Bias is a disproportionate weight in favour of or against an idea or thing, usually in a way considered to be unfair.
Bias in hiring (which often props up within interviewing and assessing) affects the decisions being made and which candidates are hired. It can stem from informal interview processes, too much focus on reducing time and cost per hire and by making hiring decisions based on the gut instincts of interviewers. Bias in hiring leads to the wrong people being hired and a continual lack of diversity, equity and inclusion in companies.
In this article, we look at how bias in hiring affect businesses.
Lack of diversity and wrong hires are important issues: people are a company’s greatest asset. And employees and the teams they compose play a vital role in the success of a business.
Therefore, companies should be investing in their people and teams to ensure their success, with the majority focusing on attracting, identifying and hiring the best people for the job. However, this can be a potentially costly challenge when the best people for the job get overlooked due to bias.
Why bias in hiring should be addressed
Better employee engagement, more innovative and creative problem solving and greater understanding of target markets are just a small selection of the many reasons why diversity is a strategic advantage for those companies who are focusing on it. This is before even looking at the increased financial returns that have also been attributed to companies with better gender and ethnic diversity, 15% and 35% respectively in 2015, from a McKinsey report. Conversely, there is he additional cost of not addressing this issue, with a 2020 study by CitiGroup showing that racism and inequality in the US has cost the economy $16tn over the last 20 years.
For those still not sold on how vital diversity is, there is also the fact that the cost of hiring the wrong candidate, regardless of demographic, can be up to $250k, with some estimates putting this at 30% of that employee’s annual salary. This is a huge amount of cost, as well as the time cost and further effects on employee engagement, productivity and creativity. However, it may be more difficult to find the right candidates to fill these gaps if there is already a lack of diversity and inclusion, as a study from Glassdoor showed that 67% of candidates want to work for companies with a diverse workforce.
So not only are companies incurring costs from hiring the wrong candidates, their lack of action in addressing diversity, equity and inclusion is affecting their ability to succeed in the long run.
Fairness in the hiring process is a good starting point, giving each candidate an equal opportunity to demonstrate their skills, abilities and why they would be right for the role and the company. By basing hiring on this, the best candidates will be hired and diversity will be improved, as there is no reason why demographics should impact their ability to perform a role.
This creates a clear strategic advantage, as was proven during the last global recession in 2008, when research from Devah Pager showed that companies with fair hiring practices in place were twice as likely to survive. Her research showed that the percentage of companies who went out of business due to biased hiring practices rose from 17% to 36.4%.
Clearly there is a strong reason to make sure that hiring is fair, in order to improve diversity in the workplace. One of the most effective approaches for this is to focus on reducing bias in the hiring and interview process and there are different ways in which to do this.
Companies spend a lot of time and money on creating frameworks, materials and questions that will allow them to identify the best candidates, and this structure has been shown to still be one of the most effective and fair ways to predict success. Unstructured interviews and intuition alone are not going to succeed in the long run.
A Lazlo Bock quote on the use of structured interviews at Google shows why this is one of the most effective ways to hire:
“Structured interviews are predictive even for jobs that are themselves unstructured. We’ve also found that they cause both candidates and interviewers to have a better experience and are perceived to be most fair. So why don’t more companies use them? Well, they are hard to develop: You have to write them, test them, and make sure interviewers stick to them. And then you have to continuously refresh them so candidates don’t compare notes and come prepared with all the answers. It’s a lot of work, but the alternative is to waste everyone’s time with a typical interview that is either highly subjective, or discriminatory, or both.”
This structure is best formalised through the use of interview frameworks. There are several common interview frameworks that can be used, such as competencies, strengths, values, or behaviours, with each one having pros and cons. Read more about the types of frameworks in the Equitas Remote Hiring Guide.
Whichever type of framework is being used, it is still important to tailor the framework and questions to meet the requirements of the role being hired for. This does not mean that all personality from an interview is lost, it can still be a two-way conversation, but it is very focused, structured and consistent to ensure fairness for everyone.
Despite having this structure, the hiring process should not necessarily be identical for each candidate; companies need to be inclusive in their approach and ensure any reasonable requirements are met. However, it does need to be as similar as possible in order to create data that can then be analysed, compared, and subsequently relied upon to make hiring decisions.
Creating this level playing field for all candidates can be challenging, with issues such as having several different interviewers, time constraints for an interview resulting in rushing the process, and informal interviews that are done by feel rather than relying on a structured and consistent process.
However, by providing equal opportunities to all through a consistent approach, candidates are being assessed for the right skills, knowledge, and experience required for the job, resulting in better hires that can add more value to a company.
With all of this structure and consistency, it can be difficult to actually focus on having an engaging conversation with candidates. Candidate engagement and experience are very important in attracting the best hires, but it can also elicit more in depth and better responses as candidates are more at ease and can give a more accurate representation of how well they fit the role.
In order to facilitate the interview to flow like a natural conversation without breaks, pauses or incessant note-taking or typing, technology can be used to automate parts of the process.
Evidence based decisions
One feature is to record the audio from the interview and use this as evidence to base scoring and hiring decisions from. Using this evidence from the answers given by the candidate, they are being assessed predominantly on their skills, expertise and experience.
Instead of this scoring being at a high level, each question area can also be broken down into detailed scoring indicators, to give a more accurate and quantitative score per question area. This makes it easier to benchmark candidates and select the best fit for your company.
To further reduce the risk of bias, especially affinity bias, a wide range of opinions should be used during an interview process. Having a diverse interview panel can have a huge impact on fairness, candidate experience and offer a range of perspectives and experiences when interviewing and selecting candidates.
Harnessing data to reduce bias
Beyond scoring, data can be used to analyse the performance of a company’s interview process. It’s difficult to know how an interview process is performing, where bias exists, or where other issues stop the best candidates from being hired.
But the costs of getting this wrong can be astronomical. That’s why it pays to analyse the process, identify what and where the issues are, and then determine the actions to mitigate them.
By analysing key performance indicators and demographic data areas where bias has occurred, or could occur in future, can also be identified. The insights this drives can then be used to continuously improve the hiring process to reduce bias and hire the best candidates.
What this means for candidates
Reducing bias in the interview and hiring process not only improves diversity, but it also increases the likelihood of hiring the best candidates for the job. When this is the case, these employees are more likely to be a good fit for the role, with greater job satisfaction and engagement, leading to them potentially adding more value to the company.
How engaging the candidate experience is can obviously have a large effect on whether candidates continue with the process or are still interested in accepting an offer. Candidates are also increasingly looking at a company’s diversity and inclusion to make their decisions, with the aforementioned 67% seeking a diverse workforce. Candidates can also assume that if a company is focusing on reducing bias or improving diversity, they clearly care about their workforce which could make it a better place to work. Therefore, having an engaging and fair hiring process helps to sell the company to the candidate, which is important in securing the best candidates as they have increasingly more job offers.
So why should you worry about bias? Because it can have a profound effect on your business, your teams and your ability to succeed. Fortunately there are steps and actions that can be taken to mitigate bias and ensure that the hiring process is as fair as possible, so that you can hire the best people and help to improve diversity, equity and inclusion in the workplace.
Ready to transform your hiring process and build more diverse workplaces? Equitas interview intelligence software helps you do just that. Get in touch to learn how to make a positive lasting changes, while boosting efficiency and saving time.