An organization is only as strong as its people. Top early-stage investors know this very well. Top talent from diverse backgrounds is increasingly aware of the importance of unbiased hiring and an inclusive work environment, and they don’t shy away from turning down a lucrative job offer that fails to represent that.
The hiring world has changed. Case studies of several top businesses have proven that unbiased hiring practices and a company culture that supports diversity are crucial to profitability and employee engagement. Yet, our recruitment practices, in their essence, haven’t changed for the past hundred years.
Reducing bias in the way we hire has the power to unlock untapped growth potential in our businesses. It also contributes to cultivating a company culture based on fairness, inclusion, and integrity. In this guide, we’ll put unbiased hiring practices under the magnifying glass, uncover their true value, and offer some lesser-known solutions on how you can incorporate them into your own recruitment flow.
How Can Bias Affect Recruitment?
The consequences of recruitment bias might not show up in a business immediately but they are all the more grim in the long run. Onboarding and investing in a professional who isn’t the right fit culturally or in terms of their skills is a mistake more costly than one might think. According to the US Department of Labor, a bad hire could cost up to 30% of that individual’s annual earnings. This can easily reach tens of thousands of dollars for a company with over 1000 employees.
When hiring bias decreases the quality of recruitment decisions, it doesn’t just burn resources but also bleeds into the efficiency of the team overall. In a survey by CareerBuilder, 95% of employers confirmed that a bad hire has previously affected their work team, productivity, and stress levels. The higher the position the new hire fills, the more damage they might do with their strategic decisions.
Unfortunately, it’s enough to onboard one bad hire to cause a domino effect and at times, knock off the business that hired them from its trajectory. If a candidate’s skills are exceptional but they aren’t a true culture fit, they can have an impact on more than just performance: they will likely affect the team morale as a whole. After all, the way shared values are embodied by employees is the sum of what everyone contributes to the team. This doesn’t mean that a company’s culture can’t change over time and be co-created by old and new employees but not in a way that would contradict your core values as an organization.
When Bias Affects Diversity
Biased hiring decisions don’t necessarily mean a mismatch in terms of a candidate’s profile. If we select professionals whose resumes meet selection criteria but they don’t show diversity in terms of their socioeconomic background, it still puts a cap on the growth potential of the business. On the other hand, if we consciously implement strategies for improving the diversity of our talent pool, it yields positive results in every aspect of the organization.
Several studies have proven this. According to the World Economic Forum, greater diversity efforts can increase innovation by 20% in companies. It can also have a positive impact on employee engagement, decision-making, and profitability. A variety of perspectives and backgrounds combined with a culture that encourages open discussion and equal treatment is a catalyst for healthy debate and positive change.
Better decisions, naturally, lead to heightened profitability. A McKinsey report shows that for every 10 percent increase in racial and ethnic diversity on the senior-executive team, earnings can rise by 0.8 percent in an organization. What’s more, companies in the top quartile for racial and ethnic diversity in this research were 35 percent more likely to have financial returns above their national industry medians. These astounding numbers prove that a company culture built on diversity can have a direct and significant impact on revenue.
Other research has shown that gender-diverse companies are 15 percent more likely to beat industry median financial returns. When diversity is implemented on all levels of an organization, it can have an even higher impact: according to the same research, having a diverse management team has been shown to increase business revenue by 19 percent. Naturally, it’s the people on the top who have the highest influence on where the business is headed.
So we know that building diverse teams and putting the right people in the right roles serves both employee wellbeing and business profitability. But how does our bias come in the way of these advantages?
Types Of Bias In Recruitment
Every hiring decision consists of a series of smaller decisions: from opting for a particular talent pool to shortlisting candidate profiles, all the way to the complete selection process leading up to an offer. There are more than a dozen different types of bias in recruitment that can affect our final choice on a role. These biases may be present at any stage of the hiring process and we’re often dealing with more than one of them.
The School of the Art Institute of Chicago defines bias as “favorable or unfavorable attitudes, or beliefs about a group that informs how we perceive, interact, behave toward the group that are automatically activated.” These attitudes stem from our everyday experiences, whether we have directly interacted with these groups or we’ve learned these attitudes from someone else.
It’s important to highlight that bias doesn’t always show up in the form of prejudice against a socioeconomic group. Our fair judgment can be hindered by purely situational factors too like the order of the candidates, who filled the position before them, or whether we woke up feeling rested that day.
Another common misconception about bias is that all bias is negative. These preconceived notions can actually be both positive or negative and either one can lead to unfair judgment in a selection process. Overemphasizing a candidate’s positive traits (also known as the “halo effect”) puts all other applicants in an unfavorable position and poses the risk of hiring someone inadequate for the role.
The same thing happens when we base our hiring decisions on sympathy or the opinion of someone else who referred the candidate for the role (also known as nepotism). This isn’t just unfair to other candidates and the team but to the person being hired as well. If they don’t have the skills, experience, and knowledge required for the role, it will likely set them up for poor performance. Besides, if their subordinates know that this person isn’t fit for the job, they will probably not support and respect them, or collaborate with them as willingly.
The more decision-makers are present in a selection process, the more complex it gets to deal with bias. Partially, because we all see people through a different glass and it might bring more biased views to the table. Secondly, because peer pressure of multiple people voting against or for a candidate can also affect our decision, a bias called conformity bias.
Overall, we can divide all types of bias in recruitment into two main categories: conscious bias and unconscious bias. Let’s look at what they each mean in detail.
Conscious Bias In Hiring
Conscious bias is the attitudes or inclinations we have towards or against a certain person or group that we are aware of. For example, hiring managers who say they prefer to hire a person from a certain gender or age group for a role are consciously aware of their bias and they decide based on them intentionally.
Conscious bias is easier to catch as it’s often voiced by the person, and it can also be observed from their behavior. In most cases, intentionally biased decision-making has malicious intent and is considered discrimination.
Exclusion and unequal treatment both within your organization and in your hiring process need to be addressed and dealt with as early as possible. By establishing policies and procedures for just hiring and educating your team on important values such as equality and diversity, you can create a more open and safe work environment.
Discriminative behavior should not be tolerated at any level of an organization. Every employee who exercises such behavior can be traced back to a bad hiring decision or the absence of a clearly defined and outlined company culture. This shows how important it is to establish inclusive and ethical cultural values in a company and to use it as your primary filter when it comes to your employee selection process.
Unconscious Bias In Hiring
Unconscious biases are learned stereotypes that are automatic and unintentional. They are beliefs we aren’t consciously aware of and are therefore harder to catch. Unconscious bias can be a part of our first impression of a candidate which, according to studies, is formed in under seven seconds — clearly insufficient time for a thought-through, data-based decision to be made.
Beyond just our first impressions, unconscious bias may show up at any point during our selection process, or even after hiring the person. They affect where we source profiles, our screening and interviewing process, our final hiring decision, and the way we develop and nurture talent within the organization.
To reduce biased decisions in your hiring, you need to examine your procedures across the talent pipeline. To do that, we first need to understand what unbiased hiring means and how it can be defined.
What Unbiased Hiring Means
Unbiased hiring is technically a misnomer in itself since human decisions are never completely bias-free. Our brain has a tendency to constantly look for patterns in the world around us and take shortcuts in our decision-making process. It’s what makes us human and what makes it possible for us to be efficient at learning and navigating the world around us.
However, this becomes a problem when our decisions take the wrong shortcut and lead to prejudice and unjust treatment. Bias in hiring poses barriers to suitable candidates based on their identity and gives disproportionate importance to factors that don’t relate to their ability to fit the role.
When we refer to unbiased or bias-free hiring, what we mean is that we try to reduce and eliminate as many of these biases as possible with the help of certain decision-making strategies and the right technology. As a ripple effect, this will lead to better candidate selection, more equitable recruitment efforts, and bigger diversity in teams.
The two most important pillars of that are equitable hiring and strategies for diversity.
Equitable recruitment practices focus on minimizing the effect of bias and providing equal opportunities to applicants with a disadvantage. This helps remove barriers that prevent candidates from diverse backgrounds and identities to be fairly assessed based on their job-related abilities.
According to recent race-ethnic population estimates, around 1 in 4 people in the US is considered BIPOC (black, indigenous, and people of color), almost 10% more than in 2000. Over half of the population is female, yet certain industries like technology and most leadership teams perpetually fail to create diversity in terms of these socioeconomic attributes.
Often hiring policies are the culprit for creating systemic injustice such as requiring a police check for all roles or using gendered words and culturally biased questions as part of the standard selection process. An equity audit on selection practices is key to minimizing bias and supporting candidates of diverse backgrounds to do their best in an interview.
The Importance Of Proactively Creating Diversity In The Workplace
Research shows that building a more diverse workforce directly contributes to innovation and business revenue. Making company values such as equal treatment and open communication the norm cultivates a safe work environment and has a ripple effect that boosts collaboration and creativity.
Fighting bias by resorting to outright discriminatory bias is in itself a very controversial practice that’s gaining much critique as it spreads across organizations. There’s much disagreement around proactively creating diversity in organizations but it’s safe to say that making unbiased decisions alone will not close the gaps in representation, because we’re all prone to bias. Besides widening our talent pool and making open roles more accessible, we can do the below to proactively hire for team diversity.
First, selecting for cognitive diversity and/or neurodiversity, and/or culture add (not just culture fit) and/or diversity of thought/work styles among equally qualified candidates. According to research, given two professionals who are both suitable for a role in terms of their skills, it’s more likely for the team’s performance to improve based on such criteria.
This would result in hiring a fully qualified candidate while proactively supporting diversity in the organization. Of course, how do you discover this? You need data-drive tools and standards.
Another key thing to embrace is anonymity and privacy. Simply put, select candidates whose identity traits like name, gender, age, race are anonymized in the first stages of the recruitment process, while giving such candidates ability, personality, motivational and other assessments to determine their suitability for the role and your team. This according to research would significantly improve the hiring process by reducing bias, and improving merit-based recruitment decision-making. In the end stages, naturally, everything becomes visible but by then our decisions – made behind the ‘bias reduction’ veil – are better and data-driven.
Moreover, consciously fighting systemic bias and giving equitable opportunities to diverse groups can help to not just improve the performance of your team but also contribute to closing the diversity gap on a broader level. Another important thing to keep in mind is not to throw the baby out with the bathwater, namely, not to turn inclusivity into tokenism. Perceived diversity should not come ahead of assessing the ability of candidates to fit the role as fairly as possible.
The Most Important Advantages Of Unbiased Recruitment
Now that we’ve seen how reducing bias in hiring and adopting more equitable hiring practices can affect equality and diversity on a larger scale, let’s look at their impact closer to home. As always, the devil is in the details so looking at the inner workings of your hiring process can give you a more nuanced view of what might need changing.
The more you finetune your selection process and criteria, the higher your success rate will be in hiring the best fit for each role. Training your recruitment team for critical thinking will help you improve the quality of your decision-making process and can extrapolate your findings to other areas in your organization. Equitable hiring is a skill that can be trained and it’s a constant learning process for even the most seasoned hiring experts.
According to our analysts and recruitment experts at Gyfted, there are six key byproducts of reducing bias in your hiring practices. Let’s look at each of them in detail and understand their impact better.
Fewer False Positives
False positives are the people who get hired to join your team despite being unqualified for the role or having values that are conflicting with your company culture. These are the “bad hires” we mentioned earlier who can cause high expenses, damaging strategic decisions, and interruption in your team efficiency.
False positives are easier to measure because once they join your team they will be a part of your performance reviews. Although it’s important to minimize the ratio of unqualified candidates who get through your filter, mistakes do happen and no system is perfect. The bigger problem isn’t that false positives get hired but that when their performance isn’t up to par, they aren’t critically evaluated and fired early enough.
Instead of limiting the opportunities given to candidates with the potential to be trained on the job, it’s more important to take valuable learnings from false positives. This means getting just as efficient at performance reviews and firing as selecting the right candidate. Remember, reducing bias in recruitment doesn’t stop at extending the offer.
Fewer False Negatives
There’s a lot of conversation around false positives or bad hires in the recruitment world and little concern about false negatives. We tend to forget that false negatives are hiring mistakes as well because they are harder to measure: once they are rejected, there’s no way to track the talent potential we missed out on (unless they make a name for themselves in another company that gave them the trust we didn’t).
According to Henry Ward, CEO and co-founder of Carta (formerly eShares), false negatives pose a much higher risk than false positives for this exact reason. You can’t measure the impact of these decisions, therefore you can’t learn from them. Unlike false positives who can be evaluated and fired when necessary, a decision to let valuable talent go can’t be reversed.
Henry Ward also points out that in most companies it’s the consensus of a committee that decides about a candidate. In these committees, each positive vote counts as one against the sum while a single negative vote can veto an applicant with great potential. This way, a consensus is effective in creating fewer false positives but at the same time, it increases the number of false negatives that slip away in your talent pipeline.
The problem with this practice is that it focuses on hiring people with fewer weaknesses and not with greater strengths. Candidates often get rejected for skills they haven’t been trained on or experience that could be complemented by someone else on the team. Instead, Ward suggests focusing on what each candidate is amazing at, their curiosity to learn, and how well they can collaborate with people who complement their skills and experience.
One possible way to do that is to scrap democracy in hiring committees and instead let the hiring manager have the final say, after of course, listening to the inputs of all interviewers. This might not work in every organization but changing the standard interview questions to focus more on strengths rather than weaknesses can create fewer false negatives and encourage a more collaborative work culture.
Quality Of Decision-Making In Recruitment
Developing a more equitable and bias-free approach to hiring trains your team to judge hiring requirements more objectively. This leads to being able to hire people with backgrounds and perspectives different from what your current employees have. We tend to forget that diversity isn’t just about cultural or gender attributes but neurological as well.
Around one in seven people are neurodivergent, which means they have some form of variation in their brain function that affects their sociability, learning, attention, mood, and other mental functions in a non-pathological sense. People with dyslexia, autism, or ADHD often have exceptional skills, yet have difficulty finding a job because of interview processes and job standards tailored to neurotypical individuals.
For example, people on the autism spectrum tend to possess remarkable pattern recognition skills. However, they might not perform as well in a conventional interview conversation. In addition, they may experience higher levels of stress due to the uncertainty of an interview process where they don’t know what to expect at each elimination round. Because of such factors, only 14% of autistic adults are employed.
When we reduce barriers to inclusivity and bias in our hiring processes, we begin to see behind buzzwords on resumes or a charismatic appeal in interviews and better understand what a candidate’s profile really means. As a result, we can train our ability to think critically and make the right decision in more complex and nuanced hiring situations.
Objective Benchmarking and Meritocratic Selection Of Candidates
Standardized interview processes tend to be better at emitting biased decisions and giving equal chances to all candidates. This leads to a more objective benchmarking system where the right candidate is selected based on merit and not superficial factors.
As we’ve seen with strategies reducing false negatives, hiring professionals with outstanding abilities in certain areas and great collaboration skills is more effective than hiring the ones who are “pretty good” at many things. It brings more expertise into your organization rather than candidates who are fairly good but aren’t exceptional in their domain.
The two key skills to look out for here are effective collaboration and learning ability. Professionals with a high level of expertise who are intransigent won’t be able to implement that knowledge with the help of others. Besides, if they aren’t curious to constantly learn and stay up-to-date within their domain, their expertise will likely become obsolete in the long run. Expertise is needed, especially at the higher levels of your organization, but it should never outweigh the willingness to learn and grow.
One way to assess that and to steer the conversation toward the actual abilities of candidates is to change arbitrary interview questions to those focused on outcomes. For example, instead of insisting on the number of years spent working or a particular educational background, questions should rather revolve around tangible proof of experience and potential. In other words, past projects relevant to the job and attitudes that are important to fulfill the expectations of the role. This strategy also helps filter out “talkers” who shine in interviews but lack the affinity to take action.
Finding Hidden Talent
One of the biggest advantages of unbiased recruitment practices is to uncover “hidden gems” in the labor market, in other words, candidates other companies reject because of their own biases. Besides reducing bias in your hiring process, you can proactively source talent with untapped potential by extending your talent pool to more diverse sources.
Besides neurodivergent professionals, disabled talent makes up another large chunk of the unemployed workforce ready to work. A lot of professionals with impairments in their physical abilities have other hidden strengths and advantages in comparison to non-disabled talent. For example, people with a hearing impairment can often focus really well in loud environments.
Bias-free hiring policies can differentiate between physical impairment that poses real limitations to performance versus those that don’t affect it significantly. Hiring the first disabled professional might require changes in the company’s facility or communication cadence. However, it’s an investment that opens doors to a more diverse talent pool and pays off in the long run.
Another massive group of hidden talent is people who require an alternative work schedule like parents and remote professionals located in opposite time zones. Collaborative forms of employment can help with creating more opportunities for them.
Job sharing is an example of a work arrangement where two people share the responsibility of a full-time job. Remote employees in other time zones can boost productivity by performing their part in a work collaboration during the nighttime of their coworkers.
At the end of the day, it’s an innovative mindset in recruitment that helps remove bias and barriers standing in the way of diverse talent. That’s the kind of initiative that in turn can boost innovation in the entire organization.
Eliminating Bias In Hiring
Minimizing bias in recruitment has immense benefits but it might seem like a massive undertaking at first. Figuring out how to reduce bias in your hiring process is a constant learning process. Not all strategies will work for your individual business needs but this step-by-step process should give you a framework to get started.
1. Set Measurable Goals
You can’t change what you can’t measure. Whether your method is more qualitative, focused on numbers, or a combination of the two, your diversity and equity goals should be clearly outlined. Run an analysis on where you currently stand in terms of minorities, diverse backgrounds, and the psychometrics of your team.
With Gyfted’s online tools for assessing organizational culture, you can map up your team’s values, strengths, and working style and use their psychographic data to hire for diversity. Your team members’ individual personality profile will only be visible to them, respecting their privacy, which they can bring to their 1-on-1 meetings with you. You’ll still get an unbiased picture of your team’s characteristics so you can make informed hiring decisions based on that.
2. Educate Yourself
The first step to tackling unconscious bias is to make them conscious, hence visible. This is probably the most important step in this process not just for recruiters but for the entire organization. Doing so can also have a positive impact on the company culture as a whole.
Project Implicit by Harvard University is a free resource that individuals can use to assess their unconscious bias in various contexts. This simple, multiple-choice questionnaire reveals our hidden attitudes in the workplace towards a particular socioeconomic group based on gender, color, sexual orientation, disability, body shape, and so on. It’s common for individuals to discover certain prejudices even towards a group they belong to and underestimate their own professional abilities without being aware of it.
By collecting this data anonymously, you may uncover the need for certain talent development initiatives that an organizational coach can help your team with. You can consider bringing in an equity consultant to support your diversity goals or a specialized professional to, for example, educate your team on the right communication to use with disabled coworkers.
3. Expand Your Talent Pool
Attracting a wide pool of applicants starts with writing meritocratic, noise-free and inclusive job descriptions. That’s the first barrier that decides whether candidates from diverse experiences and personalities want to work for you.
Pay attention to omitting gender-coded words that might discourage certain applications, and highlight your diversity, equity, and inclusion (DEI) efforts. Audit your job postings to make sure they use clear, unambiguous language. Question default requirements that might not be core to the job, that could for instance turn some qualified applicants away, for example “excellent communication skills” may turn neurodivergent applicants away. Specify engagement terms and salary, and also explicitly mention if you accept applications from disabled professionals.
Change arbitrary job requirements (such as the number of years worked in the industry or a specific educational degree) that may exclude talent with an alternative career path or call for knowledge that can be learned on the job. This helps avoid unnecessary blockages for career changers. Instead, focus on requirements focused on outcomes, such as past examples of similar projects and related, as well as transferable skills.
Once your job descriptions are optimized, make it a priority to go beyond traditional sourcing methods like university partnerships and referrals. Post on diverse professional networks and job boards that support unbiased hiring practices.
4. Remove Bias From Your Selection Process
Anonymous or blind recruitment is one of the most known hiring practices that you can incorporate into your screening process to eliminate early biases. By sorting resumes without visible demographic information such as name, hometown, nationality, or age, hiring managers can focus on evaluating candidates based on their skills required for the job.
A standardized interview process is another great way to reduce bias in your selection flow and give equal chances to all your applicants. Before you set your interview questions and exercises in stone, audit their relevance to the role and separate requirements from preferences based on professionals fulfilling the role prior.
Use a standardized interview scorecard that serves as an additional independent data point besides materials received from candidates. Watch out for putting too much emphasis on body language cues that may put individuals from certain cultures or neurodiverse backgrounds at a disadvantage.
5. Be Clear On Your Hiring Policies
What works for one business might not work for another one. Some recruitment teams prefer to operate democratically and make hiring decisions based on consensus. Others aim to reduce their false negatives by appointing hiring managers to make a final, informed decision.
Some recruiters aim to increase organizational diversity by consciously selecting from underrepresented groups among their equally qualified candidates. Others choose to make the same decision among comparable candidates too.
Whatever approach you take, your selection criteria should support your diversity and equity goals and mirror your organizational values. It’s important to be consistent with your job requirements while also recognizing that minimizing bias is an ongoing learning process. Test out different strategies and listen to the feedback you receive from both candidates and employees of diverse backgrounds.
How Psychometric Assessments Help Avoid Hiring Biases
Besides equity initiatives and working on eliminating our own bias, technology can provide a much more efficient and unbiased solution to screening candidates. However, it’s important to choose wisely when it comes to automated solutions because they can easily backfire.
There are several digital tools (some using artificial intelligence) that aim to save time for hiring managers during their selection process. However, if they weren’t built with a scientific approach, they can recreate the same human biases that their creators carry and can actually lead to as many or more false negatives and false positives in selection.
For example, some recruitment software may filter resumes automatically based on a particular educational background or years of experience, thereby setting arbitrary selection criteria for candidates. So automating resume screening and saving time with the help of technology doesn’t necessarily mean being effective at making unbiased hiring decisions.
This is why we built our recruitment screening software, specifically designed to help recruiters remove bias from their hiring funnels and find the best talent for their open roles. We anonymize candidates for you and do not pick up data on gender, age, race, identity. At Gyfted, we are a team of cognitive psychologists, data scientists, and developers working together to revolutionize how hiring is done.
Here’s how our recruitment platform works. First, candidates in our database fill out a set of bias-free assessments created by our experts and receive their own personality feedback results. This helps everyone get immediate feedback and insights into their strengths. Recruiters are then able to review screened talent profiles based on reliable, bias-free information instead of biased demographic attributes or CVs. We showcase those strengths and career culture preferences of the candidates. Culture fit and culture add metrics (if these are completed at all and of interest) are also computed to add insights beyond any CV/HRTech tool. Skills are also accounted for in establishing general role fit, based on the skills needed for the job, and the trait preferences of the hiring manager (where the hiring manager or recruiter goes through an assessment of the ‘hypothetical’ hire they’re about to make, in order to help them understand better who they’re looking for). Ultimately, data and profiles have bias reduced, and no ‘system’ makes any decisions for the recruiter or hiring manager.
Evidence suggests that a robust combination of psychometric assessments works better than any stand-alone hiring method recruiters traditionally rely on. This method also enables reverse hiring where companies “apply” for hiring top candidates, thereby simplifying how recruitment is done and enabling a fair hiring process. The science-based algorithms of Gyfted’s sourcing tool analyze people objectively and leave the decision up to you regarding their fit.
By using our AI tool, you’ll be getting access to a growing pool of hidden talent from diverse backgrounds and their detailed psychological profiles. Our platform considers the personality traits, character, skills, experience, and growth potential of each candidate, as well as their compatibility with your team and company culture. It then suggests the best profiles for you based on your preferences.
You can set up your first job offer in less than 3 minutes and start receiving candidate suggestions in your inbox. Try our unbiased recruitment tool here.