Racial Inequity Costs US Employers Billions, Says New SHRM Survey

Author: David B. Weisenfeld, XpertHR Legal Editor

June 1, 2021

Racial inequity in the workplace has cost US employers $172 billion in terms of employee attrition over the past five years, according to a new survey by the Society for Human Resource Management (SHRM). Some notable findings in the SHRM report,The Cost of Racial Injustice include:

  • 42% of Black employees have reported facing unfair treatment at work based on their race or ethnicity in the past five years (including 32% in the past year);
  • 26% of Asian employees in the US have reported facing unfair treatment at work based on their race or ethnicity in the past five years;
  • 21% of Hispanic or Latino workers have felt unfairly treated at work during that same time period based on their race or ethnicity; and
  • 72% of American workers claiming unfair treatment reported experiencing this treatment between one and five times.

Making matters worse for these employees, according to the report, those in leadership are often to blame for racial injustice at work. For instance, of those US workers who claim to have been unfairly treated in the past five years based on their race or ethnicity, 57% were reportedly mistreated by a supervisor, manager or leader other than their direct supervisor.

The report also revealed that the cost of lost productivity for US businesses due to unfair treatment based on race or ethnicity in the past year was $58.7 billion while the cost of absenteeism due to unfair treatment in the past year was an additional $54.1 billion.

In addition, there were counterproductive behaviors based on perceived unfair treatment relating to race or ethnicity that stopped short of employee attrition but nonetheless had real costs for employers. For instance:

  • 45% responded to feelings of being treated unfairly by putting less effort into their work than they could have;
  • 35% took longer to complete their work than they could have;
  • 28% spent work time on non-work activities as a result; and
  • 25% took extra or longer work breaks.

The survey was based on a sample of 1,313 US workers, which included an oversample of Black, Hispanic/Latino and Asian respondents. SHRM weighted the data to reflect the US adult population.

In a statement, SHRM President and CEO Johnny C. Taylor, Jr. said, "The path to equity is shared, and 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."