How Do You Scale a Diverse Company When Your Applicant Pool is All White?
When popular office communication app Slack released its diversity numbers in 2015, the industry wide self-awareness over the paltry representation of women and people in color was starting to become the new normal. Tech giants like Facebook and Google had each admitted to their own diversity hiring weak spots starting in 2014, but Slack’s announcement stood out because, unlike its Valley peers, its gains in diversity hiring were demonstrable. Though it only had a black workforce of 4%, 45% of managers at the company were female, and 41% of the company reported to female managers.
White male CEO Stewart Butterfield publicly owned up to the lack of diversity in the office and promised to push racially diverse hiring as strongly as he had advocated for women, a clever move to highlight Slack’s gains compared to its competitors, while owning up to places that the company could improve. Though Slack had less than 100 employees at the time, those promising numbers became the cornerstone of the breathy coverage given to their seeming upending of the diversity paradox facing today’s fastest growing companies.
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Yet a little over a year later, and the diversity unicorn mythology has worn off for Slack. An article run in Bloomberg last December, however, painted a very different picture: namely, one where Butterfield conceded that though he’d like to make diverse hiring a priority, the three months it took to hire a female manager of design came at a significant cost; he also regaled the magazine with an anecdote of not being able to find a single black woman with experience managing a team of 100, and said that the company was now pivoting to hiring young people of color so that companies like Slack might one day find a black woman with experience managing 100. Nonetheless, Bloomberg ran the article under the headline “Slack Makes Diversity a Priority While Quadrupling Headcount.”
When Slack released its latest diversity report last month, the stagnant growth of minorities and women turned those laudatory headlines into cautionary ones: even Slack, that had made diverse hiring a priority, had succumbed to the pitfalls of rapid growth and let diversity fall by the wayside. It wasn’t just the schadenfreude that made waves however; Slack had partnered with organizations like Code 2040 and Project Include to help make sure its hiring was as inclusive as possible. And if a company like Slack with its actual commitment to diverse hiring can’t reconcile growth and diversity, it’s time to acknowledge the elephant in the room. How do you scale a fast-growing business when your applicant pool is all white?
Hiring is one of the most pressing problems any organization faces, and hiring diverse candidates can often be written off as further layers of bureaucracy on an already time-consuming process. A 2016 study conducted by the Society for Human Resources Management found that the average company spends over $4000 per hire, and that the average hiring process takes 42 days - a process that, as Butterfield complained about, can stretch out even further when actively seeking out diverse recruits. Compound that with a startup that received a recent infusion of cash specifically for hiring, and willingly agreeing to a three-month hiring process can seem blasphemous.
But not having a diversity plan in place from day one can toxically permeate the culture of an organization over time. Uber’s unapologetic business ethos of working fast and breaking things earned it renegade bad boy status in its original years; a series of sexual harassment claims, fare scandals, and aggressive behavior from CEO Travis Kalanick have now shown that same attitude to be a toxic byproduct of the company’s culture. And even if boorishly bad behavior is a worst case scenario, a lack of diversity can create homogeneity that can kneecap companies both in the workplace and with customers.
“I think it’s realistic to set a goal that your company reflects the diversity of your potential customers and society,” says Liz Kofman, a sociologist who works at Unitive, a company that sells software to organizations to help eliminate bias from their hiring process. “It’s critically important to prioritize diversity from the beginning, because a lack of diversity can create a negative spiral. Referral hiring leads to homogenous hires, homogenous hires hire people like themselves, diverse talent is scared away from a homogenous team, repeat.”
Kofman concedes that at startups, homogenous hires can seem unavoidable. Fledgling startups often don’t have the name recognition or recruiting capabilities that larger companies can come with. And given the existing white male-centric homogeneity of the tech industry at present, the hiring pool can already be highly self-selecting towards white candidates. This is why Kofman has come up with a series of steps to help companies combat this internalized bias. Kofman says it’s “critically important” for companies to implement good hiring practices from the outset. “In some ways, being small makes it easier to have good hiring practices because there are fewer people to wrangle and less bureaucracy.”
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Rethink Referral Hiring
Falling into the trap of referral hiring is the number one landmine Kofman tells companies to avoid. “Referral hiring is inexpensive, but that doesn’t mean it’s good,” she says. Though it can be difficult to aggressively recruit the best talent on a new venture, studies have found that referral hiring doesn’t produce better candidates - as a 2014 study found, it simply turns up hires that are more likable. It can create bigger problems down the road as well - problems that directly contradict the view Slack’s Butterfield took, when stating that the antidote to having a black female head of engineering now was by creating jobs lower on the pipeline, so that future companies would have diverse, trained talent to pull from. As a 2016 study found, referral hiring very rarely helps minorities move ahead - in fact, the only demographic to see any increased mobility was a small percentage of black Americans.
Hold Regularly Scheduled Recruiting Drives
Since startups can’t abandon referral hiring outright, make it a company mission to prioritize diversity in recruiting. Kofman suggests hosting regularly scheduled, diversity-focused recruiting drives, so that existing employees are on the same page about why diversity is so important to the growing company. “Ask employees to specifically refer candidates from underrepresented groups,” says Kofman. “Award prizes. Be honest about why this is necessary, and spell out the extremely well-known benefits of diverse teams. Make the case to employees that proactively referring diverse talent is an important part of a well-balanced recruiting diet.”
By having diversity-focused recruiting drives, companies can eliminate the nebulous calculus that can occur when interviewing two candidates - one diverse, one not - and feeling conflicted because the non-diverse candidate has more experience. The “best person for the job” argument is one that can often derail conversations around workplace diversity, but by making diversity the primary focus of recruiting drives, the definitions of “best person for the job” can expand past our implicit biases.
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Build a Value Based Hiring Process
To further extricate bias from the hiring process, Kofman strongly recommends that companies have a structured hiring process - one that is firmly rooted in defining values - from day one, regardless of their size.
“Good hiring practices inherently mitigate bias. For small startups that are just getting started, I would begin with defining and hiring for values,” explains Kofman. “This has the double benefit of putting some structure into the hiring process and helping companies define ‘culture fit,’ which if left undefined and in the hands of rookie hiring managers can be a huge black hole of bias.” By defining company values and hiring for them, both recruiters and managers at all stages of the hiring process are held accountable to the same metrics, which eliminates a significant amount of confirmation bias that can occur from issues such as likeability in referral hiring.
Kofman offers a series of steps companies of all sizes can take. First, define three to five company values. Hire for those values every single time. Assign each interviewer values to evaluate, and use behavior-based interview questions, which can be found on Google or through software like Unitive’s, to evaluate for those values. Every single candidate should be asked the same exact question (“this kind of structure seems boring, but it leads to far more effective and far less biased hiring outcomes,” says Kofman), and those candidates should be scored on their ability to perform key skills required for the job, and whether they share the company’s values. Hiring managers should then be held accountable for all hiring decisions using this metric.
Though the process can seem unwieldy, Kofman points out that a smart hiring software like Unitive, or even a part-time HR consultant, can help fledgling companies navigate the hiring waters.
Look For Ways to Mitigate Implicit Bias
Even with a values-based hiring process, implicit bias can creep in - say, an unintentional proclivity towards Ivy League resumes over state school applicants. Having multiple interviewers throughout the recruiting process all using the same values-based metrics to assess candidates can reduce a significant amount of bias by averaging out data points, but finding other ways to preemptively alleviate bias can go a long way.
Kofman relies on blind resume review, where the names of applicants are scrubbed off of resumes before being presented to recruiters, to avoid the rampant bias that can occur towards applicants with ethnic-sounding names. Clear job descriptions that have also been combed over to eliminate bias makes the hiring process less opaque from the start. Making sure interviews stay structured and don’t devolve into conspiratorial small talk also helps keep the playing field equal in all metrics. And putting diverse hiring into focus as a solvable problem, rather than an elevated issue that will be monstrously challenging to tackle, can change a lot. Says Kofman, “I’ve seen companies that set aggressive goals that are far outside their industry standard meet them.”
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Solving the Problem When Train Leaves Station
What happens if you’ve already started hiring, and like Butterfield, realized that along the way, a lack of diversity has taken hold of your talent pool? Kofman says the solution lies in getting aggressive.
She encourages clients to identify where the biggest gaps exist in the hiring funnel, be it recruiting, job descriptions, phone screening, and so on, and then set aggressive goals to achieve diversity in all areas of the hiring funnel, with extra focus on problematic areas. Once those goals have been identified, she advises forming a diversity task force to implement them; a task force with clear stakes has been proven to be one of the most effective, yet least utilized, tactics to increase diversity, says Kofman. Once again, consider implementing diverse recruiting drives and go all out, including awarding prizes to employees and bonuses for hires. Hiring a diversity and inclusion consultant can further help identify areas for improvement, such as making sure the company website and all hiring materials are as inclusive as possible.
Think Long Term re: Client Makeup
When making your company goals and values, don’t just focus on the short term solution of getting more diverse bodies into the room. “Set a goal that your company reflects the diversity of your potential customers, as well as society,” says Kofman. She urges companies to put systems in place that encourage executive buy-in to the overall mission, so that the hiring process is always a thoughtful one tied to the company’s goals, rather than a static quota to be met. By focusing on the long-term, companies are also able to see the benefits of focusing on diversity, rather than viewing them as a costly impediment to short-term growth.
“You have to make diversity a priority though, which means you have to be willing to make trade-offs. Maybe you don’t have the fastest time-to-fill and you spend more on sourcing and HR software than other similarly sized startups,” says Kofman.
“But ultimately, hiring is so important, I think these trade-offs are completely worth it.”
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