Impact of unconscious bias in hiring

What does unconscious bias in hiring look like?

Picture this.

You’ve gathered your company’s top executives into one big room, and you’re staring out at a sea of white, male faces. Here and there you might spot a woman or an Asian man, but they’re rarities. Your company talks about cultural diversity all the time, and because you’ve never believed you were racist or sexist, you’d personally like to see it happen. So far, however, it’s been business as usual.

That’s just the way it is,” you think to yourself. “It’s too bad we can’t find more qualified women and minorities to fill these roles. Oh well. We give the job to the most qualified people, we can’t help who applies.

Is this “pipeline problem” just a hard reality? Or is it a dangerous assumption that’s costing your company money?

Increasingly, research tells us the “pipeline problem” is a dangerous assumption that costs a lot of money.

It turns out, the applicant pool is not the problem, and you’re probably not as fair-minded as you think you are. The good news? It’s not your fault.

The culprit is “unconscious bias,” and it’s costly enough to make the Fortune 500 sit up and take notice. Around the world, companies have become increasingly concerned by the impact of extraneous factors on our decision-making processes…especially when it comes to hiring new employees.

Researchers have been able to prove we let extraneous factors influence our decisions all the time. These factors include height, weight, skin color, bodily ability, heteronormative behaviour, and gender.

This bias influences everything we perceive, which in turn impacts our decisions. You may have in fact received just as many qualified black candidates as white candidates, but failed to notice it because unconscious bias undermined your attempts to remain fair. And because none of the factors typically tracked by our unconscious minds have any bearing whatsoever on a person’s ability to do a job and do it well, our tendency to use them in the decision-making process represents a real risk factor when it comes to sourcing and hiring great talent.

What is Unconscious Bias?

An unconscious bias is a snap decision, one which happens before you’re even aware a decision has been made. The amygdala is to blame: two almond-shaped neurons which control both fear (that person is not like me) and pleasure (that person is like me, and part of my tribe). In other words, unconscious bias is a product of our lizard brain.

Our lizard brains are good for many things, but making sound business decisions is not one of them.

Biases can be based on anything not just the aforementioned factors. Researchers have observed employers making bad decisions because of people’s height, facial structure, accents, and hair colour too.

You may be quite consciously aware height has nothing to do with leadership capability…and then consistently promote taller men anyway. You may know a Southern accent doesn’t make someone stupid…only to go on and assume the twangy IT grad from Kentucky who is sitting in your office just “doesn’t seem quite intelligent enough to do the job.”

Consider the results of this MIT and University of Chicago study:

For this study, 5000 resumes were sent to 1,250 employers advertising for jobs. Some resumes had names considered to be “typically white” while others had names considered to be “typically black.” Each employer was mailed four resumes, two “typically white” and two “typically black” ones. For each group, one applicant was average and one was above average. The study found that applicants with “typically white” names received 50% more callbacks than applicants with “typically black” names. White candidates also received more callbacks than highly skilled black candidates. The Real Effects of Unconscious Bias in the Workplace

Blink and you’ll miss it – the “average” white male got the call 50% more than the “above average” black male. This means unconscious bias in hiring could cost you A-player employees, filling your ranks with mediocre ones who just happened to have a name your amygdala liked better.

It’s also important to note you can even demonstrate bias against groups you’re a member of. Bias impacts how we see ourselves as often as it impacts how we see others. Women can be biased against women, for example, and are as likely to pass on a resume with a female name as a man is. This self-perception may even lend a little truth to the “pipeline problem” theory. Certain job descriptions, for example, may cause women or minorities to self-select by simply convincing them, on a deep, unconscious level, that they’re not right for the position.

Still not convinced? You can check your own bias with this test from Harvard University.

Bias is an insidious product of our culture and history. It tends to reinforce itself unless conscious efforts are made to combat and control it.

Counting the Costs of Unconscious Bias

The numbers aren’t well-defined yet. We don’t know, for example, how much unconscious bias in hiring costs companies on an annual basis yet. However, we know the cost is very real. Consider the results of this Credit Suisse Research Institute study:

The Credit Suisse Research Institute in 2012 measured the financial impact of women on company boards in 2360 companies across the globe from 2005-2011 in terms of stock returns and commonly used financial metrics. In a like-for-like comparison between companies with at least one woman on the board to companies without, the boards with women performed better over a 6-year period, and not just slightly better. For large cap stocks (greater than US $10 billion), companies with women board members outperformed those without by 26%. Scenario Magazine

According to a McKinsey & Company report, the benefits are also evident when women are found in top management positions. They found companies who made an effort to include more women in top management positions experienced the following benefits:

  • 1% greater return on equity
  • 3% greater operating results
  • 17% return on stock prices

Take any of these metrics and apply them to your own business. It will become quickly apparent how much you stand to lose should you choose to avoid addressing the impacts of unconscious bias in hiring. Actually, you stand to lose even more than you think, since these two studies don’t even address the impact of excluding minorities.

Major Companies Are Taking Workplace Diversity Seriously—Very Seriously.

Major companies are, in fact, spending a massive amount of time, money, and effort when it comes to eliminating the unconscious bias in hiring which has thus far prevented them from achieving the kind of diversity in the workplace they’ve been attempting to create.

In the healthcare sector we see the Roche Group, a pharmaceutical company, investing in bias elimination training while simultaneously taking a hard look at their policies. For example, they expanded maternity and paternity leave policies to attract a more diverse pool of candidates.

In the technology sector, Google is leading the charge. In 2015, Google committed over $150 million to improving diversity. They’ve taken concrete measures to do just that, from creating an awareness and training video (you can watch the entire, hour-long presentation below) to renaming half of their conference rooms so both women’s names and men’s names would be represented. Facebook, Yahoo, Pinterest, Indiegogo and several other Silicon Valley Giants have joined Google in publically releasing their diversity figures while making big commitments to improve those figures in the coming years.

Despite Google’s impressive numbers, it’s worth noting companies don’t have to spend a massive amount of money to find ways to eliminate the impact of unconscious bias in hiring, and small companies are doing their part as well.

Tim Singleton, President of Strive Technology Consulting based in Boulder advocates a measure costing zero dollars and zero cents. “We have a person who is not related to the hiring process receive all of our resumes. They make copies of each resume, and then remove names, addresses, school names, and other identifying information. It’s all replaced with a unique ID. The hiring team then looks through those resumes and selects candidates to interview.” They also ensure every interview candidate gets asked the same set of questions every time they interview to make sure every candidate receives an equal chance to put his or her best foot forward.

Companies who choose to invest in workplace diversity may expect to receive a host of benefits.

Benefits start with lower turnover. One study shows discrimination in the workplace leading to high employee turnover costs employers $64 billion on an annual basis. You cannot retain employees who do not feel welcomed, valued, and safe.

Minorities leave not only because of unconscious bias, but also because of blatant discriminatory behaviour…behaviour that is less likely to arise in a diverse workplace. The effects of discriminatory behaviour also spread, discouraging other diverse applicants from applying for roles, creating a self-perpetuating system. Minorities may also begin declining to do business with the offending company.

For a full breakdown of the costs with a particular focus on discrimination against LGBTQ employees, see this infographic.

Addressing workplace diversity also gives you the opportunity to gain a competitive edge. Diverse workplaces are simply more innovative because they create an environment where many perspectives may be heard. As one Harvard Business Review study demonstrates, this innovation helps to create companies which outmanoeuvre and outperform their competitors.

As we’ve already covered, eliminating unconscious bias in hiring will help you put stronger employees in every role by reducing the danger that you’ll fail to see or process superior qualifications just because they’re accompanied by a female or ethnic name. These employees will also be more engaged. One joint report from Nike and RoundPegg discovered a 6% increase in employee engagement for every 10% increase in employee diversity. Who wouldn’t be engaged by a thriving, warm, workplace culture where many different types of people can feel accepted?

There are also significant PR benefits. Many news stories cover the successes and failures of prominent companies when it comes to building diverse teams. Those who fail often suffer significant hits to their reputation which can, in turn, reduce sales just as word-of-mouth from former employees can. Why wouldn’t your business want to gain the trust and loyalty of larger audiences?

How Other Companies Have Tackled Bias in the Hiring Process

Google isn’t really the first innovator when it comes to eliminating unconscious bias in hiring. Orchestras have been using “blind auditions” since the 1970s to make sure gender perceptions can’t impact the quality of the music or limit opportunities for female musicians. The technique works.  Nevertheless, women still only account for 25% of most orchestras. Is this a “pipeline problem” again, or is something else going on?

Carl Erikson, CEO at Atomic Object, notes even job descriptions can create issues by turning women away. “We thought our developer requirements and completely rewrote our job description. We found women are more likely to want concrete details. They get turned off by superlative, competitive language, and they avoid jobs they don’t feel totally qualified for.”

Andrew Reeves of Luxe Translation Services stresses people-based checks and balances, as well as openness and accountability. “When we hire a candidate we don’t leave the decision to the interviewer alone. The interviewer will have to speak with two other people at our firm, describing the candidate and explaining why that person should be hired. The other two are not allowed to see the candidate, which means there are no issues with how the candidate looks. When the interview speaks out loud bias is much easier to spot.

For example, if the interviewer says “she is hot” we know bias is at play. Most of the time, if the interviewer can’t convincingly verbalise why they like this candidate versus another candidate then we feel we’re looking at a bias scenario. And saying ‘I just felt like she is better suited’ doesn’t fly at our firm. We need facts which demonstrate why the candidate will excel.”

For more outstanding ideas, visit the Startup podcast. They often have very lively discussions about unconscious bias in hiring and how to eliminate it.

A Step-by-Step Plan for Eliminating Unconscious Bias in Hiring

Companies who don’t have a comprehensive plan will nevertheless experience inconsistent results. Fortunately, others have paved the way. Such a plan already exists. These steps will also help companies keep the diverse clients they’ve so painstakingly attracted.

Step 1: Recognition. You can’t solve a problem if you’re not willing to recognise the problem exists. You need to talk about it. Awareness training can be extremely helpful here.

At a minimum, anyone who is involved with hiring, firing, managing, or promoting employees should receive this training. These discussions will also provide some excellent opportunities for innovation. Your employees are likely to deliver specific improvements in current workplace processes that are unique to your business. No company who is serious about eliminating unconscious bias can afford to skip this step.

There are also many training programs to choose from. Some are quite pricey. However, there are also plenty of free resources available—witness Google’s video above. Companies of all sizes should be able to find suitable tools for launching these conversations.

Step 2: Use blind technology to find great candidates. We built Search Party, in part, around this idea. If you see the candidate’s qualifications before you see anything else you’re more likely to focus on those qualifications.

We couple this with a powerful algorithm which has been extremely successful when it comes to matching candidate qualifications to positions where they are most likely to be successful. As a result, you are more likely to get a broader range of candidates to interview in the first place…and all of them are more likely to be A-players.

Step 3: Create safeguards, processes, and structures to eliminate interview bias. Atomic Object does this extremely well, as it has taken two additional steps to ensure success.

“We created an interview script which was carefully evaluated for biased questions so every candidate would be on a level playing field,” Erickson notes. “We also created candidate personas, with specific expectations based on the candidate’s level of education and experience. This helps us evaluate each candidate against the same standard, not the unspoken (and possibly biased) standards in each interviewer’s head.”

Brian Mohr, Managing Partner at Y Scouts, also stresses the importance of identifying and emphasising certain behavioural or success traits in order to measure candidates against these traits.

“Our clients consistently emphasised three particular characteristics and behavioural traits: driving results, developing people, and learning relentlessly. This model guides our recruitment process. If a candidate can’t show us proof points from their career that demonstrate these behavioural traits we won’t move them forward in the process no matter how great they look on paper. This has allowed us to combat any hiring biases that may arise.”

Step 4: Evaluate your current company culture. Google renamed half its conference rooms so women would be honoured proportionally to men. Atomic Object changed its evaluation and compensation structure.

You may even want to enact a zero tolerance policy for racist or sexist speech…again, the quickest path to losing your talent is allowing them to feel discriminated against or unwelcome at work. And since many of these individuals are used to feeling unheard and unwelcome, you may need to develop a culture which quickly demonstrates that you want everyone’s contributions, big or small.

Even your benefits might need some overhaul…offering maternity/paternity leave and flexible work policies may help you make your company more attractive to a diverse workforce simply by eliminating barriers which keep them from bringing their talents to the table.

What Will Eliminating Unconscious Bias Mean for Your Company?

Many critics of workplace diversity efforts rightly repeat the axiom that “correlation is not causation.” They are often quick to dismiss the business case for the elimination of unconscious bias because “causation” has not been adequately established.

Yet correlation has driven many business decisions. Data mining and predictive analytics thrives, in part, on correlation, and businesses have used these correlations to grow their profits. When researchers noted a correlation between increased beer sales and beer’s proximity to the diaper aisle, grocery stores increased their profits by the simple expedient of moving the beer. Whether or not the proximity caused the sale hardly matters…the numbers…the increased sales figures…are enough for these companies to make the appropriate changes.

And while we don’t have the causes nailed down, we do have plenty of “results” nailed down: a 26% increase in key financial metrics represents a lot of money. Lower turnover can be boiled down to a dollar-and-cent benefit. Increased productivity, innovation, and engagement mean measurable increases in the bottom line.

And the causes are somewhat evident anyway. It’s not that women, minorities, or LGBTQ people, as groups, are likely to exhibit any special traits that white males don’t possess. Such an idea would be, well…biased…in addition to being completely inaccurate.

Rather, the elimination of bias achieves three things. First: excellent candidates in every role, versus outstanding (white, male) candidates in a few roles and mediocre (white, male) candidates in every other role.

Second: your company gains a breadth of perspective which will bring fresh new approaches to the table. A cis Asian man sees different parts of the world than a black trans woman does. A white man in a wheelchair has a different reality than an able-bodied older Latino woman. When you take advantage of these insights you gain the power to improve your messaging, create new products or services, and ultimately vastly increase your market share.

Third: a diverse company typically creates an inclusive, thriving, exciting culture employees are typically very proud to be a part of. This translates into company loyalty and employees who actually care about the business’s success, as opposed to employees who are simply arriving each day in the hopes of collecting a paycheque. This level of excitement and positivity tends to seep into everything the business does.

Is your company working hard to build a more diverse workforce? What are your thoughts on unconscious bias in hiring, and what will you be doing to eliminate it? Please let us know in the comments below—we want to hear from you!

In the meantime, we want to demonstrate one cost-effective, easy way to eliminate unconscious bias.

Search Party helps eliminate unconscious bias in hiring by eliminating “the human element” from the equation. Our algorithm does the work, leaving you with a shortlist of candidates which are stripped of all identifying information. You can then touch base with the candidate’s recruiter to schedule an interview. If you’ve taken steps to eliminate bias in your interviewing process as well you can feel reasonably confident you’ve done your part to manage or eliminate bias in the hiring process…all without having to rely on a Google-sized budget.

Magda Walczak

Magda Walczak is the Chief Customer Officer at Search Party, the world's first marketplace that connects employers, recruiters and job seekers. She's a passionate supporter of animal rights and author of Saylor's Tale, a children's book promoting responsible pet ownership.

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