Management research: Race has little impact on workforce turnover

BERKELY
October 5, 2006 7:37am

Employing workers of many different races does not affect average turnover in a retail workplace, although employees do quit more often if fewer colleagues are the same race, according to new research by two professors at the University of California, Berkeley, Haas School of Business.

In one of few studies to explore how workplace demographics affect employee behavior, Haas School Professors Jonathan Leonard and David Levine examined more than 70,000 employees at more than 800 workplaces of a national retailer.

"The most important takeaway is diversity itself doesn't matter much in terms of turnover for most groups of workers," says Mr. Leonard, chairman of the Haas Economic Analysis and Policy Group. "It suggests that people are, at least in this sector, pretty tolerant."

The findings by Messrs. Leonard and Levine contradict one argument by some diversity consultants who claim that having a gender and racially diverse workforce reduces turnover.

The two researchers also say they failed to find support for another line of thinking that argues that diverse workplaces experience more friction and thus require special training.

"We were interested in seeing whether in fact there really was an empirical basis for a lot of advice that is pretty commonplace in the diversity consulting industry," says Mr. Leonard. "One of the things we discovered, at least for the retail sector that we looked at, is that diversity itself is not a big driver of turnover."

At the same time, they did find support for the old proverb "birds of a feather flock together" when they studied another facet of diversity -- racial isolation, defined as being in a numerical minority in a workplace, whether it's white, black, Hispanic, or Asian.

"The problem for managers is that each new hire raises isolation for some groups at the same time that it decreases isolation for others," they write in their report.

One surprising finding was that women seemed to dislike gender diversity, the researchers say.

Women were slightly more likely to quit when the gender breakdown of their workplace was closer to 50 percent female and 50 percent male, and less likely when their workplace was less diverse, with either mostly female or mostly male employees.

Messrs. Leonard and Levine point out that their results best apply to the low-wage service sector, which is already characterized by high turnover. But as a chief entry point into the workplace, that sector is significant, Mr. Leonard notes. "The fact that there seems to be a lot of tolerance in that entry-level job is good news," he says.