Barriers to Attracting and Hiring a Diverse Workforce
A diverse workforce has immediate and tangible benefits for all organizations – including their bottom line. Data shows that diverse organizations are both more innovative and more productive. A recent McKinsey study showed that American companies with diverse executive boards had a 95% higher return on equity than those whose boards were more homogenous. A Deloitte report published several years ago showed that when employees feel included, innovation increases by 83%.
Many organizations are becoming more sensitized to the importance and benefits of having a diverse and inclusive workforce. However, not all have adjusted their hiring practices to avoid the pitfalls of excluding potential applicants because of archaic or short-sighted recruiting and screening procedures that may limit the applicant pool for any given position. What are some of the mistakes companies and hiring managers make that impact their ability to identify and recruit diverse talent?
1. Relying on Employee Referrals
Although employees may not do this on purpose, people tend to refer others that are similar to themselves. If you already have a diverse workforce, this may not be an issue. However, if your workforce is not diverse, an employee referral system can unfortunately perpetuate your lack of diversity and inclusion. The potential for systemic discrimination can increase as a result.
2. Considering Only Candidates That Are Currently Employed
Some hiring managers erroneously believe that currently-employed individuals are more hard-working and have more up-to-date job skills. The reality is that there are lots of terrific candidates available that are unemployed through no fault of their own – especially as a result of recent pandemic-induced job losses. Considering only currently employed applicants can disproportionately affect women, minorities and older workers, who are typically most hurt by economic downturns.
3. Using Big Data or Algorithms
Some employers believe that by using various software to evaluate applications and resumes they can take subjectivity out of the applicant screening process. The formulas that are usually used in the software are frequently developed by taking into account the characteristics of successful vs. non-successful past and current employees. As a result, the software may point companies towards hiring people who are just like those they already employ.
4. Using “Customer Preference” in Selection
I was once passed over for a promotion and told that “our clients don’t like to talk to women.” Using customer preference to select or promote candidates – whether based on gender, race, age, or other protected characteristics – is another example of possible systemic discrimination outlined by the Equal Employment Opportunity Commission.
5. Utilizing “Tap on the Shoulder” Promotion Policies
Some organizations identify people internally for promotions to positions that are not advertised, assuming that people already within the company are “best qualified.” Promoting managers may unwittingly promote people like themselves with whom they are comfortable. Establishing a practice of posting all job openings and ensuring that all potential candidates have an opportunity to apply can help organizations avoid systemic discrimination.
6. Ignoring the “Elephant in the Room”
Candidates will notice when there is no diversity within an organization. They do their homework and visit a company’s web site in preparation for an interview. If your organization lacks diversity, address it head-on and discuss it as an issue that you are working to correct. Being honest and open with candidates about your diversity efforts will go a long away towards dispelling negative perceptions about your company and its culture.
7. Relying on Psychological Testing
Although proponents of psychological tests will argue that they are being used to avoid bias in hiring, data has shown that these assessments may actually screen out the very candidates that you are trying to hire. That’s because such tests often carry built-in biases that fail to account for cultural differences in how certain questions are interpreted. Standardized tests—from basic IQ tests to college placement exams like the SAT and ACT—have a long and documented history of embedded bias.
8. Limiting the Search Geographically
We are at an inflection point where our perspectives are often informed by where we live. For that reason, it’s important to look beyond your normal networks when you look to bring in new talent. If your company uses the same local hometown recruiter for all of your hires, consider hiring a firm from a different market to help tap into new pools of talent. Cast your net wider when looking for candidates.
9. Setting Minimum GPA Requirements
By setting minimum GPA requirements for early-career candidates, employers may be inadvertently creating a metric that hurts minority applicants. SHRM data suggests that minimum GPA requirements disproportionately hurt Black, Hispanic, and Native American candidates who are more likely to come from low-income households and work longer hours – which may cause GPAs to suffer.
10. Sourcing Candidates from the Same Select Schools
If your company focuses on the same group of select schools when doing campus recruiting, the pool of diverse candidates is significantly diminished. Expand your search to a wider array of colleges and universities and reach out to student chapters of professional organizations on campus to find diverse talent.
11. Offering Unpaid Internships
Low-income minority students cannot afford to take unpaid internships. Most rely on part-time or even full-time jobs to support their educational efforts. Frequently they don’t have the resources to travel to job locations without assistance provided by housing stipends or other financial support.
If your organization is truly committed to building a workforce that is diverse and inclusive, it’s time to take a look at your hiring processes. If you continue to do things the way you have always done them, you may be losing out on opportunities to attract new talent or overlook existing employees for key positions. Typical hiring practices may unintentionally lead to discrimination and systemic bias.
Liz Wessell, CEO of WayUp, summed it up best by saying: “Most employers think that the reason they aren’t hiring enough diverse people is because of a ‘top of funnel’ problem – not getting enough diverse applicants. However, in most cases, an equally big problem is the funnel itself, meaning they have parts of their hiring process and criteria that don’t bode well for underrepresented candidates.” Let’s all commit to doing better.