Hiring refugees is not just 'doing a good thing': Research shows it can also help businesses

The global refugee population is more than 26 million people, according to some estimates. Such largescale movements of people affect many countries and have created significant interest among business and management researchers in recent years as companies try to work out how to successfully integrate refugees into their workforces.

Many refugees are skilled professionals and can contribute to a company's success. Companies should take steps to ensure that these new employees feel welcome, but managers should also be aware of the ways in which refugees can add even more value to their businesses.

In my role as a management scholar, I frequently encounter surprise from both friends and colleagues when I mention that my research focuses on the workplace integration of refugees. They often ask: Why should companies hire refugees?

Implicitly, these people are questioning the economic benefits to companies of employing refugees—beyond merely doing something good. My research on refugee employment in Germany (which is home to more refugees than any other high-income country at 1.2 million people) and close collaborations with practitioners in several other countries has helped me to identify how hiring refugees can also benefit companies.

This is particularly true in countries such as Canada, Germany, Japan, the UK and US, where demographic shifts and aging populations have led to labor shortages across industries. This leaves firms facing growth constraints and compromises their competitiveness. The British Chambers of Commerce has called the UK's labor shortage "a ticking time bomb."

Tackling labor shortages and skills gaps

During my research into this issue, the chief human resources officer of a German engineering company, told me during a face-to-face interview: "In recent years, we have witnessed a steady decline in applications for our vocational training program. Presently, we struggle to fill positions and anticipate the situation worsening. This has resulted in severe economic consequences, forcing us to decline orders."

To tackle this issue of labor shortages, this company developed a specialized vocational training program for refugees, to encourage them to become employees. This is only one option for companies trying fill vacant positions, whether skilled or unskilled.

And it's not just about filling vacancies. Managers that I have interviewed tell me refugees have brought a diverse range of skills, experiences and perspectives from their home countries into their businesses. This diversity fosters an innovative and creative work environment within the company.

A German baker told me that when he had problems filling a vacant position in his bakery, he decided give a refugee a job through a regional employment agency scheme. The new hire was from Pakistan and wanted to experiment with recipes from his home country. Initially hesitant, the owner eventually encouraged his new employee to do so. Some of these recipes have since become the bakery's best-selling products, according to the owner, who has also learned new techniques from his new hire.

Refugees might also maintain connections with their home countries and regions. This can provide a business with insights into the unique characteristics of foreign markets. Such knowledge can open doors to investment and expansion opportunities in those areas.