It’s well established that immigrants benefit organizations, not least because they improve the thought diversity of teams. This is aptly illustrated in a recent paper from the University of Konstanz, which shows that immigrants improve the productivity of the teams they’re a part of.
“Are you afraid of how the influence of migrants in blue collar team might impact group productivity? This is an understandable fear, but it doesn’t mean that productivity will decrease. It can actually increase,” the authors explain. “In blue-collar settings, you have to pay attention to the differences, and companies, unfortunately, do not invest as much in blue-collar workers. What companies should do is, first, find a good balance between immigrants and non-immigrants, and second, invest in people and in relationships among team members.”
Productivity gains
The authors explain how the United States admits around a million immigrants per year, but even that is dwarfed by Germany, which admits around twice that number. In most developed countries, migrants make up a significant proportion of the working population, with migrants around 20% of the North American workforce and almost the same in most of Europe.
The study looked at how immigrants affect productivity in a large Swiss logistics company, analyzing 10,777 workers in 629 teams handling postal delivery. Around 64% of the teams included at least one immigrant, while the rest were made up only of Swiss nationals.
Switzerland is an interesting case for studying migration. It has the highest percentage of foreign-born residents in Europe (29%), but strict rules for becoming a citizen. Citizenship isn’t granted automatically to those born in Switzerland to foreign parents. Instead, immigrants must live in the country for at least 10 years and meet various requirements, such as speaking the language, being employed, and integrating into Swiss society. Because of this, Switzerland’s naturalization rate has stayed low—about 2% over the last decade.
Understanding the impact
Switzerland’s unique immigration rules might limit how widely the study’s findings apply, but its large foreign-born population makes it a good place to test ideas about migration’s impact on productivity. The study found that team productivity increases as the share of immigrants rises, peaking when 38% of the team are immigrants. Beyond that point, productivity starts to drop.
Newer employees showed the largest productivity boosts with low levels of immigrants, but the 38% sweet spot remained the same no matter how long workers had been at the company. The gender balance of the team or whether a migrant led the team didn’t affect the results either. The nationality of the immigrants, though, did matter. Productivity was highest in teams with immigrants from wealthier countries.
The authors stressed that these results shouldn’t discourage companies from hiring migrants from less affluent countries. If the drop in productivity is tied to native workers feeling threatened by a loss of status, companies could address this by promoting the benefits of diversity, which has been shown to reduce tension between groups.
Although immigrants accounted for just 3% of the overall productivity increase, this translated to significant financial gains—78.5 million Swiss francs for a company with revenue of 2.6 billion and profits of 370 million in the year of the study. However, the study shows that simply hiring more immigrants won’t always boost productivity. This is especially true for companies with aggressive cost-cutting strategies that see immigrants as cheaper labor. The 38% peak suggests that teams with too many immigrants, or those split evenly between immigrants and natives, may not perform as well as teams that strike a better balance.
In short, team composition matters. The best results come when there’s a balanced mix of immigrants and natives, rather than skewing too heavily in either direction.
