Hiring refugees works for business

Guest speaker Philippe Legrain
The National Business Review
11 August, 2018

Mohammed Alsahani once had an upholstery business in Damascus. But when civil war broke out in Syria, he and his family were forced to flee.

Eventually, they ended up in the German city of Kiel. And there, as it turns out, his skills were in high demand.

Christian Lübbe, the owner of Coastworxx, a company that makes sails for boats, hadn’t been able to find suitably skilled workers for years. So when he met Mr Alsahani, he jumped at the opportunity. A part-time job soon became a fulltime one. Now Mr Alsahani is managing Coastworxx’s new line of business: sun awnings.

Mr Alsahani’s contribution highlights a crucial point that businesses often overlook. Investing in refugee talent isn’t just about doing good; it also makes good business sense.

The global refugee crisis can seem dauntingly huge. But New Zealand’s annual refugee quota is 1000 carefully vetted people (which is to rise to 1500 by 2020). It’s a small, select pool of resilient people who have survived unimaginable hardship – and are now desperate to rebuild their lives and contribute to their new home.

Employers’ starting point for seeking to recruit refugees may be that they want to do good. That can also earn goodwill from the government, local authorities and customers, and help attract, retain and motivate employees.

The business case
There is also a strong business case for investing in refugee talent. Refugees are typically hard-working, highly motivated and loyal employees. Studies show the return on investment from hiring refugees is usually highly positive.

About 30% of refugees arriving in New Zealand have professional qualifications – and like Mr Alsahani they can fill skills shortages. Others can fill difficult jobs that young Kiwis no longer want to do. Having a more diverse workforce also tends to boost creativity and innovation, and can help businesses tap new markets locally and overseas.

The biggest employer in the small Australian town of Nhill is Luv-A-Duck, a local poultry producer. Luv-A-Duck wanted to expand but couldn’t find the workers it needed locally. So it contacted AMES Australia, the country’s national settlement agency, which provides a free recruitment service and a wide range of job-ready workers.

Some Karen refugees from Myanmar came to visit and four were hired. Now more than 50 work in Nhill. The newcomers have revitalised the town and its small businesses that had been dying as young Australians moved away.

A diverse workforce can also be hugely valuable. In Canada, refugees are often rejected for jobs ostensibly because they lack local work experience. But the Business Development Bank of Canada tries to make the most of internationally trained talent.

One recent hire is Mustafa Fadel, an IT engineer from Syria. The Bank believes that as well as contributing his technical skills, Mr Fadel’s different experience and perspectives made the team stronger.

Higher returns and turnover
Consultants at McKinsey have found companies in the top quartile for racial and ethnic diversity are 35% more likely to have above-average financial returns.

Staff turnover is a big cost for companies. When an employee leaves, finding a suitable replacement and training them is expensive. So a further reason for hiring refugees is that, when they find a welcoming work environment, they tend to stay put.

At L&R Pallet, a US company that produces wooden shipping pallets, the average worker used to remain in the job for only four months. But now that most of its employees are refugees this has risen to nearly seven years, and profits have soared.

Employing refugees also makes further recruitment easier. As Luv-a-Duck found, when refugees find a workplace where they feel welcome, they tend to tell others in their community. Employers also develop relationships with refugee communities and build a practice of integration into their workforce.

So there’s a compelling business case for hiring refugees: They are hard-working, highly motivated, heterogeneous employees with the high skills or helpful characteristics businesses need – and that you can hold on to.

Yet businesses may initially face challenges in hiring refugees. They may not know how and where to recruit suitable candidates. They may be reluctant to hire people who lack local work experience and qualifications. They may be wary of language and cultural barriers.

Fortunately, there are solutions to these issues. Host International, a non-profit, is partnering with Refugee Talent, an Australian online platform that matches jobseekers to employers, to help Kiwi businesses find the right refugee employee.

Internships, work-experience programmes and mentoring can ease refugees’ entry into the workforce. Cultural orientation programmes and language classes can also help.

While hiring refugees may involve an additional upfront cost, this tends to be rapidly repaid in higher productivity and reduced staff turnover. In Germany the Boston Consulting Group calculates that the payback period for this initial investment is typically only a year.

The takeaway is simple. Doing good can be good business. Refugees work.

Philippe Legrain (@plegrain) is the founder of Open Political Economy Network (OPEN), an international think-tank (@open2progress), who is touring New Zealand. The New Zealand Initiative hosted a few events with Philippe Legrain.

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