Diversity and Turnover: An Unexpectedly Weak Link

Employees are more likely to quit if few of their co-workers share the same race. That’s the popular thinking among diversity consultants. The problem is: employing workers of many different races actually has little effect on turnover, according to one of the few case studies exploring how workplace demographics affect employee behavior.

“The most important takeaway is diversity itself doesn’t matter much in terms of turnover for most groups of workers,” says Professor Jonathan Leonard, chairman of the Haas Economic Analysis and Policy Group, who, along with fellow University of California – Berkley (UC Berkley) Haas School of Business Professor David Levine, examined more then 70,000 employees at more than 800 workplaces of a national retailer. “It suggests that people are, at least in this sector, pretty tolerant.”

Leonard and Levine, who is director of the Center for Health Research at the UC Berkley, define a diverse workplace as one where each gender and racial group has an equal share of employment. One surprising finding of the study, however, is that women seem to dislike gender diversity. In fact, women are more likely to quit when the gender diversity of their workplace is close to fifty-fifty than when it is mostly female or mostly male.

Additionally, researchers found that all minority groups were more likely to quit workplaces where a greater proportion of employees are white, while whites were more likely to leave situations in which there were fewer whites. Turnover among black employees was particularly rapid when more of their workers were white or Asian. Both black and Hispanic employees preferred working with each other, over white or Asian co-workers.

“The Effect of Diversity on Turnover: A large Case Study”, which discusses the study’s findings in greater detail, can be found in the July issue of the journal Industrial and Labor Relations Review.

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