According to research by The Center for Talent Innovation—a nonprofit think tank and thought leader in diversity and talent management—diverse companies are 70% more likely to capture new markets as they grow.
Simply put, diversity drives success. For instance, Boston Consulting Group recently found that companies that have more diverse leadership generate 19% more revenue due to innovation. Already, 8 in 10 Americans view racial and ethnic diversity in the workplace as important, according to the Pew Research Center. The Pew Research Center also reports that Gen Z is the most racially diverse generation in U.S. history, and it expects to work in environments that embrace this diversity.
So, why aren’t more companies better able to attract and hire a more diverse workforce? Why are there only 24 women CEOs of Fortune 500 companies, and why are only 2% of tech executives black?
Research in behavioral economics has revealed a number of unintended biases relevant to recruiting, including:
- The “like me” bias: Hiring managers select candidates who are similar to themselves in personality, experience, gender, etc. This type of replicative hiring leads to a homogenous workforce and could look like discrimination.
- The halo effect: A candidate is selected because of an irrelevant favorable attribute, attractive looks, or even hobbies rather than through an objective analysis of skills, including qualities of successful personality traits. When an employee is selected based on a great smile or a shared interest in fishing, organizations are left with a bad hire and have lost out on better-qualified talent.
- Groupthink: When a consensus among hiring managers and recruiters is more desirable than working through opposing viewpoints, it reduces the likelihood of hiring talent with genuinely differing viewpoints, backgrounds, and experience.
Employers that successfully transcend implicit or unconscious hiring bias redesign their recruitment strategies to recognize and address bias throughout the process:
Step 1: Determine who will apply. Assess job postings and your sourcing approach.
The job description should clearly describe the role and use language that is inclusive and gender-neutral. Research by Text.io and others has found that words like “self-sufficient,” “champion,” and “ninja” are more appealing to male candidates, while terms including “support,” “trust,” and “commitment” better attract females.
Technology can be used to help diversify sourcing, but it is critical to ensure it does not end up codifying bias. In late 2018, it was found that a major technology firm’s sourcing algorithm was doing just that. As a result of observing patterns within the data, the system taught itself male candidates were more desirable.
Step 2: Think critically when screening candidates. Anonymize résumés and standardize interviews.
Research studies have consistently found that résumés with names associated with women or other underrepresented groups are less likely to get an interview request. Coverage of these findings in the popular press include The Financial Times and Forbes.
In one instance, Erin McKelvey had trouble securing interviews in the tech industry, but after updating her name to Mack McKelvey, her résumé got a 70% response rate; in another, Kayo Anosike changed her name to Kayla and secured a new job in 10 days after previously hearing nothing.
Blinding résumés, or redacting personally identifying information, such as names, addresses, dates, and more, is a practice gaining popularity to help overcome this type of bias and promote diversity. In the 1970s, orchestras started holding blind auditions—placing musicians behind a curtain so they were judged on skill alone—to increase the number of women hires. The change led to dramatic improvements in gender equity.
More recently, the American Alliance of Museums (AAM), a nonprofit with 40 employees in Arlington, Virginia, took a similar approach, requesting applicants leave off personal information, like college names and graduation dates, to help diversify its talent pool.
Judgments made in the first few moments of a job interview often predict the outcome of the interview. Unstructured or ad hoc interviews can create unfair advantages. Shifting to a data-driven interview process—using standardized questions, weighted responses, and individualized feedback—levels the playing field and helps reduce bias.
Step 3: Make diversity and inclusion a part of the offer process and the initial integration into your corporate culture.
One study found that among master’s students at Carnegie Mellon University, 93% of women refrained from negotiating an initial salary offer, while only 43% of men accepted an initial offer; ultimately, the men’s salaries were 8% higher.
There is no easy way to address such imbalances, but studies have shown that transparency about whether a position is negotiable can make a big difference. One study of MBAs found that a gender-based gap in starting pay disappeared when the expectations around negotiability were made clear. Women have been shown to be less likely to negotiate when there is ambiguity. Greater clarity means more equal opportunity.
Successful recruiting means setting new hires up for success, which requires thinking about how new employees are not just onboarded but also integrated. Studies show that the first 90 days on the job are crucial, and that’s as true with managing diversity as anything else. It is imperative to consider underrepresented groups’ needs once they are hired, creating a welcoming and diversity-conscious community from day 1.
Reducing bias in hiring is essential to your future growth and success. Over the next 3 years, women are expected to grow to 47% of the workforce, and minorities are expected to grow to 40%.
When thinking about your hiring process, consider how diversity of perspective can drive innovation and how expectations are rising for organizations to embrace this. And don’t take anything for granted: To attract talent from varied backgrounds, unintended biases in your hiring process must be addressed deliberately and systematically.
|As Chief Technology Officer, Al Smith leads the creative and technology teams behind iCIMS’ product portfolio, providing clients with the industry’s leading talent acquisition platform.
Smith joined iCIMS in 2015 as Vice President of Technology with responsibility for iCIMS Labs, encompassing the product management, business analysis, development, quality assurance, research, architecture, and production teams. He modernized internal development and test engineering practices, transitioned iCIMS’ data hosting infrastructure and launched iNSIGHTS (the company’s data analytics program), UNIFi (the iCIMS Platform-as-a-Service framework) and Offer (iCIMS’ award-winning, end-to-end job offer management solution).
Josh Wright is Chief Economist at iCIMS, where he leads a team of data scientists in analyzing emerging trends in the U.S. labor market. Wright has nearly 15 years of experience, including serving as a U.S. economist at Bloomberg.
Wright holds a bachelor’s degree from Yale University and a master’s degree in public policy from Harvard University. He has published original research everywhere from academic journals to national newspapers and popular blogs, and his insights on the state of the labor market and the broader U.S. economy frequently appear in major media outlets.