Over the past few years, Diversity, Equity, and Inclusion have become mainstream company management priorities. Businesses are beginning to realize how valuable it is to have a diverse workforce that reflects in the customer base and has a more diverse staff.
However, whilst recruiting for positions and performance evaluation is still not free from bias, this remains a significant challenge that potentially defeats the set corporate DEI vision, regardless of the goodwill. This article explores how bias affects hiring procedures and performance reviews, how it jeopardizes diversity and equity (DEI) initiatives and solutions to these problems.
What is Hiring Bias Impact on Companies?
Bias in hiring, performance reviews, and opportunity access are just a few examples of how it can put businesses in danger. A new analysis claims that bias can undermine a company’s financial performance, productivity, diversity, equality, and inclusion (DEI) objectives. A
biased culture can lead to higher attrition rates, leading to expenses of up to 150% of an employee’s yearly salary. Additionally, it can also reduce productivity and decrease employee engagement. According to a 2021 study by Global Industry Analysts, companies invested approximately $8 billion in corporate diversity training in 2020. This indicates that DEI aims have gained prominence in recent years.
This number is expected to increase by 2026, yet most companies have no measures to assess its effectiveness. One important strategy is tracking employee success through the use of both quantitative and qualitative data. This is important because, according to research, typical diversity training, like DEI workshops, can have some effect but cannot remove the biases ingrained in corporate structures.
How Can the Bias Hiring Issue Be Solved?
Addressing bias in the hiring process is a challenging task. However, there are ways through which companies can handle it by treating it like any other business problem.
They should start by analyzing data, understanding the problem, planning interventions and course correction methods, assessing the results, and evaluating the progress. Companies can focus on DEI goals and bias reduction by following certain things, such as:
- Defining and monitoring metrics
- Teaching the people what bias means and looks like
- Addressing bias within the company’s system
How Does Interrupting Bias Help Hiring?
When companies interrupt bias in hiring and recruitment, they select the most qualified person for the job position. They can follow the below process:
- Defining metrics will help determine if the candidates are falling out of the hiring funnel and, if yes, where.
- It is also necessary for companies to track the people who apply for the job. More things to track are who applies, is referred, gets through the resume review process, gets an interview, and receives the final offer.
- The result will be more jobs offered to the right person.
By introducing precise competency criteria, such as evidence-based and action-oriented feedback, reducing bias in performance reviews can result in more equitable and better-quality assessments. A report suggested that companies increased evidence-based feedback by approximately 44 to 52 percentage points by adhering to the methodology.
The above-discussed Bias Interrupters framework also requires companies to keep track of career-enhancing tasks and non-promotable office housework, such as making appointment schedules and tidying the kitchen.
The research stated that companies who adhered to the framework removed discrimination against women in accessing essential technical tasks that could advance their careers. Additionally, the bias that companies had against women of race performing more unimportant office housework was removed, falling from 27 percentage points to zero.
Why is Finding the Root Cause Important?
Companies must not rely entirely on modern tools and technologies; instead, they must find the answer to the whys. For example, if the company has a problem with no women in senior leadership roles, they must find the root cause. The reason can be the biased nature of the hiring managers, which cannot be solved by defining metrics or using technologies.
In such situations, training people on what bias is by conducting workshops and seminars can help in fair performance evaluations. People should be taught to assess the candidate as a person and not based on gender, race, or sex.
Last Words
Corporate DEI goals can be seriously derailed by bias in hiring and performance reviews. This can result in a lack of representation, low staff morale, and missed opportunities for innovation. Businesses need to be aware of the effects of bias and act early to reduce it. Companies can bring their workplace equity goals closer to reality by implementing organized procedures, offering training on bias, and cultivating an inclusive atmosphere. Reducing bias in hiring is not only the right thing to do; it is also necessary for organizational success and resilience.