Research: The Cost of a Single US Immigration Restriction

Noteworthy analysis although may be correlation as much as causation:

On June 22, 2020, President Trump issued an executive order(EO) significantly reducing the number of people eligible for non-immigrant work visas, arguing that due to high domestic unemployment during the pandemic, “the entry…of certain aliens as immigrants and nonimmigrants would be detrimental to the interests of the United States.” This new restriction barred nearly 200,000 highly-skilled international workers — many of whomhold advanced degrees in STEM fields, and on whom U.S. companies rely to fill key talent gaps — from entering the U.S.

As researchers who study immigration and geographic mobility, were interested in examining the immediate impact of this EO on business. To that end, we conducted a study in which we tracked changes in stock price for all publicly traded Fortune 500 companies in the U.S. (a total of 471 firms) in the aftermath of the EO. We found that immediately after the new policy was announced, these companies’ market valuations dropped by about 0.45% — representing a total loss of around $100 billion. Moreover, these companies’ stock prices remained below their pre-EO levels for at least 10 days after the announcement, suggesting that the losses we’d identified represented a significant impact, not a temporary blip.

In addition, our research also found that this negative impact was much more pronounced for the 295 firms that had maintained or increased their reliance on foreign workers during the years prior to the EO (as measured by growth in each firm’s Labor Condition Application requests, a proxy for companies’ reliance on H-1B visa employees). Specifically, these companies experienced a drop in market valuation of 0.5-0.6%, while the companies whose reliance on foreign workers had decreased in recent years experienced a valuation drop of only 0.3% — meaning firms that relied more on foreign employees took almost twice as great a hit in the wake of the announcement. This suggests that the reductions in valuation we measured were in fact caused by the EO, rather than by other, unrelated economic disruptions (since other disruptions, such as the impact of the pandemic or political uncertainty, would presumably have affected all firms equally regardless of their reliance on foreign workers).

Our study was limited to the immediate aftermath of the EO, but our finding fits into a larger body of research suggesting that immigration restrictions can harm the U.S. economy in myriad ways. For example, one study reported that when firms hire fewer highly skilled immigrant workers, it actually leads them to hire fewer skilled workers overall, including both international and domestic employees. In addition, a comprehensive report from the National Academies of Sciences, Engineering, and Medicine found in 2016 that “there is little evidence that immigration significantly affects the overall employment levels of native-born workers.” The report went on to describe the value of immigrant labor in no uncertain terms, stating:

“The infusion by high-skilled immigration of human capital … has boosted the nation’s capacity for innovation and technological change. The contribution of immigrants to human and physical capital formation, entrepreneurship, and innovation are essential to long-run sustained economic growth. Innovation carried out by immigrants also has the potential to increase the productivity of natives, very likely raising economic growth per capita. In short, the prospects for long-run economic growth in the United States would be considerably dimmed without the contributions of high-skilled immigrants.”

The list of research-backed downsides to restricting immigration goes on and on. Studies have shown that policies restricting U.S. firms’ ability to hire global talent for highly skilled positions can have a long-term, negative impact on those companies’ profits, productivity, innovation, and growth. There is also robust evidence suggesting that when multinational firms are unable to hire immigrant talent for their U.S. offices, they often resort to offshoring their activities to other nations, ultimately reducing their domestic hiring rates. Another study, conducted by one of us (Prithwiraj Choudhury) and Do Yoon Kim, documented the role of skilled immigrant workers in transferring novel ideas from their home countries to the U.S. The study found that teams with both immigrant and domestic employees benefited from combining their diverse ideas, exhibiting greater levels of innovation than teams without immigrant members.

Yet another study, conducted by two of us (Prithwiraj Choudhury and Dany Bahar) as well as Hillel Rapoport, examined the impact of immigration on a country’s technological innovation, finding that countries with more immigrants who filed patents in a given specialization were significantly more likely to become globally competitive in that specialization. This suggests that the Trump administration’s restriction on the immigration of highly skilled workers could have a lasting negative impact on America’s global competitiveness, significantly reducing productivity and innovation and impeding the country’s post-pandemic economic recovery.

Especially in the midst of an economic crisis, the research clearly suggests that policymakers looking to support the American people should focus on easing — not increasing — human capital restrictions on businesses. Our study has shown that limiting firms’ ability to hire top global talent has an immediate negative impact on their valuations, adding yet another data point to the growing body of evidence demonstrating that restricting immigration to the U.S. harms the country’s economy and its citizens. We hope that these findings can inform the ongoing policy debate, and that they can inspire the incoming Biden administration to take a more productive approach to immigration policy in the months and years to come.

Source: Research: The Cost of a Single US Immigration Restriction

Creating Space for Religious Diversity at Work

Interesting and useful case study, highlighting a strategy of “cultivating ambiguity” and creating space for employees to maintain personal balance between work and religious observation:

We tend to think of business as a secular activity, and workplaces as inappropriate settings for conversations about religious faith or observance. However, given the growing popularity of bringing one’s whole self to work, the trend towards practices such as yoga and mindfulness, and the fact that more than 80% of the world claims some sort of religious affiliation, leaders are increasingly concerned about how best to handle expressions of faith by their employees.

For many religious people, their faith is associated with deeply held values that inform their actions and behaviors at work as well as in their personal lives. In workplaces where employees feel comfortable talking about their religious beliefs, everyone can gain a richer understanding of their colleagues’ personal motivations and of the varied values at play in their organizations.

However, there are complications that come with this openness. Once the range of beliefs of a diverse workforce become more public, employees may disagree with each other about them. Expressions of belief may also conflict with the requirements of the business, forcing employers to walk a fine line between non-discrimination on religious grounds, service to the customer, and fair treatment of all employees.

These concerns are compounded in organizations that are explicitly religious (such as the Salvation Army) and in others whose founders’ religious principles inform the company’s values and practices (such as Chick-fil-A). While some employees share the beliefs at the heart of these organizations, those that do not can feel excluded or discriminated against.

At either type of organization, certain religious beliefs may dictate that employees dress a certain way or avoid eating certain foods, working on holy days, or serving certain types of customer. Pitting these tenets against the demands of business creates tension in the organization, often with negative ramifications. Conflicts over religious dress have resulted in lawsuits, causing people to leave or be fired, damaging the organization’s reputation and making it more difficult to attract or retain staff and customers. At a personal level, people can break under the strain of the conflict: delivering products or engaging in practices they don’t believe in makes them lose confidence in the organization and can become demotivated or quit altogether.

But we believe that actively accommodating highly diverse beliefs and practices within an organization is possible. Specifically, we have seen that a business’s values, customers’ values, and employees’ religious values can coexist even when on the surface they may seem pitted against each other. To explore what this might look like, we conducted a 24-month ethnographic study of the opening of KT Bank, the first Islamic bank in Germany.

The incompatibility of Islamic teaching with much of conventional Western banking practice makes the potential conflicts in this case particularly intense. Islamic banking explicitly bans the payment of interest and also prohibits the kind of speculation and risk trading that is found in conventional derivatives. The bank’s leaders, however — comprising Muslims, members of other faiths, and people without strong religious convictions — adopted a deliberately vague and flexible approach that allows them to accommodate divergent beliefs while maintaining unity.

We found that two deliberate practices involving both leaders and employees can help create what we call an elastic hybrid: an organization that can embrace different and potentially even opposing views, allowing all stakeholders to navigate competing commitments in line with their own convictions and helping the organization to find unity in diversity.

Cultivate Ambiguity

We’re used to hearing calls for ever more clarity from our leaders: precision about their message and the ability to align people behind a single, powerful vision or purpose. But to create an elastic hybrid organization, leaders must instead cultivate vagueness around how the organization’s purpose relates to religious practice.

At KT Bank, leaders deliberately obscured the way that the bank balanced its religious and commercial ambitions. The imagery on calendars or products used subtle religious symbols. People versed in Islam would recognize their religious connotation, but others could enjoy them as artistic or cultural artifacts. The most visible instance of this interpretive flexibility was KT Bank’s logo. It shows a yellow date tree on a green background. For those unfamiliar with the Islamic faith, this may evoke a sense of environmental or economic sustainability. Muslims, by contrast, would likely recognize green as the color of Islam and associate the date with divine nourishment. Campaign slogans played on double meanings that signaled religious commitments not to speculate or trade in improper goods, but could also simply be construed as a distinctive market position. For example: “Now there is a bank that does not speculate, but invests sensibly.”

The bank’s leadership was not aiming to hide anything with this vagueness, but rather to be open to being multiple things to multiple people at the same time. 

Create Space — Literally

Moving between different physical places allows employees to separate out their professional work from their religious observance. Giving them the time to do so also helps alleviate this tension.

At KT Bank, we observed how staff found ways to maintain their personal balance between market and religion by use of a prayer room. There, people could temporarily retreat from work and decompress from faith/work conflicts and anxieties in whatever way they saw fit; there were no restrictions on how the room could be used or by whom, or for which faith. Flexible work times allowed people to accommodate religious practices within the working day. Several members of staff told us that it was the first time they had a designated space for prayer at work and reported feeling “deeply content” and “grateful” for the fact that KT Bank had made space for their religious practice.

This flexible approach, which recognizes and includes diverse beliefs, allows individual staff to choose their own level of religious intensity and balance it with the demands of the organization in a dynamic way. For example, at times they may choose to subordinate their religious concerns and prioritize what the company needs them to do. At other times it may be appropriate to question company practices when they seem incompatible with their personal values. A company that is open to the latter may benefit from employees’ increased willingness to do the former. And as it develops through the interplay between the leaders’ making space and the employees’ taking space, the organization is able to bend, but not to break.

This is a new area of research and more work is needed to understand successful ways that organizations have handled different kinds of conflicts between value systems and religious practice. But from what we’ve seen, in a world of volatility, uncertainty, complexity, ambiguity, and paradox, it may be advantageous for an organization to mirror the characteristics demonstrated by KT Bank. A perfectly aligned organization with clarity and focus at every level may not be as adaptable as organizations that make room for, and even celebrate, ambiguity.

Source: Creating Space for Religious Diversity at Work

The latest hiring taboo: class

Linda Nazareth on class bias in hiring decisions, citing a HBR blind cv study:

We love stories of rags to riches, and rightly so.

In North America, we adore hearing about the scholarship student becoming a CEO, or of the person who immigrates with a few dollars to his name then ends up a mega-success. We are all about income mobility, and are happy to talk about it. What we do not talk about is “class,” maybe because it is a so distasteful a topic as to be taboo. And yet, class diversity exists and arguably should be a consideration in building a balanced and effective workplace, and by extension a productive economy.

The issue of “class migrants” was bravely taken on by researchers Joan Williams, Marina Multhaup and Sky Mihaylo in a recent piece in the Harvard Business Review. Making the argument that those who started out in what they call “working class” backgrounds bring unique skills to the workplace, the authors assert that savvy companies should actively seek out those from diverse income backgrounds, or at least stop discriminating against them.

But wait, goes the argument, no one is likely to ditch a résumé from someone who started out with humble beginnings, because no one would know that they did, right? It is not like ignoring every applicant with a female-sounding name, for example. And while it is true that economic discrimination may not be as easy as ditching everyone named Jill in favour of all the Jacks, it tends to happen even if those who are discriminating do not realize it.

In a study done by researchers Lauren River and Adras Tilscik, fictitious résumés were sent to 316 offices at law firms across the United States, ostensibly from students looking for summer positions. All listed hobbies, although some were “upper class” (sailing, polo and classical music) while others were”‘lower class” (pick-up soccer, track and field and country music). The result? Sixteen per cent of the first group got a callback, compared to 1 per cent of the second.

The managers at the law firms may not have gone as far as thinking that they did not want to hang with the kind of people who ran track, but more that they felt that the polo players would be a good fit with their firms. In economics, this is known as the “signalling” hypothesis, whereby some characteristics are considered signals of other qualities even if the characteristics themselves are not being sought (unless there are billable hours for polo, which there might be).

From a job-seeker’s perspective, the best advice seems to be to just leave your hobbies off your résumé, or at least to lie about what they are (which is to say, if you like Lady Antebellum, for goodness sake keep it to yourself). Or, if you did not grow up with the right bona fides, do as legions of women have been told and just learn to play golf and talk about it as much as you can if you want to succeed in the corporate sphere.

The thing is, this is not just a job-seeker’s problem, but a company’s problem as well. For firms looking for the best talent, limiting the pool in any way seems kind of foolhardy. Leadership qualities are often correlated with having transcended income levels (one study of those in the U.S. Army, for example, found that class migrants were the most effective leaders). If you are trying to build the best workforce, you want to have access to the best workers, so figuring out how to attract those from a wide swathe of economic backgrounds should arguably be part of any policy on diversity.

In their Harvard Business Review article, the researchers assert that to do this you have to do more than just go to the top schools and look for diverse candidates when bringing in entry-level candidates, you have to actually look at schools that might not be considered top-tier: a top student from one of those schools could be a much better hire than an average one from the usual choices. Perhaps more controversially, they also suggest going easy on referral hiring (which many find an effective way to get good candidates) since the friends and relatives of employees are likely to give you more of the same in terms of economic characteristics.

Looking at this from a wider perspective, we are not exactly serving the wider economy by making it difficult for people to be accepted and assimilate into the workforce in a way that makes the best use of their talents. We have long talked about the barriers that stop some from making their way through high school and getting into postsecondary institutions. More recently, there has been a recognition that those who come from a background where acquiring a postsecondary education is unusual are much more likely to drop out without finishing than those where it is the norm. In both cases, there has been a recognition that fully engaging people helps them, but also helps create a better labour force and a stronger economy.

And so perhaps we need to take it one step further and talk about the last thing we want to talk about.

Source: Linda Nazareth

People Suffer at Work When They Can’t Discuss the Racial Bias They Face Outside of It

Interesting HBR-published study on the racial bias link between the outside and work environments by Sylvia Ann Hewlett, Melinda Marshall and Trudy Bourgeois:

Last month, in an unprecedented show of solidarity, 150 CEOs from the world’s leading companies banded together to advance diversity and inclusion in the workplace and, through an online platform, shared best practices for doing so. To drive home the urgency, the coalition’s website, CEOAction.com, directs visitors to research showing that diverse teams and inclusive leaders unleash innovation, eradicate groupthink, and spur market growth. But as Tim Ryan, U.S. Chair and senior partner at PwC and one of the organizers of the coalition, explains, what galvanized the group was widespread recognition that “we are living in a world of complex divisions and tensions that can have a significant impact on our work environment” — and they need to be openly addressed.

At the Center for Talent Innovation, we wanted to look into these suspicions. Do the political, racial, and social experiences that divide us outside of work undermine our contributions on the job? Our nationwide survey of 3,570 white-collar professionals(374 black, 2,258 white, 393 Asian, and 395 Hispanic) paints an unsettling landscape: For black, Asian, and Hispanic professionals, race-based discrimination is rampant outside the workplace. Black individuals are especially struggling, as fully 78% of black professionals say they’ve experienced discrimination or fear that they or their loved ones will — nearly three times as many as white professionals.

But 38% of black professionals also feel that it is never acceptable at their companies to speak out about their experiences of bias — a silence that makes them more than twice as vulnerable to feelings of isolation and alienation in the workplace. Black employees who feel muzzled are nearly three times as likely as those who don’t to have one foot out the door, and they’re 13 times as likely to be disengaged.

W170626_HEWLETT_WHATHAPPENS

 

The response, at most organizations, is no response. Leaders don’t inquire about coworkers’ life experiences; they stay quiet when headlines blare reports of racial violence or videos capture acts of blatant discrimination. Their silence is often born of a conviction that race, like politics, is best discussed elsewhere.

But as evidenced by the formation of the coalition and the initiatives we captured in our report, that attitude is shifting. Conscious that breaking the silence begins with their own example, captains of industry are talking about race, both internally with their employees and externally with the public. After a spate of shootings of unarmed black men last summer, Ryan initiated a series of discussion days to ensure that all employees at PwC better understood the experiences of their black colleagues. Michael Roth, CEO of Interpublic Group, issued an enterprise-wide email imploring coworkers to “connect, affirm our commitment to one another, and acknowledge the pain being felt in so many of our communities.” Bernard Tyson, CEO of Kaiser Permanente, published an essay in which, in a plea for empathy, he shared his own experiences of discrimination. And in an emotional recounting of his black friend’s experience outside the office that went viral on YouTube, AT&T chairman Randall Stephenson encouraged employees to get to know each other better.

Leaders who display this kind of courage don’t always see immediate rewards, but in the long term, our research suggests that the payoff could be extraordinary. Of those who are aware of companies responding to societal incidents of racial discrimination, robust majorities of black (77%), white (65%), Hispanic (67%), and Asian (83%) professionals say they view those companies in a more positive way. Interviews with employees at firms like Ernst & Young point to stronger bonds forged between team leaders and members as a result of guidelines disseminated to managers on how to have a trust-building conversation. Town halls at New York Life with members of the C-suite and black executives have likewise paved pathways for greater understanding across racial and political divides.

Source: People Suffer at Work When They Can’t Discuss the Racial Bias They Face Outside of It

We Just Can’t Handle Diversity: HBR

We_Just_Can’t_Handle_DiversityGood long read by Lisa Burrell at HBR and the difficulties in ensuring diversity given our implicit biases and automatic thinking:

Senior leaders need to recognize their organizations’ inequities—probably more than anyone else, since they have the power to make changes. But once they’ve climbed to their positions, they usually lose sight of what they had to overcome to get there. As a result, Rosette and Tost find, “they lack the motivation and perspective to actively consider the advantages that dominant-group members experience.” This is especially true of successful white women, who “reported [even] lower perceptions of White privilege than did highly successful White men.” It’s fascinating that their encounters with sexism don’t help them identify racial advantage after they’ve gotten ahead. Perhaps, the authors suggest, their hard-earned status feels so tenuous that they reflexively tighten their grip.

Beyond murkily defined concepts and somewhat defensive motivations, we have an even-higher-level conceptual obstacle to overcome: our bias against diversity itself. Recent research by Ohio State University’s Robert Lount Jr. and colleagues (Oliver Sheldon, of Rutgers; Floor Rink, of Groningen; and Katherine Phillips, of Columbia) shows that we assume diversity will spark interpersonal conflict. Participants in a series of experiments all read, watched, or listened to the exact same conversations among various groups. They consistently perceived the all-black or all-white groups as more harmonious than those with a combination of blacks and whites.

If we expect people to behave less constructively when they’re in diverse organizations or teams, how do we interpret and reward their actual performance? Under the influence of those flawed expectations? Quite possibly.

So, Is It Hopeless?

According to the renowned behavioral economist Daniel Kahneman, trying to outsmart bias at the individual level is a bit of a fool’s errand, even with training. We are fundamentally overconfident, he says, so we make quick interpretations and automatic judgments. But organizations think and move much more slowly. They actually stand a chance of improving decision making.

Research by John Beshears and Francesca Gino, of Harvard Business School, supports that line of thought. As they have written in HBR, “It’s extraordinarily difficult to rewire the human brain,” but we can “alter the environment in which decisions are made.” This approach—known as choice architecture—involves mitigating biases, not reversing them, and Beshears and Gino have found that it can lead to better outcomes in a wide range of situations. The idea is to deliberately structure how you present information and options: You don’t take away individuals’ right to decide or tell them what they should do. You just make it easier for them to reach more-rational decisions. (For more on this idea, also see “Designing a Bias-Free Organization,” an interview with Harvard behavioral economist Iris Bohnet.)

There’s still an element of manipulation here: The organization sets the stage for certain kinds of choices. But that brings us back to what most of us can agree on, at least in the abstract: Diversity improves performance, and people who apply themselves and do good work should be treated fairly.

If the members of an organization could get behind those broad ideas, would it bother them that they were being nudged to do what they wanted to do anyway? It might—and that would be another cognitive roadblock to clear.

Source: We Just Can’t Handle Diversity

Interesting that the recent public service discussions on diversity, judging by reports I have seen, show no evidence of this deeper thinking of the challenges involved (even if, judging by the numbers, the public service is reasonably diverse – see Diversity and Inclusion Agenda: Impact on the Public Service, Setting the baseline).

When making a presentation on multiculturalism and the government’s inclusion and diversity agenda this week at Canadian Heritage, my assigned ‘homework’ for attendees was to take the Harvard-developed Implicit Association Test to be more mindful of their internal biases and prejudices. It certainly was revealing to me, as it has been to those I know who have taken it:

Public Servants Get Real About Diversity in the Public Service

Adapt to a New Culture – but Don’t Go Too Far – Harvard Business Review

Good piece on the intricacies and challenges with cultural adaptation. I think mentoring, either formal or informal, can be particularly beneficial:

Individuals need to take steps to avoid over-switching and decrease the likelihood that it will interfere with their success abroad. One essential strategy is to develop a detailed sense of the “cultural code” — the correct and appropriate interpersonal style — for whatever key situations you’re working in. How assertively are you expected to act in your role in this setting? How directly are you expected to communicate, and with how much emotional expressiveness?

Of course, the rules for how to behave are not the same in all situations you encounter in a foreign culture. Taking Cheng’s case as our example, some work cultures are extremely informal with very high expectations for assertiveness on the part of employees. Others are much less so. Some bosses also have styles that are more or less conducive to the behavior that Cheng exhibited in this situation. The overall goal is not to just learn how the new culture is different from yours. It’s to calibrate the specific level of difference and to learn how to acclimate your behavior to that particular level.

But even if you do work hard at mastering the cultural code, mistakes are still inevitable. You must also find ways to mitigate the brunt of these inevitable faux pas. Do what you can to develop a sense of rapport or, when possible, a relationship with the person you’re interacting with. Express genuine interest in the new culture and bond over areas of mutual interest, such as sports or family. And in certain cases, if the relationship allows, see if the other person might even be able to mentor you about cultural differences and the appropriate level of accommodation.

Over-switching is a natural part of the adaptation process. The trick isn’t to make it go away; it’s to try your best to convert these inevitable errors into valuable learning opportunities.

Adapt to a New Culture – but Don’t Go Too Far – Andy Molinsky – Harvard Business Review.