Voluntary turnover—that is, quitting— can hit businesses hard. Not only is there the potential for the loss of valuable institutional knowledge but also the cost of a replacement. According to data released by the Society for Human Resource Management in 2022, the estimated average cost per new hire was nearly $4,700, but some companies can spend as much as three to four times the position’s posted salary in recruitment costs.
As such, retaining employees is important, but so is understanding why they decide to leave in the first place. A new study by Adina Sterling, the Katherine W. Phillips Associate Professor of Business at Columbia Business School, found that an employee’s decision to leave can be tied to their race—and their access to resources. While previous studies suggest that racial minorities in the United States are more likely to quit due to workplace discrimination, Sterling takes a unique approach, opting to analyze how the availability of resources may lead to differences in voluntary departure.