A new study by economist Soumitra Shukla (read here) provides insights into how neutral hiring practices can perpetuate inequality, using India’s caste system as a case study.
“Employer willingness to pay for an advantaged caste is as large as that for a full standard deviation increase in college GPA. In addition, eliminating the caste gap in each pre-college test score quantile closes only about 10% of the model-implied caste penalty, suggesting the need for policies that directly mitigate caste disparities.”
Takeaways
- Intentions ≠ Outcomes. The paper suggestions that well-intentioned policies, like quotas, can have complex effects.
- Subjectivity can be a problem. Decision-making processes that do not reduce the effects of bias can become sources of disparity.
- The Revelation Paradox. The more information revealed about a person’s background, the more opportunity there is for bias to enter decision-making. Structured, skills-based assessments may lead to more equitable outcomes than subjective ones.
- Focus over general approaches to diversity. If you want to diversify your workforce, consider focused efforts to attract underrepresented talent. Keep an open mind about what’s underrepresented.
- Consider the system. Don’t assume that because you may have removed an education requirement, your pipeline has become more equitable. Consider the entire pipeline when designing interventions to promote equity.
- Mind the gap. Critical insights about a hiring process often lie in the transitions between states, not just the overall outcomes. Measure what’s happening between stages to optimize for maximum equity (see my definition below).
- Intervention Complexity Principle. Hiring interventions aimed at increasing equitable outcomes in complex social systems can have non-linear and counterintuitive effects — human societies are complicated. Approach any attempt to optimize for equity with humility, careful testing, and ongoing measurement.
My Ideas
Equity and diversity are hot topics, and I have contrarian views.
Diversity is everything we see and everything we can’t see. You can read about one perspective in – Scaling Talent Mass.
Equity, in this context, only means the absence of systematic disadvantages based on a person’s background when other factors (like education or qualifications) might be similar.
I believe that if you want more returns from your human capital, then diversify your stock of talent. Don’t concentrate your human capital in one way/pedigree, vary and enjoy the gains from trading with many different types of talent.
To do that, you must develop a mindset that is open. In fact, I argue, you must go out of your way to find talent that others (less open managers) overlook! Further, you must insure your hiring processes is optimized to maximize finding new and overlooked talent.
Talent Revolution 