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Unconscious bias is hindering business growth and squeezing profit margins, suggests leading blue-chip recruitment firm

Organisational efforts to improve diversity are having limited effect, largely down to unconscious bias, according to a leading specialist recruitment firm.

Freshminds, an award-winning recruitment consultancy that provides UK and European businesses with top talent, says recent figures show that while positive strides have been made to utilise technology and bypass existing biases that affect hiring and promotion decisions, a noticeable disparity between the sexes persists and shows no sign of abating.

Last month, a report published by McKinsey found that those companies with a low proportion of female and ethnically diverse executives were 29% more likely to financially underperform than their competitors.

Patrick White, Innovation Manager at Freshminds, said: “Although it is galling for those who consider the moral case for diversity enough, the mounting evidence of diversity’s commercial impact has seen it move from the passion project of a few individuals to a boardroom and investor level business concern.

“But the challenge organisations seek to overcome is the element of unconscious bias in the recruitment process. In the US, $8 billion is spent by corporates on ‘diversity training’ to no observable effect. The use of technology to improve is vital, but better technology needs to be applied more thoughtfully.

Take the example of Numerical Reasoning Tests. “These aptitude tests are the gateway to most top graduate corporate jobs and are, as the name suggests, focused on an individual’s ability to perform a range of numerical calculations, using fractions, percentages, multiplication and conversions. They seem on the face of it, as unbiased as you can get, but that is not the case.

“The pass rates differ according to our data by between 7%-20% between men and women. This would be fine if that was a real reflection of differing abilities, but all the data and research shows it has far more to do with risk appetite and confidence levels. The maths GCSE gap for grades A and above is only 1.8% after all. What is happening in these tests?”

If only a quarter of your applicants are female, having 20% more wiped out for reasons that have no reflection on job suitability is obviously not great, and can affect the long term structural makeup of the organisation’s workforce. Patrick added: “A rethink of how applicants are tested is needed to ensure they are being assessed on the core competencies needed for the job.” 

Unconscious bias has become a prominent issue over the last few years, with organisations across all industry sectors recognising both the moral imperative and the business benefits of having a diverse workforce.

Since 2011, the number of all-male FTSE boards has dropped from 152 in 2011 to eight today, yet the number of women occupying senior management roles remains disappointingly low. It’s a similar situation when it comes to ethnic minorities.

Despite people from black, Asian and ethnic minority (BAME) backgrounds making up almost 13% of the UK population, just 6% of management jobs are held by ethnic minorities – at a cost of £24bn to the economy every year (source: Race in the Workplace).

“Although just one part of the picture, if we do not start getting cleverer about fair and useful screening at entry levels we are unlikely to ever see equitable representation at management levels,” said Patrick White.

“Crucially, for organisations to achieve an equitable outcome when it comes to the way they recruit and promote applicants, they must test for what is relevant – unless of course the employer really does just want to know how good the candidate is at performing numerical reasoning tests.”

It is this element of the recruiting process that Freshminds will seek to overcome with the launch of their upcoming advanced Testing platform, Mapped. 

Mapped is an advanced testing platform built from the ground up to test candidates analytical skills fairly and rigorously. It’s built in partnership with Applied, a platform for fair hiring, and the first technology spin off from the Behavioural Insights Team.