The Relationship Between Hiring Bias and Organizational Decline

Dec 16, 2021

Article written by William Tincup, Author at Recruiting Daily

The threat of bias in the hiring process is well-documented. More often than not, this bias isn’t immediately apparent but is rooted in unconscious behaviors among stakeholders. Drawing on the Vanderbilt University definition, unconscious or implicit bias stems from prejudice or otherwise unsupported judgments either for or against a person or group. What’s worse is that researchers believe this bias occurs automatically, as the brain makes snap decisions based on preconceived notions. In contrast, conscious or explicit bias stems from deliberate prejudices, with the brain reinforcing a known preference for one person or group over another.

These conscious and unconscious biases can take different forms in practice. Whether that means the hiring manager prefers the candidate who went to their alma mater or the company only wants to interview men, hiring biases limit diversity, causing not only legal jeopardy for your organization but likely also lower performance.

Understanding the effects

The impact of hiring bias isn’t felt all at once. There are both short-term and long-term ramifications, and one of the earliest is turnover. Going back to the alma mater example, the hiring manager chose someone they think is like them. But having comparable life experiences doesn’t necessarily equate to superior job fit, so basing the hiring decision on how similar the candidate is to the manager is not a great litmus test. As a result, this new hire’s tenure with the company might be short-lived.

Given that workers quit their jobs at record rates in 2021, the cost of turnover is more relevant than ever. It’s not unusual to spend thousands of dollars per hire, plus the cost of onboarding and subsequent loss of productivity when they exit early. All of this factors into an annual turnover rate that impacts the business’ bottom line.

Then, there is the challenge of the bad hires who stick around and what their presence means for other employees. SHRM recently released survey data that found that 53 percent of working Americans who left their jobs in the last five years did so because of workplace culture. Bad hires can be bad for many reasons – they might be unqualified, uninterested, or disengaged. The list goes on and on. But it doesn’t matter why they’re wrong so much as how they affect the people around them. Even in today’s hybrid and dispersed workplaces, an employee who doesn’t pull their own weight will often create headaches for others and drag down the entire team dynamic.

Addressing the problems

Acknowledging the relationship between bias and bad hires is only the first step. Each member of the recruiting team brings a unique perspective to the hiring process. These perspectives each come with their own biases, realized or not, and influence who gets the job – and who doesn’t. Fixing the problem involves a larger unlearning on the part of everyone involved, from top to bottom, sourcing to screening, interview to offer.

There are a few ways to get ahead of bias, and it starts with understanding. Looking at the available data will help illustrate the results of the existing process. Knowing who was hired, how, when, where, and why, plus what’s happened since they joined the company, can shed light on any glaring issues. Consider combining talent analytics with training key stakeholders (including hiring managers) and technologies that add consistency to improve candidate evaluation overall. Using such strategies helps identify the best people for the job, and as Gallup explained, “Hiring the best people for the job can improve nearly every measure of business health,” which is the very opposite of the harm caused by bad hires.

Training isn’t limited to diversity, equity, and inclusion work, although that’s also important. In this instance, training means teaching hiring teams how to remove bias from job descriptions, interview fairly, and spot bias in themselves and others. McKinsey even recommends appointing official “bias-watchers” who call out these behaviors in talent-related discussions.

Intelligent technologies, leveraging science, machine learning, and artificial intelligence, support a less biased process by introducing rigor to the evaluation stage with such tools as screening, interviews, and pre-hire assessments. Gallup found that “When companies select the top 20 percent of candidates based on scientific assessment, they realize 41 percent less absenteeism, 70 percent fewer safety incidents, 59 percent less turnover, 10 percent higher customer metrics, 17 percent higher productivity and 21 percent higher profitability.” These are all excellent things by most business standards.

The fact is that bias can lead even the greatest hiring teams astray. Once it does, the results will infiltrate the organization and wreak havoc along the way. Recognizing this, it’s possible to employ a proactive approach, take note of bias, and work to minimize its role with every hire. Doing so not only creates a fairer and more just world, it will inevitably help your company to perform better.