Costs of Unsuccessful Recruitment and Retention of Diverse Staff

Financial Costs

Replacing an employee is expensive. Here are some of the concrete costs that you may incur as a result of losing valuable employees: 

  • Employee hours spent recruiting including drafting position descriptions and conducting interviews.
  • Advertising costs.
  • Agency/recruiter fees.
  • Travel costs to interview applicants.
  • Relocation costs.
  • Actual dollars spent on training new employees.
  • Lost hours spent training new employees.
  • Legal fees for managing complaints due to violations of race-related employment laws.

Since not all costs can be measured in lost dollars or hours, it also is important to consider non-financial costs. Some of these costs can be significantly more harmful to an organization than the measurable costs.

Non-Financial Costs

Absenteeism and the lost productivity that comes with employees missing days of work.

Loss of experience of talented employees in whom an organization has invested significant time and who the organization cannot easily replace.

Loss of long-term employees who have valuable relationships with clients, donors, and co-workers - relationships that will take significant time for a new employee to establish.

As you think about the benefits and costs of recruiting and retaining staff within your organization, keep in mind the following two points: 

First, organizations that have typically used simple recruitment strategies can assume that they may need to invest more time and resources up front to recruit and retain a diverse staff.

However, organizations successfully recruiting and retaining diverse staff usually find that, over time, recruiting diverse staff becomes easier and more cost-effective.

The more success organizations have in recruiting and retaining diverse staff, the more that success will multiply and, over time, the organization will draw new, diverse applicants as a result of the people who already work there.

Second, hiring a diverse staff is not necessarily a cure for all inclusiveness issues. Attempting to do so without taking many of the other steps necessary to create an inclusive organization, in fact, may result in negative consequences for the organization and individuals working there.

Research has shown that, as an organization begins hiring more individuals of color, the level of attachment to the organization (i.e., absentee rates, commitment to the organization, desire to stay with the organization) can decline among some white staff members. (See Bibliography: Fagenson)

However, the cited research on this phenomenon only looks at organizations that do not explicitly attempt to create deeper inclusiveness in all aspects of their workplace.

Clearly, given the many benefits to creating a more inclusive workplace, it is better to recruit and retain a diverse workforce and engage in the other steps outlined in this website than it is to give up because some people may express some dismay with the challenges that come with recruiting and retaining a diverse staff.


Overview: Personnel 

Benefits of Recruiting and Retaining a Diverse Staff 

Setting Goals for Staff Composition 

Position Descriptions/Job Qualifications 

Announcing and Advertising Personnel Openings 

Interviewing and Selecting Candidates 

Retaining Personnel of Color 

Performance Reviews 

Professional Development 

Exit Interview Process  

Employment Policies