The FINANCIAL — Recent high-profile examples of hiring bias show that many industries have a long way to go when it comes to fair hiring practices.
In May, Seasons 52, a national restaurant chain, settled a lawsuit for $2.85 million that alleged job candidates 40 and older were discriminated against.
In July, FCC Chairman Ajit Pai proposed a plan to shift resources to enforcement of laws against hiring bias in the communications industry.
And many early hopes that artificial intelligence (AI) could “solve” hiring bias have been challenged by questions of algorithm bias.
Clearly, something is broken with the way many companies hire employees. And even world-class leaders are struggling to find the fix.
What businesses often overlook, even amid discrimination lawsuit payouts, is the cost of hiring people who aren’t the best fit for the job.
Here’s a radical idea: Hiring managers should hire the best people.
Even when companies address diversity and inclusion, that’s just the tip of a hiring bias iceberg.
Consider the typical job interview experience. Hiring managers — like all of us — struggle to avoid simple, seemingly harmless forms of bias. For example:
Framing bias: Choosing candidates based on the immediate context rather than the candidates themselves. For example, when pressured to fill a role, managers may hire a subpar candidate out of fear — seeing them as better than hiring no one.
Availability bias: Making a hiring decision based on what stood out most during an interview, good or bad, rather than performing a full evaluation and taking into account all aspects of a candidate.
Escalation of commitment bias: When a candidate fails to meet certain standards of a long, complex hiring process, a manager may think, “Well, we’ve come this far. We should probably just hire them anyway.”
On the other side of the interviewing table, much of the anxiety for job hunters comes from not knowing which hiring bias is going to be the one that keeps them from getting a job they are qualified for.
Candidates wonder, “What’s more important: my handshake, what I’m wearing or my alma mater? And why does any of that matter?”
According to Gallup, companies fail to choose the candidate with the right talent for management positions 82% of the time. That means organizations hire the best managers fewer than two out of 10 times.
Not only is that bad for business, it’s bad for workers because it creates pervasive feelings of confusion, unfairness and distrust about any hiring process.
Companies fail to choose the candidate with the right talent for management positions 82% of the time.
Business experience and the data agree: Picking the right person for a job is far more difficult than people realize.
The solution is to use a selection process that is fair and objective and that identifies true job-related talent — not just good interviewing skills.
Here’s the business case for talent-based assessments.
Using talent-based assessments for hiring not only helps minimize hiring bias, it also improves business performance:
Talented employees outperform others by a wide margin. Gallup has found that when organizations systematically select high-talent managers and individual contributors, they can see up to 33% higher revenue per employee.
When people do what they are good at, they find work enjoyable, engaging and rewarding — which leads to even higher productivity.
Hiring the best people for the job can improve nearly every measure of business health. When companies select the top 20% of candidates based on a scientific assessment, they realize 41% less absenteeism, 70% fewer safety incidents, 59% less turnover, 10% higher customer metrics, 17% higher productivity and 21% higher profitability.
But more importantly, scientifically valid hiring assessments remove subjective bias by narrowing your candidate pool to those who are objectively qualified for the role.
And a quality assessment tool is legally defensible because it shows no disparate impact for protected classes.
No system is perfect. But there’s a lot you can do to eliminate hiring bias, select better people and improve business performance — in other words, do the right thing.