Why are diversity and inclusion important in hiring?

Organizations should strive to operate on a merit basis and provide equal opportunities to deserving candidates. Not only is this an equitable approach from a moral standpoint, but it also has measurable profitability results for companies. Diversity in hiring enriches the perspectives and opinions within an organization. In fact, diverse teams are 87% better decision makers than individuals. Teams containing members of different genders and races and an age gap of at least 20 years have been shown to make more profitable decisions. Diverse organisations are 45% more likely than others to increase their market share. They are 35% likelier to fiscally outperform their industry’s national average. Gender diversity on an executive level is proven to have positive fiscal results. Companies with more women working in line roles, or roles associated with the core functions of a business (such as sales), have repeatedly come out on top across industries. Moreover, 67% of job seekers report that diversity is a significant criteria when considering a job. 

Diversity is not synonymous with inclusion. Fostering an inclusive culture is key for attracting and retaining a diverse talent pool and continuously providing a positive employee experience over the long term. Organizations must make a commitment on a cultural level to ensure an equitable and inclusive experience to employees and candidates in all aspects, from the onboarding stage and beyond. Commitment to diversity requires a concerted effort. During the recruitment stage, this effort should aim to eliminate a major barrier to diversity and inclusion: bias. 

Diversity, People, Heads, Humans, Group, Personal

Bias and decision making

According to some psychology experts, humans make about 35,000 decisions daily, or 1 decision every 2.5 seconds. People make most of these decisions subconsciously. With that said, our instinct generally is to make these decisions as quickly as possible. In a hiring context, hasty decisions and snap judgements perpetuate bias and hurt firms’ chances of finding the best fit for their needs. 

4 types of bias in hiring

Conformity bias: This term was coined by the Asch Experiment which concluded that decision making can be influenced by peer pressure or groupthink. This behaviour stems from a fear of being ridiculed or not accepted by peers, which sways decisions towards what the individual believes the group’s expectations are. In a human resources context, this may occur in a scenario where only one person on a hiring panel believes a candidate is a good fit. Even if the hiring manager is convinced that the applicant in question would be a great fit, they may hesitate to advocate for the candidate out of fear of being judged by their coworkers.

Confirmation bias: This type of bias happens when one makes a snap decision and then aims to interpret subsequent information in a way that affirms their initial assumption. Thereafter, the onboarding process is no longer objective and fair whether the assumption that the recruiter makes about the candidate is negative or positive. 60% of interviewers make a decision about the candidate’s viability within 15 minutes of meeting them or even before they meet them. This type of rushed and irrational decision making prevents businesses from finding an objectively good match for their opening.

Halo effect: This occurs when a recruiter puts too much emphasis on one positive aspect about a candidate, such as where they went to school, and overlooks other information about them. This blindsides the recruiter and may cause them to dismiss a better fit for the position due to their biased opinion. By favouring certain candidates for arbitrary reasons, the employer misses out on new perspectives that could benefit their organisation. 

Similarity attraction bias: As the name indicates, this bias stems from people’s instinct to surround themselves with those that they have things in common with and have a rapport with. Being able to get along with those around you is important in a workplace. However, recruiters can sometimes take this desire to surround themselves with similar and like-minded individuals too far. According to the Harvard Business Review, when there is a 3:1 ratio of male to female candidates in consideration for a job, the woman has a 0% chance of getting the position. 


Biased Hiring Decisions

AI and bias

Some applications of artificial intelligence software in recruitment include machine learning and NLP (natural language processing). AI is used to sort through candidates and some technologies, such as NLP used in chatbots, can be used to guide candidates through the application process. In order to avoid unconscious bias, AI can be programmed to ignore demographic information about applicants. Gender, race, and age are often grounds for discrimination and the right AI tool focuses on relevant and objective data points instead of allowing personal information to impact its decision making. AI can be used to construct an ideal candidate profile. This profile includes the skills, traits, and qualifications required in a successful candidate. The AI can then assess candidates objectively without the assumptions, mental fatigue, and unconscious bias to which humans are susceptible. 

Despite its ability to be objective, AI is not inherently free of bias. An AI tool is only as unbiased as the data it draws from and the people who programmed it. Therefore, there remains a need for human input even when AI is integrated into the recruitment process. Evaluating diversity and performance outcomes is key to ensure that the AI is working efficiently and providing a fair experience to applicants. 

Diversity in hiring delivers: company success stories

  • KPMG hired 44% more women after implementing an AI assessment tool.
  • Intel increased diversity within their company by 41% by introducing diverse interview panels. By involving women and people of colour in the hiring process, the company was in turn able to onboard more employees from those demographics. 
  • After devoting resources on partner-level leadership to diversity recruiting, the number of women in top management positions at Ernst & Young increased by over 20%
  • Cisco introduced diverse interview panels. After, Hispanic women and African-American women’s chances of making it through the interview increased by 50% and 70%, respectively. 

Final takeaways

While research has shown that diverse companies consistently outperform their less diverse competitors, women and people of colour remain underrepresented in many corporate contexts. To illustrate, just 6.6% of all Fortune 500 CEOs are female. Organisations should actively seek to mitigate the underrepresentation of women and people of colour in leadership positions in the workforce and to diversify their teams in general. Educating oneself about common biases, being mindful of microaggressions (small comments or actions that can perpetuate bias on a day to day basis), and using diverse interview panels to onboard new employees are all ways in which employers can improve their diversity and inclusion efforts.