A new report by The Conference Board, in collaboration with the Equality Action Center (EAC), underscores the significant risks posed by bias within business systems like hiring and performance evaluations. The report reveals that such biases can lead to high employee attrition rates and decreased productivity, costing companies up to 150% of an employee’s annual salary and reducing productivity by as much as 20%.
The report made clear that despite the growing focus on diversity, equity, and inclusion (DEI) in corporate America—with nearly $8 billion invested in corporate diversity training in 2020 and expected to double by 2026—most companies lack the metrics needed to assess the effectiveness of their DEI programs.
“Addressing bias that is embedded within a business’s systems and processes can seem like—and often is—a daunting task. Companies can move the needle in a meaningful way 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,” said Diana Scott, US Human Capital Center Leader at The Conference Board.
The report outlined how companies can tackle workplace discrimination using the ‘Bias Interrupters’ framework, developed through a two-year project by EAC and The Conference Board. Funded by a Walmart grant, this framework was applied to the systems and processes of select members of The Conference Board Human Capital Center. The study demonstrates how Bias Interrupters can improve hiring processes, performance evaluations, and access to career-enhancing work.
“The good news is that Bias Interrupters not only help businesses make year-over-year progress towards their inclusion goals; they also are the best way to control for legal risk,” said EAC Director Joan C. Williams, a law professor at University of California Law SF.
Key Findings from the Report
- Business Case for Bias Interrupters: Addressing workplace bias can significantly reduce attrition costs and increase productivity.
- Financial Impact of Bias: Bias-induced attrition can cost up to 150% of an employee’s annual salary, while decreased employee engagement can reduce productivity by 20%.
- Investment in DEI: US corporations spent almost $8 billion on diversity training in 2020, with investments expected to more than double by 2026. However, many companies lack metrics to assess these programs’ effectiveness.
- Effectiveness of Traditional Diversity Training: Traditional DEI workshops often fail to interrupt systemic bias, unlike the Bias Interrupters framework.
Successful Applications of Bias Interrupters
- Hiring Process: Metrics such as tracking applicant sources, resume reviews, and interview stages can help identify and correct bias, resulting in a 6-percentage point increase in job offers to men of color.
- Performance Evaluations: Developing specific competency criteria leads to fairer, evidence-based feedback, with increases of 44-52 percentage points.
- Access to Opportunities: Tracking and correcting bias in career-enhancing work and non-promotable tasks, such as “office housework,” resulted in the elimination of bias against women and women of color in these areas.
