May 21, 2021

Why Every Startup Needs a Diverse Hiring Strategy

Written by German Accelerator

Have you ever interviewed someone and in the first five minutes you’ve made an assessment of whether you could connect with this person? Or shortlisted a candidate that listed a hobby that you’re really passionate about, like hiking or yoga? You’re not alone. Bias greatly influences the way we make decisions and can skew our perceptions when it comes to making accurate assessments about others. This specifically harms diverse candidates, especially individuals that are the gender or race minority.

The film ‘Hidden Figures’ depicts (with a splash of drama) the realities of race and gender bias back in the 1960s, with an insight into the lives of three African-American female pioneers: Katherine Johnson, Dorothy Vaughan, and Mary Jackson, who were part of NASA’s team of human “computers” that enabled space heroes like Neil Armstrong, Alan Shepard, and John Glenn to travel safely to space. NASA has since honored these hidden figures by naming buildings and spacecraft after them. But how far have we really progressed since then in terms of throwing out gender, race, cultural, and even age-related biases, and how can we take steps to consciously build a diverse team? Furthermore, why is having a diverse team so important for companies to be successful?

Why It Matters

Let’s dive into why it matters. According to Elena Chow, German Accelerator mentor and founder of talent solutions consultancy ConnectOne, “Bias prevents us from making rational, logical and practical decisions. Cliche as it may sound, companies should milk the collective wisdom of as wide a range of brains/hearts/hands as possible. Diversity also means the team is not just the sum of its parts but much more.”

As highlighted by Elena, bias greatly impacts a team and the outcome it produces. Hiring diverse employees is an essential step to foster inclusion and encourage innovation. To stay competitive and innovative, companies need fresh perspectives and interdisciplinary thinking. This means attracting diverse talent on all levels, from junior to senior employees. Something easier said than done. Especially, when hiring mechanisms are built on attracting one specific type of candidate, generally putting most other candidates at a disadvantage from the start.

This is critical for companies to understand, particularly those looking to expand and grow in new locations. It is fundamental to address hiring bias as part of the expansion strategy and review if the current hiring mechanisms work in different countries and cultures (which they most likely won’t). In our chat with Elena, she mentioned that: “Generally, I see a preference for someone of their own culture as the first hire in a new market. That in itself goes against the concept of diversity. When questioned, many of them reason that they would be a better bridge to the headquarters. I often wonder how important that is versus the other skill sets required for their market expansion. Diversity begins from the top and if there is a lack of intention or discipline, it will only remain as lip service.”

On top of this, companies must also consider external brand and image questions. With the growing awareness around diversity and inclusion customers are also using their wallets to support brands that pay attention to diversity and inclusion (D&I). A recent study by #GAalumni quantilope on what U.S. consumers expect from brands in 2021 revealed that 50% would be more inclined to purchase from/use a brand when they address the topic of D&I. Gen Z, in particular, expects brands to have diverse senior leadership (53%) and are more likely to donate to organizations promoting D&I (47%).

Types of Heuristics & Bias That Affect The Hiring Process

To work against bias in the hiring process and attract diverse talent, we need to first understand the different types of bias that can occur. Below is a list of heuristics that can occur subconsciously in interview situations:

  • Confirmation bias: This is the tendency to make snap judgments and look for information that confirms your previously held beliefs. The interviewer may ask specific questions to validate their judgment.
  • Affect heuristics: Mental shortcuts based on current emotions.
  • Affinity bias: Choosing a candidate because we have something in common with them.
  • Anchoring bias: When the interviewer starts to rely too heavily on the initial or first piece of information they receive (an “anchoring” fact) and bases all following judgments and/or opinions on this given fact. So while they might sway from the original opinion, they only shift based on the original anchoring fact.
  • Halo bias: Similar to the anchoring bias, this bias refers to the tendency to allow our impression of a person, company, or business in one domain to influence our overall impression of the person or entity. So if a person went to Harvard, we will base all other impressions on this fact and our perceptions of Harvard.
  • Status quo bias: This bias influences an individual to try to keep things in their current state e.g. hiring people that are similar to the ones already in the company to keep things the same. This is one of the most problematic biases when it comes to diverse hiring and hiring for change and innovation.

Counteracting Bias In The Hiring Process

Now that we understand the types of bias, we wanted to know how one can counteract bias in the hiring process? And how can you create criteria that also allow for the equal assessment of non-traditional candidates (e.g. women who have left the workforce, interdisciplinary candidates, age, etc.)?

Let’s start with examining language in job descriptions and pre conceptualized ideas of what a candidate profile should look like. First, try to remove masculine gendered wording and replace it with neutral phrasing. Words such as rock star, aggressive, assertive, coding ninja, or outspoken can deter women and minorities from applying in the first place. With women commonly applying only when they meet 80-100% of the job description, this can be especially detrimental. To be even more inclusive, also aim to replace “his/her” with “their/they” pronouns. Here is a great resource to learn more about correct pronouns and why they matter. Keep in mind, male gendered job descriptions or job postings that reflect biases also send a signal to the external world on the overall company culture and what the work environment is like.

Moving on to resumes; they generally give the first impression of a candidate and determine whether the applicant even gets a chance to interview. A very basic practice that has already been implemented in the U.S. is that individuals do not include any personal information e.g. date of birth or a photo. This was initially introduced to prevent bias. Unfortunately, this has not gained a foothold everywhere, for example in Asia (generally) and in Germany, you still include a photo and date of birth. In both Germany and Asia you even include your marital status! It is up to the hiring manager to make a difference, so think about how the processes in your company can be optimized, and minimize the influence of bias from early on.

Finally, the interview situation itself. In our talk with Elena, she reinforced: “it all begins with awareness (start with why – why one needs to avoid biases during interviews) and then alignment on how to conduct the interview to avoid biases. It is important to align as some discipline is needed which may be uncomfortable initially for most people, especially when they have been interviewing in a certain style.” Elena’s advice on minimizing ‘voodoo hiring’ is to include a list of agreed critical factors to assess, for example, hard/soft skills, experience, etc., then develop a scorecard so that interview notes and scores can be tabulated consistently across all interviewers.

Top Tips for Founders

As we advise German startups to go international, one area is building an international team. So what are the top tips for founders that are new to hiring or are looking to hire more diversely?

Finally, even if many of these things seem like baby steps, every step companies take to become more inclusive and attract diverse candidates is a step in the right direction. For startups looking to expand, now is the perfect and crucial time to rethink and reshape hiring practices. When doing so, keep in mind the tips shared above to avoid hiring bias and you will be on your way to building an innovative, diverse, and strong team.

For those of you currently looking for jobs, check out our German Entrepreneurship Job Board with postings from our startups hiring in Germany and abroad.