Economic Outlook - January 2004

Employers profit when Hispanics feel at home

Alan Shao, professor of marketing and international business at UNC Charlotte, and some of his MBA students studied the benefits of making Hispanic workers feel more comfortable in the workplace. They focused on the Statesville plant of Trim Systems LLP, a Columbus, Ohio-based maker of interior trim and curtains for heavy-duty trucks. About 140, 45%, of the plant’s workers are Hispanic. Trim Systems placed bilingual signs in the plant and required senior managers to learn basic Spanish and attend cultural-diversity training. Monthly turnover among all workers fell from about 25% last year to about 3% this year, about the national average for manufacturing.

BNC: How did simple changes produce such dramatic results?

Shao: When you pay attention to the cultural needs of Hispanics, they respond. Bridging the language gap and establishing trust were the primary objectives at Trim Systems. If companies pay attention to the needs of their employees, they are going to stick around longer.

The jobless rate among Hispanics in the state nearly doubled in 2002. Might that have helped cut turnover in 2003?

That could have been the case. But when you look at the national unemployment rate for Hispanics, it was 7.8% in January and 7.2% in October. So the unemployment rate among Hispanics came down as the year progressed. [The U.S. Bureau of Labor Statistics does not publish statewide monthly rates for Hispanics.]

Have many North Carolina companies begun integrating Hispanics?

More and more recognize that it makes business sense. There are an estimated 400,000 Hispanics in North Carolina, about 5% of the population. North Carolina’s Hispanic population grew faster in the last decade than in any other state. They are very dedicated and usually very honest, hard-working and willing to do a lot of the unskilled labor that other residents are unwilling to do.

Does this make sense for all employers?

Actually, integrating Hispanics into the work force is not for every company. It isn’t as important for unskilled labor such as landscaping. You have a fair number of Hispanics who are not well-versed in English, so they are going to feel more comfortable using their hands rather than their voices. In manufacturing, it has been proven time and again that employing Hispanics can improve productivity. They are very loyal to companies and, if treated well, tend to stay at organizations for extended periods of time.

Other than language, what is the biggest obstacle to integrating Hispanics?

Hispanics tend to enter the workplace pretty blind. All they know is they need a paycheck. They will say they have more skills than they often times do. What often happens is companies are willing to train these people because they seem genuinely interested in learning. Once they are trained, they turn out to be very good workers. There is a cost that the employer has to bear to get through the learning process.

How do employers figure out what’s important to them?

Employers should at least survey the needs of their employees and do it in their employees’ native tongue. Let’s keep in mind that the central mindset of Hispanics is the family and to take care of each other. If the employer is asking employees what it can do to make them feel more comfortable in the work environment, that goes a long way. It really depends on whether the employer wants to keep them around. If you need someone working a rake for a day, then you’re not as concerned about longevity. If you are looking for an employee whom you can count on in years to come, you want to learn more about that employee.

What issues did you find were important to Hispanics?

Child care is important, as are legal services and banking and laundry service. We wouldn’t think laundry service is that important, but to these people it is, because they don’t always have the service as they set up households. Banking is important because Hispanics, when they get a paycheck, tend to cash them and carry around a wad of cash. That is dangerous. They also like to send money home to relatives, so they need money-transfer services.

What’s the cost of these services?

We did not come up with any solid numbers. Companies can help arrange these services by other providers. There is still an expense.

Is there a point at which it costs too much?

It depends on how big your business is. If you have 1,000 employees, is 50 employees worth it? It depends on what the jobs are. I think that whether it is 5% or 1%, companies should do what they can to meet their employees’ needs. There is a cost benefit with everything.