Diversity and inclusion (D&I) increasingly are becoming a focus area for businesses. And it is not just because it is the right thing to do, but it also makes excellent business sense. According to McKinsey, the top quarter of companies on the diversity list were 33 percent more likely to be among the most profitable in their industries. Also, in the world of startups, diverse founding teams earn 30 percent higher returns for their investors.
Why is D&I important?
This is because it is an essential part of creating a best-in-class work environment and workforce. Talent management professionals recognize that a diverse and inclusive workforce is able to bring about new ways of thinking and more innovation, by combining different mindsets and backgrounds.
What are the gains from D&I?
Here is what an organization stands to gain with strong D&I efforts:
When organizations step up their efforts in these areas, their ability to innovate rises by 83 percent, their customer responsiveness by 31 percent, and the effectiveness of their team collaboration by 42 percent, as per research by Deloitte. Companies that rank at the top of racial diversity scales earn 15 times the revenue of those at the bottom, according to the American Sociological Association. Inclusive cultures bring thrice as good performance, six times as much innovation, and eight times as much likelihood of achieving a better outcome for the business. And for 64 percent of candidates, their decision to take on a job offer was significantly determined by diversity.
How important is the D&I issue?
For talent management systems, the most important issue these days is making the workplace more diverse and inclusive. This requires a focus on evaluating candidates as per their capabilities and putting any sort of bias out of the picture. Toward this end, artificial intelligence (AI) and machine learning (ML) are extremely useful tools that can be employed for identifying, recruiting, and hiring candidates solely based on how capable they are, and staying clear of all bias triggers.
What gets in the way of better D&I?
Talent management professionals find a diverse and inclusive workplace easier to talk about than to actually create. Bias is the biggest issue, exerting its effect on every stage of finding the right candidate. From talent attraction and hiring to career development and performance appraisal and many other stages, bias is always a factor. It can be seen in a desire to work only with those from a similar background, or to hire people with only one profile.
How does bias affect D&I?
Conscious and unconscious biases – also known as explicit and implicit stereotyping – negatively affect daily work life and formal employment decision-making. The following are examples of bias:
Why are traditional systems proving ineffective?
Traditional talent management systems place HR at the center of the workflow, not the candidate, and they rely on manual, siloed processes. Applicant tracking systems (ATSs) look less at candidate capabilities than at keywords in their profiles. Such systems, unfortunately, scale with the same biases and a reason for a success rate in hiring as low as 30 percent.
How can AI help to improve matters?
AI could be a great contributor to improving D&I efforts in hiring by companies around the world. This is how:
Is there anything to be concerned about?
For all its promise, AI in HR could increase or perpetuate bias in hiring and talent development, according to 23 percent of HR professionals responding to an IBM survey. This comes from the underlying data being collected by possibly biased humans, and the system perpetuating the same faults. Continuous testing and adjustment are the way ahead.
What are the most critical actions to take?
For talent management professionals looking to boost D&I efforts, it is important to create systems leveraging the right expertise. Standardized competency models and job descriptions can eliminate personal subjectivity. Of course, the data fed in must be high-quality and bias-free.