Why Your Lack of Diversity is Affecting your Bottom Line

BY Nick Di'Lodovico

Organisational diversity is still an issue, and the cost is real.

You would think in this day and age organisational diversity would be a moot point – with global social reforms across gender, sexuality, disability and race equality, one could believe the challenge of diversity has been overcome.

Sadly, this is not the case. Some fu(cked) facts:

• In 2018, unemployment of ethnic minority groups in the United States made up 44.9% of total unemployment, with the worst-off being Black or African American, despite the fact they represent less than 14% of the total population.[1]
• In Australia, the average full-time weekly wage for a woman is 15.3% less than a man; and women will retire with less than half the superannuation of a man.[2]
• In the UK, men with physical impairments generally experience pay gaps in the range of 15% to 28%, depending on the nature of the disability. The difference between non-disabled women’s pay and that of women with physical impairments ranges from 8% to 18%.[3]
• In the United States, 42% of Transgender American’s are unemployed and 31% are living at the poverty level.[4]

So why do we continue to see inequality in employment?

Despite all the awareness and work to improve employment equality and inclusion, there are four commons slip-ups in recruitment which allow for underlying bias to be introduced into the hiring process.

1. Job descriptions

Despite the best of intentions, hiring managers or recruiters can discourage groups of potential applicants. They do so by using restrictive terms which are gendered or ageist, this can extend to unnecessary education standards which are not required to do the role.

2. CV filtering

More often than not, recruiters and hiring managers are overwhelmed with application volumes … having to review sometimes thousands of resumes and cover letters for one role. This often leads to CV screening for job titles, big brand company names, and favouring certain universities or education providers.

3. Unconscious name filtering

In some instances, unintentionally or intentionally, applicants will be filtered out of the screening process based on their name. Researchers of Harvard and Princeton found that blind auditions increased the likelihood that female musicians would be hired by an orchestra by 25 to 46 per cent! Whilst one seminal study found that African American sounding names had a 50% lower call back rate for an interview when compared with typical White named individuals.[5]

4. All of the unconscious biases

Would you believe there are over 100 different forms of cognitive biases? Confirmation bias, affinity bias, similarity bias, halo effect, horn effect, status quo bias, conformity bias… the list goes on. These biases make diverse hiring an even more difficult process as you don’t even know that you are missing out on the best candidates!

The Bottom Line? Lack of diversity costs.

Time and time again research has shown that diverse organisations are more effective, perform better financially and have higher levels of employee engagement.

A recent McKinsey report, “Delivering through Diversity” showed that organisations with gender-diverse management were 21% more likely to experience above-average profits. Whilst companies with a more culturally and ethnically diverse executive team were 33% more likely to see better-than-average profits. This figure grows to 43% when the board of director level is also diverse in gender, ethnicity, sexual orientation.[6]

More compelling is that for every 1% rise in workforce gender and cultural diversity, there is a corresponding increase of between 3 to 9 per cent in sales revenue![7]

Not only is diversity a social and ethical problem for organisations, but it is also a commercial one.

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Assessing all applicants blindly and equally leads to
improved diversity, recruitment efficiency, and organisational performance.

Blind screening: Removing information that reveals the candidate’s race, gender, age, names of schools, etc to reduce unconscious bias that creeps into hiring decisions.

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For our customer, a global airline, cabin crew are at the heart of delivering great customer experience.

With 9000+ cabin crew creating iconic experiences for passengers every day, they want to maintain their strong brand through hiring only the best in customer service and give their applicants an iconic experience.

An iconic brand also attracts an enormous number of applications some of which don’t fit the criteria. Sifting through so many CVs to uncover the right candidates is extremely time-consuming for the recruiters.

Some of the challenges the team faced in their existing processes included:

• Using videos to screen applicants that only added to the cognitive and time load for recruiters and introduced the opportunity for bias.
• Low yield from assessment centres for those applicants shortlisted from screening.
• Maintaining a gender mix in the applicant pool was important. Yet their screening tools were inadvertently omitting men from the process.

The results were amazing.

• No bias in the process with the ratio of men and women unaffected leading to a more diverse set of hires in comparison to prior campaigns.
• Shortlisting completed in 2 hours instead of 2 weeks.
• Over 2.5 times more offers were made compared with the existing process. 100% completion of the process by applicants.
• Average candidate enjoyability score of 9/10.

A post-campaign survey showed a perfect score from the recruitment team rating the technology as faster, fairer and delivering better candidates.

How conversational AI can truly remove bias in screening

No matter the good intentions, humans will always lean on their biases when making decisions. Interrupting bias in recruitment needs a systemic solution. Something that can operate independently, in the absence of a human trusted to do the right thing.

While PredictiveHire does not claim to completely solve for bias within an organisation, using a chat-based assessment at the top of the recruitment funnel will help you to interrupt, manage and therefore change, biases that reduce diversity in hiring.

A fair and inclusive Candidate Experience

Chat is inclusive for all candidates

Candidates chat through text every day. It’s natural. It’s normal. It’s intuitive. It’s an opportunity for them to express themselves, in their way, with no pressure.

Playing games to get a job is not relevant. Talking to a camera is not fair. What if you are unattractive, introverted, not the right colour or gender, or don’t have the right clothes?  When you use chat over other assessment tools, you’re solving for adoption, candidate satisfaction, inclusivity and fairness. Our platform has a 99% candidate satisfaction score, and a 90% completion rate.

Here’s the 2020 Candidate Experience Playbook.

We use an intrinsically blind assessment design

Blind screening means an interview that is truly blind to the irrelevant markers of age, gender and ethnicity. That just can’t see you. And therefore, cannot judge you.

We do not use any information other than the candidate responses to the interview questions to infer suitability for the job your candidates are applying for. We call this ‘fairness through unawareness’ – the algorithm knows nothing about sensitive attributes and therefore cannot use them to assess a candidate.

We only care if the candidate is suitable for the job, and nothing else.

Why is organizational diversity important?
What are examples of organizational dimensions of diversity?
What does diversity mean?

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References

[1] https://builtin.com/diversity-inclusion/diversity-in-the-workplace-statistics

[2] https://humanrights.gov.au/

[3] https://www.equalityhumanrights.com/en/publication-download/research-report-107-disability-pay-gap

[4] https://theconversation.com/transgender-americans-are-more-likely-to-be-unemployed-and-poor-127585

[5] https://digitalcommons.ilr.cornell.edu/cgi/viewcontent.cgi?article=1108&context=student

[6] https://www.forbes.com/sites/pragyaagarwaleurope/2018/10/19/how-can-bias-during-interviews-affect-recruitment-in-your-organisation/#79b1c0b81951

[7] https://www.forbes.com/sites/pragyaagarwaleurope/2018/10/19/how-can-bias-during-interviews-affect-recruitment-in-your-organisation/#79b1c0b81951

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