Many believe that if we hire people of different nationality, race and gender, we have a diverse workplace. But just having a collection of people with different backgrounds, religions or sexual orientations in the mix does not mean that the team and the members in it will benefit from that mix. Diversity is not the same as inclusion.
Diversity vs. Inclusion
Why is inclusion so important? According to several studies, companies in the top quartile for racial and ethnic diversity are 35% more likely to have financial returns above their respective national industry medians1. Firms with female representation in top management had an average increase of $42 million in firm value2.
Yet women, who comprise 51% of population hold only 24% of the leadership roles and minorities, who make up 38% of population, have only 13% of the positions in leadership. One of the reasons this happens is because of unconscious bias, and that can be a bias against oneself, or against another.
An example of bias against oneself is demonstrated by the reality that men will apply for a job even if they only meet 60% of the qualifications. Women will only apply once they meet 100% of the qualifications.
Examples in hiring are numerous, but in one study, fictional male and female applicants responded to an ad. The responses were sent to female hiring managers who received resumes that showed that “Susan” matched 14 of the traits advertised as needed for the job and “Simon” only matched 6. Males doing the hiring were sent resumes in which “Susan” matched 6 of the desired traits and “Simon” matched 14.
When it came time for interviews, 62% of the hiring managers would bring Simon in for an interview and only 56% would bring in Susan. It didn’t matter if the person doing the hiring was male or female. This is a dramatic demonstration that, even if the woman is the most qualified statistically there is no chance she will be hired if she is the only woman in the pool. However, odds are eighty times greater if there are at least 2 women in the final pool.
This unconscious bias affects many other decisions made about people. It can affect communications, managing performance and career advancement, talent review and succession planning as well.
A study of performance reviews where people received critical feedback showed that 2% of men and 76% of women received negative feedback for personality traits. Interestingly, both male and female managers gave women more critical feedback than they gave men. Women exhibiting the same traits were called “emotional,” but men were labelled “passionate.”
Why Does this Matter?
Bias can have serious detrimental effects on a business by leading to ignoring or dismissing high-quality candidates and losing top talent to the competition. You can also miss out on innovative, out-of-the-box perspectives offered by people with different backgrounds and experience. It can also lead to decreased engagement, performance and productivity by current employees who see the lack of diversity and inclusion as well as decreased interest by future potential employees, who also see lack of diversity as a negative for the company.
How to Overcome Unconscious Bias
Recruitment and hiring: Increase local outreach (women, minorities, veterans). Ensure a mix of interviewers and have a diverse slate of candidates. Look for bias in job descriptions. Hire talent, not just experience.
Performance reviews: It’s important to consider different cultural styles and match diverse high potentials with an executive sponsor. Ensure performance is measurable where possible.
Retention: Make sure people get credit for their ideas and be careful not to ignore, dismiss, interrupt or talk over other. Build relationships with employees you don’t know much about.
Understand your role as a leader: Make it safe to take risks and empower team members to make decisions. Take advice and implement feedback—listen, talk, discuss and give actionable feedback. Share that credit.
Successful transitioning from diversity to inclusivity will take several steps. Don’t think of it as a sprint; think of it as a journey.
- Vivian Hunt, Dennis Layton, and Sara Prince. ‘Why diversity matters,’ McKinsey & Company, January 2015
- Business professors at University of Maryland and Columbia University studied the effect of gender diversity in the top firms in S&P’s Composite 1500 list. They examined the size and gender composition of firms' top management teams from 1992 - 2006 and then compared it to financial performance of the firms.