Bias in hiring, performance evaluations can derail corporate DEI goals

Bias in certain aspects of business — such as hiring, performance evaluations and access to opportunities — can pose significant risks to companies, The Conference Board and Equality Action Center found. According to a new report, bias can derail a business’ productivity, finances and diversity, equity and inclusion (DEI) goals.

A more effective way to do business

The Conference Board outlined its findings on the expensive nature of bias. The firm noted that it can cause high attrition rates, with expenses adding up to 150% of an employee’s annual salary. Bias can also decrease employee engagement and reduce productivity.

Notably, DEI goals have become more prominent in recent years, with companies investing nearly $8 billion in corporate diversity training in 2020, according to a 2021 study by Global Industry Analysts. While investments are projected to double by 2026, most companies don’t have metrics to assess program effectiveness, researchers found. 

Using quantitative — and qualitative — data to track employee success was a key solution highlighted in The Conference Board’s report. This is crucial because researchers found that traditional diversity training — such as DEI workshops — can be impactful to some degree, but it can’t interrupt the biases built into business systems.

Solving the issue

Addressing bias is often “ a daunting task,” Diana Scott, leader of the U.S. Human Capital Center at The Conference Board, said in a statement. But companies can tackle it effectively, she said, “by treating it like any other business challenge: analyze the data, understand the problem, plan interventions and course corrections, assess the results, and evaluate progress.” 

The report outlined a “Bias Interrupters” framework to address workplace discrimination and bolster DEI goals:

Use metrics. Teach the workforce what bias looks like. Address bias within business systems.

The report also included the results of applying that framework among members of its Human Capital Center over a two-year period.

Best practices in action

In the hiring process, for instance, interrupting bias helped companies select the most qualified candidates by tracking metrics and determining where candidates fell out of the hiring funnel. 

Within a few months of following the framework, companies increased job offers to men of color by six percentage points.

In performance evaluations, interrupting bias led to higher-quality and fairer evaluations with the development of specific competency criteria, including evidence-based and action-oriented feedback. 

By following the framework, companies increased evidence-based feedback by about 44 to 52 percentage points.

Looking ahead in an anti-DEI climate

At the moment, DEI faces a “delicate and uncomfortable environment,” several attorney panelists said at the Society for Human Resource Management’s annual conference in June. Following the U.S. Supreme Court’s college admissions decision, public backlash has drawn tension between the business case for DEI and the country’s shifting dynamics, they said.