Dear President Obama:
As you well know, for Americans who are fortunate enough to be employed, going to work these days is scary. Whether one works at a small non-profit or is employed at a large financial firm, it seems that no one feels immune from the possibility of layoffs, or as some like to say “right-sizing.” So what happens to employees who are in limbo, waiting to see if the axe will fall? How well do the survivors handle being left behind after a workforce reduction?
Human resources professionals will tell you that morale suffers, organizational productivity dips and most interestingly, recent research shows that downsizing leads to increased turnover.
In a 2008 study reported in the Academy of Management Journal, researchers Trevor and Nyberg found a positive correlation between layoffs and voluntary turnover. For example, companies who laid off 0.5% of their workforce had a turnover rate of 13%, 2.6 percentage points higher than the average; at a 10% reduction in force, the turnover rate rose to 15.5%. Thus, ironically, many companies who engage in downsizing to cut costs, later experience a higher voluntary turnover rate, leading to understaffing, inefficiencies and high replacement costs.
The study highlights two practices that companies can use to mitigate the link between layoffs and voluntary turnover – procedural justice and job embeddedness. Procedural justice refers to the perception that employer’s procedures are fair, for example the existence of a confidential grievances process or an ombudsperson that handles complaints. Job embeddedness speaks to an employee’s level of attachment to their place of work. Some companies increase job embeddedness by offering defined benefit plans, sabbaticals, on-site child care, hiring for organizational fit and flextime.
Practically speaking, we know that while companies are hunkering down and pondering layoffs and other cost-cutting measures, diversity and religious diversity initiatives are likely to be taking a back seat. However, this research caught my attention because it presents another aspect of the business case for diversity initiatives. Companies who proactively establish diversity programs before layoffs occur can directly impact turnover rates by influencing employees’ sense of procedural justice and job embededdness. Creating a workplace culture where employees feel that their religious diversity is respected and even welcome, will better position a company should layoffs be necessary down the road. An employee who feels comfortable asking a supervisor for a religious accommodation will be more likely to stay because he knows that the request will be handled fairly. An employee whose company offers flextime doesn’t have to worry about taking time off for religious observances. A company with a clear policy against proselytizing means that a subordinate won’t feel compelled to participate in a boss’ prayer offering before a lunch meeting. An employee who feels valued by the company for who she is as a person – not just as a job function – will be sufficiently attached to the company to weather any turmoil caused by layoffs.
Mr. President, while we as a nation are riveted to the economic news and the government’s evolving plan to take action, let’s not make the mistake of putting diversity and religious diversity issues on the back burner. Paying attention to diversity is worthwhile in its own right, but it also makes business sense. I urge you to examine the proposed Workplace Religious Freedom Act (WRFA) which, if passed, would raise the legal standard and make it harder for employers to avoid accommodating religious employees by requiring them to show a substantial reason why an accommodation is impractical or a hardship. Creating more inclusive – and more effective – workplaces is good for the economy and good for the country.
Sincerely,
Rachel Maryles
Program Associate
Religious Diversity in the Workplace