The Insidious Problem That’s Stressing Out Workers and Costing Employers Billions

Smiling black and white coworkers looking at camera in the office.
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The Society for Human Resource Management released a report this week with data that reveals just how expensive unfairness and a lack of empathy can be for U.S. organizations.

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According to SHRM’s new report, racial inequity has cost organizations in the U.S. $172 billion over the past 5 years, with absenteeism impacting American businesses to the tune of $54.1 billion in the past year, while lost productivity has resulted in a loss of $54 billion and turnover rates have cost organizations $171.9 billion over the past 5 years due to unfair treatment based on race or ethnicity, according to the survey.

According to the report, approximately 34% of Black workers said they believe they have been treated unfairly at work, 17% of Asian American workers and 16% of Hispanic workers say they’ve been treated unfairly at the workplace whereas only 8% of white workers claimed they felt the same, as reported by MarketWatch. The survey also found that emotional responses to unfair work treatment have negative changes in behavior and many reported behaving counterproductively while on the clock.

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Of those who claimed unfair work treatment based on race or ethnicity within the past year, 48% called in sick or missed work entirely, 45% said they put less effort into their work duties, 35% took long than necessary to accomplish tasks and 28% spent time on other non-work activities, reports MarketWatch.

A Citi report says racial inequality has cost the U.S. economy as much as $16 trillion over the past 20 years, added MarketWatch. “The situation goes beyond a crisis of employer-employee relations,” said Alex Alonso, the Society for Human Resource Management’s chief knowledge officer, as noted by MarketWatch. “It really actually has a steep financial cost. It threatens the success of any enterprise,” he added.

See: Industries With the Biggest (and Smallest) Racial Pay Gap
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SHRM recommends training as a key way to avoid these high costs and difficult challenges, and has introduced an Empathy Index to help companies and employees improve this “business skill.”

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About the Author

Josephine Nesbit is a freelance writer specializing in real estate and personal finance. She grew up in New England but is now based out of Ohio where she attended The Ohio State University and lives with her two toddlers and fiancé. Her work has appeared in print and online publications such as Fox Business and Scotsman Guide.

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