With a surge in violent conflicts in the last decade, we are living at historically high levels of forced displacement worldwide, with 79.5 million people forcibly displaced around the globe in 2019 – almost 1% of the world’s total population (UNHCR; 2020). This is leading to a protracted displacement situation, one in which refugees have been displaced for an average of 10 years. If chronical problems such as the growing displacement issues are to be fixed, they require investments that bring sustained economic growth and job creation – but humanitarian issues are often considered to be separate from issues of economic development (Maresca; 2006).
Additionally, the international community – mostly represented by the United Nations (UN) and its agencies – is recognizing the need to fill in their lowered resources and institutional capacities to deal with the increasing mandate and challenges. Thus, new forms of public-private partnerships in humanitarian causes are expanding and becoming institutionalised, and initiatives like the Business Action Pledge in Response to the Refugee Crisis and the Global Compact on Refugees, which are based on voluntary commitments, served as means to increase the involvement of the private sector in the global refugee crisis.
At the same time, local integration, one of the three durable solutions suggested by the UN Refugee Agency (UNHCR), is becoming an increasingly important solution to increase refugee’s self-reliance. However, little emphasis is given to the role that the private sector can play as a crucial instrument to enable, facilitate and improve their access to the labour market. A pattern that is also reflected in the literature on business humanitarian action, in which research on the contribution of the private sector in humanitarian crises is practically non-existent (Van den Broek; 2016), especially in debates about migration and refuge – despite configuring relevant stakeholders to the topic.
Local integration begins with the provision of legal status or naturalization. It is a dynamic and two-way process, in which refugees must be prepared to adapt while “to effectively integrate refugees, institutions at national and local levels, as well as local communities and civil society, should proactively foster social cohesion and ensure refugees can access the job market (UNHCR; 2020, p. 53)”. Therefore, work is a fundamental condition to the local integration of refugees. However, this type of durable solution remains challenging, and refugees make up for one of the most vulnerable workforce as they have lower employment rates in comparison to the native-born population (Ibid).
In order to better comprehend the role and the contribution of the private sector in the job market integration of refugees – so they have better means to integrate locally – it is important to conceptualize what constitutes it. The labour market can be understood as the interplay between labour supply, labour demand and the matching-process, i.e., the institutions facilitating matches between supply and demand. All of these areas can provide barriers to integration, and should be accounted for, especially in relation to ‘vulnerable’ or ‘disadvantaged’ groups (Bredgaard and Thomsen, 2018, p. 8).
The supply-side accounts for the capacity and ability of refugees to integrate to the labour market, such as language skills, education level, mental and physical abilities, work experience and motivation. The demand-side represents the employer’s perspective, selection and hiring practices, as well as incentives to recruit refugees, and may also impose barriers for refugees to integrate to the labour market. Finally, the matching-process, whose aim is to match labour supply (jobseekers) and labour demand (employers), is mostly represented by the public employment service (Ibid; pp. 9 -12).
In an attempt to further explore the topic and fill this gap, this article conducts a qualitative research analysis, focusing on identifying the strategies that may explain private sector engagement in the labour market integration of refugees and asylum seekers in host societies. We find that there are four main strategies that motivate businesses to engage in the cause, which are: (1) fulfilling the corporate social responsibility (CSR), (2) direct financial and economic incentives, (3) civil society involvement and initiatives, and (4) expected private benefits.
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Fulfilling the corporate social responsibility
With the increasing diffusion and institutionalization of corporate social responsibility at local and global levels, companies found out that fulfilling one’s CSR is an important motive for engagement. In a research conducted by the Organization for Economic Co-operation and Development (OECD; 2017, pp.34-35), 80% of employers surveyed stated that they hired refugees for various jobs positions at least in part due to social responsibility. This is especially true for German companies, that hired between 3,800 and 7,000 asylum seekers in the period 2015 – 2017. Even though most of these positions were considered low-skilled (two out of three regular jobs), employers saw an opportunity for future employment vacancies to be filled in medium and high-skilled positions (50% and 15% of employers, respectively) (Ibid, 34.). Danish employers also participate in active labour market policies (ALMPs) fostered by the Danish government, but, comparatively to companies from Germany, mostly look for skilled labour, whereas the latter are motivated by cheap manpower.
Van den Broek (2016; p. 25) stresses that CSR issues are deeply embedded in the practices and expectations of companies of German origin, even though not explicitly. In the market culture, there is an implicit consensus that they should contribute to the common good when they are capable of, a characteristic that could be attributed to the German corporatism tradition. One of the most interesting findings of her research is that there is a strong correlation between a company’s participation in the UNGC, and it’s acting in response to the refugee crisis (Ibid, pp. 26-27). Hence, we can observe that, for the biggest German companies, abiding to CSR practices and advancing societal roles in conjunction with UN-values is (at least in apparently) important for them.
If we analyze more closely the initiatives fostered by the private sector, we can observe engagement in various areas. Almost 63% of those companies that responded to the refugee crisis in Germany did so through their human resources, which consists in offering internships, apprenticeships, traineeships or connecting refugees to the job market. However, offering regular jobs is less frequent (14%). These practices were often combined with education and training, focused on developing working skills, language acquiring and intercultural skills.
Yet another example of a human resource strategy, mentoring and advising occur less frequently (11%) and is aimed at facilitating refugee’s integration into the German society and labour market. Finally, an expressive portion of employers (49%) acted through connections and collaborations, activities such as “integrating refugees in society and in the workspace, enhancing tolerance and respect between various groups, advocating for the[ir] rights (…), connecting [them] online and connecting various initiatives that support [them] (Van den Broek; 2016, pp. 28-33)”.
Most of these practices have been enabled via partnerships through their own private foundations, with government institutions or employer’s associations (Ibid, 33.; OECD, 2017, p. 62). For example, the ‘Business integrate refugees’ initiative has 1,200 members and “offers information on legal questions and a platform to exchange experiences and good practices” (OECD, 2017, p. 62), besides guidance on diversity management and intercultural communication (OECD and UNHCR, 2018, p. 31).
Notwithstanding, they mostly partner with other companies, with the ‘We Together’ (Wir Zusamen) initiative being one of the most representatives. Founded in 2016, this platform gives oversight on the various projects that companies have set up in response to the refugee crisis in Germany, encouraging each other to take action and offer opportunities for refugees to become more self-reliant (Van den Broek; 2016, p. 33).
Direct financial and economic incentives
It is agreed that the primary responsibility to maintain peace within national borders rests with governments. However, the rising influx of displaced populations and, consequently, the need to integrate them locally has made it harder for public entities to keep the balance within their territory. Additionally, the private sector plays a crucial role in enabling and facilitating refugees to be integrated into the host society, especially into the labour market.
In this regard, public incentives have played an important part in this process. Many governments in OECD countries have created programs in which business enterprises are financially rewarded when hiring asylum seekers and refugees (to various types of job positions), as a mean to facilitate their entrance in the local job market. Therefore, direct financial and economic incentives have also been strong motives for business enterprises to engage in labour market integration of refugees. Mostly used by Scandinavian and OECD countries, such as Denmark, Norway and Sweden, this strategy is less common in Latin American countries.
Sweden, the ninth country to receive the largest number of new asylum-seekers in the last decade and fourth in the European Union (UNHCR, 2020b, P.40, 75), has a strong policy involving the private sector in response to this influx. The “100 Club” initiative is sponsored by the Government Office of Sweden and aims to provide tailored solutions to companies committed to hiring at least 100 newcomers during a period of three years. Special package solutions, including placement services and wage subsidies, individually tailored to the needs of individual companies, are offered by the public employment services (OECD and UNHCR; 2018, p. 31).
Denmark has recently been through a revision of its integration programs for refugees and family migrants, with a huge emphasis on improving their employment opportunities. Going through a ‘paradigm shift’, the new integration policies framework was implemented in 2016. One of the biggest accomplishments of the revision was a change in the employer’s role from implicit and passive receiver to explicit and active target of government policies and programs. In other words, the new premise was to persuade employers to recruit refugees through economic incentives and public campaigns.
Besides these direct economic incentives, the new Danish integration framework for refugees includes combined language and workplace training, which consists in “work experience programs in local workplaces (virksomhedspraktik) (…) where the employer does not pay any wages and participants are not covered by collective agreements (Bredgaard & Thomsen; 2018, p. 19)”. These new work experience programs have increased more than six times in number of participants (from 300 to 1,900) after their implementation.
In contrast to Scandinavian OECD countries, Germany does not have long-term individualized integration programs. “Instead, there are a series of separate measures in place, some of them adjusted to the specific needs of migrants, such as illiterate or young migrants (OECD; 2017, p. 54)”. Special traineeships for young people – including asylum-seekers – in specific occupational fields (similar to apprenticeships) are paid around EUR 200 per month, while the employer receives a lump sum of around half this amount for social security contributions (Ibid, 55.).
Other labour market integration measures (such as the ‘Integration Measures for Refugees’ Flüchtlingsintegrationsmaßnahmen) aim at upskilling and increasing the chances of asylum seekers and refugees of entering the local job market, but they are mostly coordinated by municipalities and other government agencies, as for example charities (Ibid, 56-57.), and the private sector is a more passive agent.
Civil society, involvement and initiatives
In the same study promoted by the OECD (2017, p. 35), more than 40% of the companies surveyed that hired asylum seekers or refugees did so through the involvement of civil society initiatives, at least partially. Besides non-governmental organizations (NGOs), the private sector also partners-up with academia, universities, schools and educational centers, multilateral organizations such as UN agencies, as well as refugees and artists, even though more sporadically.
In Latin American countries, where integration programs for refugees tend to involve less use of financial and economic incentives to engage the private sector in the case because of the distinct socio-economic arrangements in comparison to OECD countries, civil society initiatives play a crucial part. This is especially represented by organizations such as NGOs and multilateral agencies. Either government-funded or not, initiatives such as platforms that connect refugees to employers, shares experiences, materials and job opportunities are growing in importance and number, especially in Brazil.
The ‘Businesses with Refugees’ (Empresas com Refugiados), initiative launched by the Brazilian branch of United Nation Global Compact (UNGC) in partnership with the UNHCR in April 2019, is a very significant national initiative aiming to encourage the private sector to contribute to the local integration of refugees. This initiative aims to share corporate practices among participants, provide relevant information (support material and relevant studies) and orientation to support companies in the process of hiring refugees and asylum seekers. In their website they provide guidebooks with information about employment statistics, socio-economic data, labour market conditions and benefits of having a refugee as an employee.
In addition to that, the platform provides information on recruitment agencies and NGOs that employers can work with in advertising their job offers. It also makes a reference to the government program ‘interiorization based on job offer’. As of the end of July, 2020, there were 26 practices registered in the platform from businesses of various areas and sizes, with the majority coming from big companies such as Airbnb, Santander Bank Brazil, Consul, Sodexo and Manpower Group.
Related to the ‘Businesses with Refugees’, the ‘Empowering Female Refugees’ (Empoderando Refugiadas) project was born from a partnership between the UNGC, the UNHCR and the UN Women and targets female asylum seekers and refugees. With support from the private sector – whose companies are ABM AMRO, Carrefour, British Council, Facebook, MRV, Renner and Sodexo – it has two main focus areas: (1) professional training, cultural integration and facilitating the access of refugee women to the Brazilian labour market, and (2) engagement of companies and organizations in hiring migrants in situations of refuge.
Another initiative promoted in partnership with the UNHCR, the ‘Support Program for Refugee Relocation’ (Programa de Apoio para a Recolocação dos Refugiados, PARR) is a platform that connects refugees and companies offering jobs. Other initiatives fostered by NGOs also aim at increasing awareness of business leaders and advise them on the working rights of this population and their living situation, facilitating a match between them. Finally, organizing employment fairs is also a common initiative promoted in several locations, especially in Brazil, Germany and Austria.
Expectation of private benefits
Lastly, businesses may engage in fostering labour market integration of refugees in the expectation of obtaining private benefits. Cultural and linguistic diversity, improvement of human resources and hiring prospects, better retention rates, mitigating labour shortages, and increasing a company’s productivity and reputation, are some of the motives behind.
Several studies promoted by government entities and NGOs stress the gains that companies that hired refugees obtained in an attempt to underscore that this population should not be seen as merely passive recipients of aid, but rather empowered agents. The benefits listed vary from more indirect, like cultural and linguistic diversity, and improvement of human resources and hiring prospects, to more direct ones, such as improving retention rates, mitigating labour shortages, and increasing the company’s productivity and reputation.
When it comes to indirect gains, a more diverse team – composed by people from different backgrounds and qualifications – can enhance a business’ competitivity at the international level. Hiring refugees and asylum seekers can position the company as a follower of the international norm ISO 2600023 and its CSR recommendations, especially in relation to the principles and values of respect and non-discrimination. Consequently, this could positively influence a company’s recruiting and hiring prospects, as not only consumers but also employees are increasingly looking to engage with companies that demonstrate these values.
When it comes to more tangible gains that companies can avail from when hiring refugees, a survey promoted by Kallick and Roldan (2018, p. 9) pointed out that 73% of employers that hired refugees reported higher retention rates for this group, in comparison to other employees. With smaller turnover rates, this reflected in cost savings.
From a labour market perspective, it is harder to retain local workers in some job positions due to various reasons (TENT and Missão Paz, 2020, p. 19). In addition, the OECD study (2017, p. 35) pointed out that 45% of German employers expected current or future labour shortages. Therefore, refugees become an option in both scenarios. Besides having elevated linguistic capital, the refugee population has a higher educational level than the average Brazilian (34.4% of refugees had completed Higher Education, in comparison to only 15.7% of the Brazilian population) (TENT and Missão Paz, 2020, p.18).
Hiring refugees can also rise the company’s productivity levels. Studies indicate that immigrants, including refugees, can increase productivity by offering complementary skills. Moreover, it can have a positive impact in the company’s reputation, and, ultimately, in its brand value. This happens because it demonstrates that the company not only respects and supports the cause but is in fact committed to the premises of human rights (Ibid, p.19) and CSR. “This factor can be attractive for both employees and customers or consumers, who increasingly demand companies to have positive impacts on the society in which they operate in (Ibid)”.
Notwithstanding, when evaluating more closely how businesses have engaged in the process of hiring or supporting refugees to access the local labour market, we can observe a wide variety of actions, that vary from low to high-strategic operational impact. Even though most companies engaged with human resources strategies and hired refugees (considered high corporate social responsibility strategy), they were not commonly hired for regular positions (an average of only 40% in German companies (OECD; 2017, p.34). Thus, engagement with the refugee cause is not yet in the companies’ core business.
Despite the surge in initiatives, private sector engagement in the local integration of refugees and asylum seekers still has room for a bigger strategic, operational and scale impact. This is especially true in the Latin American continent, which does not have explicit ALMPs targeting refugees and asylum seekers nor economic incentives in this regard. If we apply the conceptual framework of labour market integration of Bredgaard and Thomsen (2018), the private sector could play a bigger role in all three compound areas of labour market (demand-side, supply-side, and matching), with the demand-side being the one which it can have the highest impact. The means to do so, however, must be reconsidered and redesigned so that the benefits that the private sector acquire do not overweight those destined to the ones whom they are willing to protect – the most vulnerable and the agency representing them.
Van den Broek, O. M. (2016). Private Decisions, Public Results: The Legitimacy of German Business Action in Response to the Refugee Crisis (Master thesis). Utrecht University, Utrecht.