Bias is a biological function of the brain present in all of us. It occurs when our brain makes quick assessments (200,000 times faster than the conscious mind!) and judgments of the world around us. As scientists say, it serves the purpose of clustering people into groups with similar traits, interests, or agendas. That means that bias helps us navigate the sea of information and possibilities without getting overwhelmed.
At the same time, however, bias can also be detrimental, especially in running a business. In the last week’s post, we discussed the most common types of bias that can emerge during the recruitment process. Unconscious bias can cause loss of revenue, talent, or face – as your employer branding may be badly affected.
Nowadays, more and more companies realize the importance of reducing bias. According to this paper, between August 2018 and August 2019, the number of job postings related to DEI (diversity, equity, and inclusion) increased by more than 25%. Are you one of those companies?
Here’s how it’s beneficial to your company to reduce bias.
1. Fight the talent shortage
We’re officially in the decade of a global talent shortage that will possibly result in as many as 85 million jobs going unfilled by 2030. It is, therefore the high time for your organization to make a talent strategy a priority – and reducing bias should be a part of it.
Gain & Retain
When you allow bias to creep into your recruitment process, you risk shrinking your possibilities or even missing on a great talent altogether.
Six out of ten recruiters stated they decide on a candidate’s suitability within the first 15 minutes. It’s impossible to guess how many great candidates get rejected within that time frame, but is it worth taking the risk?
Reducing bias means welcoming applicants regardless of their gender, age, or background. That way, you’ll create a larger, more diverse pool of talents to choose from. And when the talent pool is more extensive, you have a higher probability of finding the best people on the market, which is every recruiter’s goal.
Gaining new talents is undoubtedly crucial. However, what is equally – if not more – crucial is retaining the talent you already have. As we mentioned previously, losing a good employee can cost you as much as $30,000. Now, although collecting a paycheck is an important factor influencing whether an employee stays or leaves, it’s not the biggest one.
Following a 2017 Harvard study cited in this Forbes article, over 9% of the respondents reported noticing bias at their jobs. More alarmingly, 9% were three times more likely to say that they were planning to leave their company within the year. What if some of your employees share the sentiment?
In those difficult times of the talent hunt becoming more complex, creating the strategy to reduce bias in your organization is more than worth considering. It will help you amass bigger talent pools and, more importantly, keep the talent you’ve already found.
2. Make positive employer branding a necessity
People talk about your product, services, history, or the values you represent. In today’s highly competitive job market era, it’s of paramount importance to maintain and nourish a positive employer brand.
Employer branding is all about how you market yourself to potential job seekers. Hence, to get desired applicants, you should cater to their needs and values. Of course, branding consists of many factors such as the benefits you offer, the salary, etc. But one of the ways to tackle challenges connected to bias in the past years is through diversity.
Based on the data presented in this article, as much as 80% of the surveyed said that an employer’s stance on diversity and inclusion is an essential factor when deciding on whether they want to work for them or not.
That aligns perfectly with yet another report, this time a 2020 survey by Monster where 83% of Gen Z candidates claimed that it is vital for them to choose an employer with a solid commitment to diversity and inclusion.
Lack of bias is also crucial regarding your current employees. As mentioned in the previous point, retaining talent is as important as gaining the new one. Following the Forbes article, 9.2% of respondents who noticed a bias in their workplace were twice as likely not to feel proud to be working for their current employer. Now, we all know that if we don’t feel content about something – or someone – we’re not likely to talk about it positively.
And what happens when your employees are not satisfied with their boss and job in general? In the best-case scenario, they’re less likely to advertise you as an employer to others. This study by Coqual showed that eight out of ten respondents said they don’t refer other people to work at an organization where they noticed bias.
Fighting bias within your company structures sends a positive message. You show what you stand for and communicate that you’re welcoming to anyone out there. That makes you a reliable employer, which boosts your employer brand on the market. Send a positive message, and a positive response will follow.
3. Boost the performance & innovation
If there’s one thing every business is striving for, it’s high-class productivity. But if you thought that a high salary or an occasional bonus would assure that – you’re wrong. Dapulse conducted a survey asking 10,000 of its users a simple yet insightful question: what makes you happy at work?
The respondents were given eight options and were asked to rank them from the most important factor in their happiness to the least. The salary wasn’t even in the top 3. It came last. People need a certain amount of money to survive, yes. But once that basic need is satisfied, they need to fulfill their non-material needs. That feeling was reflected in the survey results.
What the respondents noted as making them most happy – hence more productive – were things like working for a company that was the best in its field, supported innovation, and had a culture they wanted to work in. And indeed, as data will show below, a company with present bias is not the culture people want nowadays. And what you shouldn’t want is employees who only do enough not to get fired.
Bias undermines team morale
68% of the respondents to this Deloitte survey stated that experiencing or witnessing bias in their workplace had a negative impact on their productivity. That’s an alarming number when you think about the possible consequences. If your employees see their colleagues experience bias, it undermines the whole team’s morale – and they probably lose respect for you, too. And the employees experiencing bias may lose confidence in their potential, in the end downsizing their career aspirations.
Another study found that discrimination or bias at work can have a detrimental effect on the well-being of your employees. They experience more frustration, stress, a sense of helplessness, and even feeling depressed. 75% of the surveyed said that a treatment like that had a significant impact on their engagement in what they do and the overall commitment to the organization.
Your workplace suffers through those sub-optimal contributions on many levels. The performance drops, your people lose faith in your organization, they don’t enjoy coming to work. People talk. And if they talk bad, it can negatively impact the employer brand, as we talked about before.
Performance peak, rather than a drop
Reducing bias in your company leads to more diversity. And it’s been proven by now that diverse companies work smarter.
This 2019 McKinsey report on diversity and inclusion found that companies in the top quartile for gender diversity were 25% more likely to have above-average profitability than companies in the 4th quartile (a 4% increase from the previous report). Regarding ethnic/cultural diversity, the report has shown that the top-quartile companies outperformed the ones in the 4th quartile y 36% (3% more than in the previous report).
A team of people with different backgrounds can provide a wider variety of perspectives and opinions, leading to finding even better and more innovative solutions to your company’s problems or challenges. Following the study conducted by Forbes, inclusion and workforce diversity is crucial driver of innovation within your organization and your growth.
Innovation is the key to delivering outstanding results. And unfortunately, bias stands in the way to achieving that goal. Following the findings from this Coqual study, 34% of the surveyed who noticed bias at work stated that they withheld new ideas and solutions in the past six months. Something your business shouldn’t be risking.
At the end of the day, having a team of people believing in what they do, standing strong together, and feeling happy in the workplace, that’s precisely what makes your business reach the peak of performance. Reducing bias on all levels of your organization has a significant impact on your employee’s well-being and your company’s performance.
4. Keep the money in your pocket
As mentioned in the previous point, bias causes your employees to be less engaged in the work they do. Based on the Gallup study quoted by Forbes, this phenomenon leads to direct money-loss for your business.
Disengaged employees have 37% higher absenteeism, 18% lower productivity, and 15% lower profitability.
To put those numbers into money, this costs you 34% of the annual salary of each disengaged employee, which rounds up to almost $16,000 per year for a single employee with an average wage. How many of such employees could your business handle in, say, a 10-year perspective?
Letting unconscious bias go unseen in your company can also expose your company to the risk of lawsuits that may very well financially cripple a business. In the U.S., federal compensatory and punitive damages alone can cost you as much as $300,000 per case, depending on the size of your organization.
For example, in 2015, Walmart fired their employee because of their disability. In July this year, a jury from Chicago closed the court case by returning a verdict in favour of the U.S. Equal Employment Opportunity Commission. The sum? A whopping $125 million in damages. Of course, Walmart is an example of a massive business, but at the end of the day, that’s what many companies aspire to be, right?
The bottom line is, bias costs you a lot of money, both directly and indirectly. Whether it’s by undermining your employer brand, causing your employees to be less engaged and productive, or – in the most extreme cases – by being sued. But it is essential to say that reducing bias is not only about the financial side. Everyone deserves an equal opportunity to get a meaningful work-life, regardless of race, nationality, gender, etc.
Changing a behaviour, you’re aware of is hard enough. But changing something you may not be aware of, like unconscious bias, is an entirely different story. The challenge of addressing bias in your workplace will be demanding but also very rewarding. There’s plenty of ways you could reduce bias, starting with your recruitment process – improving the interviewing process or applying case-based screening. The means are there; it’s all about reaching out for them.
By welcoming more diversity into your structures, you strengthen your employer branding, create bigger talent pools, and save money in the long run. Therefore, reducing bias is central to your company’s ability to develop among the competition.