites of refugee resettlement. Those areas were Atlanta, Phoenix, upstate New York and central Nebraska.

The study found that the average turnover rate for refugees at manufacturing companies was just 4%, far below the 11% for all employees. Across industries, 73% of the employers surveyed reported a higher retention rate for refugees than for other employees.

“We had anecdotal evidence suggesting it. I don’t think we expected to see quite as big a disparity,” said Gideon Maltz, Tent’s executive director. “These are people who have needed to flee their home countries because of violence and persecution, and are so eager to have a new opportunity. I think there is a degree of loyalty and gratitude for companies that are willing to take a chance on them.”

That higher retention rate would save businesses that hire refugees thousands of dollars. Citing a 2012 study by researchers at the Center for American Progress that replacing a worker typically costs businesses about one-fifth of the worker’s annual salary, the Fiscal Policy Institute report notes that for a full-time worker earning $13 an hour that translates to $5,200 per year saved for each worker that doesn’t have to be replaced. That cost savings, the report adds, should give employers flexibility to invest in translation services, help with transportation, or other ways of helping refugees integrate into their workplaces.

Manufacturing is a key industry for refugees because such jobs typically require less fluency in English. The jobs held by refugees are often not the higher-wage, more-skilled manufacturing jobs, such as in the auto industry, but rather positions in plants that assemble furniture or mold plastic, where compensation may be near minimum wage, according to the report.

At one of the firms studied, a high-end specialty manufacturer that was not identified, one-fifth of its 150 employees are refugees, a group it began hiring five years ago when turnover was higher than today. The result: The turnover rate among refugees was just 2%, versus 13% for all employees – while the company’s production quality had improved. A second firm, a metal manufacturing company with 180 employees including 40 refugees, found that its willingness to allow employees to prove themselves through a 60-day probation period had allowed it to widen its pool of potential

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