Stopping the Brain Drain: How Companies Can Keep Talented People of Color

by Beatryce Nivens

As countless numbers of talented people of color struggle up corporate ladders, many become frustrated, give up, and eventually leave their companies. And as the numbers of those jumping ship are increasing at alarming rates, corporate America stands to lose valued talent and billions of dollars.

Just 44 years after the passage of the Civil Rights Act of 1964, the progress made by people of color appears to be at a standstill. No longer satisfied with butting their heads against concrete walls, they’re seeking new opportunities elsewhere.

Several studies seem to document this phenomenon. One is Challenging Conventional Wisdom about Who Quits: Revelations from Corporate America, an exhaustive study of 4,000 people that, in its conclusions, found that African-Americans and Latinos are leaving companies at a rate of 4.79%, vs. 3.73% percent for Whites. While men of color left at a rate of 4.7%, it was higher for women of the same groups, at 5.42%.

Dr. Peter Hom, a management professor at Arizona State University’s W.P. Carey School of Business and the study’s author, believes this trend will significantly impact corporations in the future. On one hand, he feels it’s positive that corporate America is aggressively recruiting women and people of color. But at the same time, he says, “Corporations are also losing them. If they continue this loss, they won’t have a good pipeline for senior management positions down the road.”

The Level Playing Field Institute (LPFI), an organization dedicated to fairness in the workplace, conducted the Corporate Leavers study, which surveyed over 2 million people who left their firms. Its findings also point to significant departures of people of color and put the rate at three times that of White males. In addition, the survey found that unfairness was a major cause. Martha Kim, LPFI’s director of workplace programs and research, notes, “Respondents who said unfairness was the only reason they left were most likely to cite the following specific forms of unfair conduct — (1) being asked to attend more recruiting or community related events than others because of race, gender, religion, or sexual orientation; (2) being passed over for a promotion due to one’s personal characteristics, and (3) being publicly humiliated.”

When people of color leave their companies, regardless of the reasons, the price tag for can be staggering. According to Annette Merritt Cummings, vice president and national director of diversity services at the Bernard Hodes Group, a fully integrated talent- solutions provider, “The estimated cost or turnover is calculated to be $7,000-$12,000 per day for each single vacancy, and this is across all industries.” This accounts for costs companies must pay recruiting agencies to find new hires, dollars lost while positions are open, and advertising.

Corporate Leavers puts the figure much higher, at $64 billion, for the sole reason of people leaving from unfairness. The amount is “nearly equivalent to the 2006 combined revenues of Google, Goldman Sachs, and Starbucks, or the gross domestic product of the 55th wealthiest country in the world,” LPLI reports.

Given the high stakes, what can companies do to keep their most talented people of color from leaving? “If companies recruit people who are a match for the skills needed and live up to the commitment made to them, they’re much more likely to retain those employees,” Cummings says. “So the clearer a company can be about what employees’ responsibilities are going to be, what kind of career opportunities are available, the more likely they are to keep those people.”

Once hiring them, Hom says organizations must pay closer attention to new recruits. In his assessment, people of color and women are more prone to leave during the first year on the job. “The big issue is, how well are companies assimilating and helping these employees adjust to new jobs?” he says. “The trick is for corporate America is to keep them as veterans.

Organizations must also specifically pinpoint what people of color want Deborah Brown, a diversity and inclusion practice leader of Leader’s Edge, an organization dedicated to enhancing executive women’s effectiveness as senior leaders, suggests, “[Women] want to reap the same rewards for hard work as everybody else. They want to feel as though they’re able to make contributions, are valued, and respected.”

At the same time, people of color also want advancement opportunities, training, compensation, and benefits, a Hodes survey of 751 respondents discovered. Cummings explains, “They, particularly minorities who are just entering the workforce, understand that they must have skill sets and opportunities that will prepare them for their next jobs. They are not only thinking about how they can advance in their current jobs, but preparing themselves to be more marketable and highly competitive.”

On the job, people of color want their firms to acknowledge and recognize them for their talents, says Brown. The Leavers study corroborates this: “People stayed at companies because of better management who recognized their abilities.”  But when they don’t get the acknowledgements or benefits, they seek, the study indicated that they look for other jobs. One-third of those surveyed were actively seeking other opportunities compared to 19% of Whites. The study also determined that 44% of respondents said that they would express their concerns to their employers before looking elsewhere. Cummings believes this provides an excellent opportunity for organizations. “They can help people make changes or navigate career opportunities, or give them some advice on how to take advantage of those opportunities within the organization,” she says, adding that firms must be proactive and ask of employees people of color, “How engaged are they in the work that they’re doing? How engaged are they in terms of loyalty to the organization?”

Basically, nobody wins when large numbers of people of color leave companies. If they go to work for other employers, they must essentially start over, prove themselves to new managers, and begin the long trek up the corporate ladder a second time. On the other side of the equation, companies won’t be able to keep good and loyal talent, and it will essentially cost too much to replace them. It’s worth it to find other solutions.

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