The Measureable Value of Diversity and Inclusion

1 www.launchpadrecruits.com
THE MEASURABLE VALUE
OF DIVERSITY & INCLUSION
IN THE WORKPLACE

Introduction
What is Unconscious Bias?
The Business Case For
Diversity & Inclusivity
Technology’s Role in Fostering
Diversity & Inclusivity
Conclusions
IN THIS REPORT
03
08
12
20
24

3 www.launchpadrecruits.com© 2016 Launchpad. All rights reserved | May 2016
Diversity and inclusivity (D&I) in the workplace is one of the most
pressing and controversial topics in the business world today. This
subject receives extensive coverage nationally and internationally – but
are we simply paying it lip service? We explore the approach
organisations are taking to make an impact in this area, and consider
just how far they still need to shift.
Recent studies show there is a clear business upside to devoting energy and
resources to the pursuit of equality and inclusivity in the workplace. Indeed,
cultivating a diverse workforce isn’t just the right thing to do – it can help your bottom
line, create more productive and sought-after teams, reduce turnover and bolster
innovation. Rarely does a moral imperative have such tangible business benefits, and
yet this area still doesn’t get the attention or action it deserves.
Much of the diversity conversation has centred around the 2010 Equality Act and its
effects. Addressing “protected characteristics”, such as race, gender, religion, sexual
orientation and disability, the Act consolidates laws that had previously been
separate in order to give marginalised workers the highest degree of legal protection
possible.
THE MEASURABLE VALUE OF
DIVERSITY
& INCLUSION
IN THE WORKPLACE

But not all biases are so obvious to identify – the topic of “unconscious bias” has been
fervently discussed in nearly every industry for years. The idea is that the words and
actions of virtually every professional are unknowingly guided by deeply held
favouritisms, prejudices and preconceptions. While many are seemingly innocuous,
they can still have a demonstrable and negative impact on the organisation.
As you might imagine, these biases typically revolve around race, class
and gender – especially with regard to the ongoing wage gap and the
shortage of female workers in STEM (Science, Technology, Engineering
and Mathematics) related industries.
In response, governments and companies across the globe, including leading Silicon
Valley firms like Google and Facebook, have adopted active strategies to address both
conscious and unconscious bias in employment. Meanwhile, in the UK, similar
initiatives are helping push companies in the right direction, with many going to great
lengths to comply with laws like the Equality Act.
However, the issue of diversity and inclusivity is, at its best, a tricky one. Because of
the highly-subjective, often invisible nature of such biases, it’s exceedingly difficult for
HR professionals to actively address them, much less craft a coherent strategy to
neutralise their negative effects.
THE MEASURABLE VALUE OF
DIVERSITY
& INCLUSION
IN THE WORKPLACE

Frequently, racial bias is understood as a social issue, and not necessarily a business
one. If a resume is stellar, who cares whose name is at the top? Unfortunately,
research indicates that racial bias causes quality – even exceptional – applicants to be
regularly overlooked.
For example, a 2014 market research study conducted by John Nunley and his
colleagues at the University of Wisconsin tested racial hiring bias by sending out over
9,000 fictitious resumes to online job advertisements. Each advert received four
resumes with virtually identical qualifications, the only significant difference being a
“black sounding” or “white sounding” name attached.¹
All told, assumedly black candidates received 14% fewer callbacks or interview offers
than their equally matched, “white” counterparts. Significantly, that number
dramatically increased under the influence of one variable – when applying for
customer-facing roles, presumed black candidates received 28% fewer responses.
The team also found this disparity increased accordingly with the requisite
qualifications for a position – in other words, black candidates are most likely to be
discriminated against at the highest levels.
1 http://cla.auburn.edu/econwp/Archives/2014/2014-06.pdf
© 2016 Launchpad. All rights reserved | May 2016
RACIAL PREJUDICES

GENDER INEQUALITY
A 10-year study by the World Economic Forum indicates that, while the global average for
women’s annual earnings has seen a noticeable increase, it still sits well below that of their
male peers. From 2006 to 2015, the rate for women leaped from approximately £4K to £7.5K.
That seems like an impressive rate of growth – until you realise that the average earning for
men was £7.5K back in 2006, when the survey began. That number now stands at £14.5K,
nearly twice that of women.²
In the UK, according to the Office for National Statistics, the gender pay gap stands at 14.2%
for full-time work. This means that, in 2015, women effectively worked for free from
November 9th until the year-end close.³ When you factor in part-time work, the gap widens to
nearly 19.1%.
Surprisingly, among Britain’s highest earners, that gap widens to an astounding 55%,
according to the Trade Union Congress (TUC). TUC General Secretary Frances O’Grady recently
remarked, “It is shocking the UK still has such a large gender pay differences at the top of the
labour market after more than four decades of equal pay and sex discrimination legislation.”⁴
Interestingly, these biases seem to only exist among those who don’t interact with female
bosses directly. A massive 2013 UCLA study indicates that while almost half of professionals
strongly prefer male over female managers in theory, professionals aren’t likely to rate their
current boss more positively or negatively as a result of his or her gender.⁵
2 http://reports.weforum.org/global-gender-gap-report-2015/report-highlights/
3 http://www.theguardian.com/world/2015/nov/09/gender-pay-gap-women-working-free-until-end-of-years/
4 https://www.tuc.org.uk/equality-issues/gender-pay-gap-uk%E2%80%99s-top-earners-hits-55-says-tuc
5 http://hum.sagepub.com/content/64/12/1555.full.pdf+html
“It is shocking the UK still has such a
large gender pay differences at the
top of the labour market after more
than four decades of equal pay and
sex discrimination legislation.”
FRANCES O’GRADY
TUC GENERAL SECRETARY

CLASS DIVIDE
Socioeconomic discrimination is one of the most difficult biases to tackle because it
happens to be the least visible. And yet, the signs of relative advantage (or a lack
thereof) are all too clear – and they make an enormous difference.
According to research from the government’s Social Mobility and Child Poverty
Commission, class discrimination in hiring, especially among top firms, is widespread.
One central problem is that to enter elite organisations, applicants must pass a de-
facto “poshness” test – a judgement of character is necessary in order to ensure right
fit hires, but this particular strain routinely “exclude[s] youngsters who have the right
sort of grades and abilities but whose parents do not have the right sort of bank
balances,” according to Rt. Hon. Alan Milburn, Chair of the Commission.⁶
Similarly, graduates from Russell Group Schools, elite universities where students
disproportionately come from wealthy backgrounds, have a hiring rate of 9%, versus
the 3% of graduates countrywide.
But even as pernicious and unhelpful as class, gender and racial discriminations are,
they’re merely a few pieces of a much larger picture. There are actually hundreds of
other potentially destructive biases that must be countered in order to bolster
diversity and inclusivity within the workplace.
70% of last years’ job offers from top
law and services firms (providing
45,000 of the UK’s best jobs) were
given to students from selective state
or private, pay based institutions,
and who represent just 11% of the
population pool.
6 https://www.gov.uk/government/news/study-into-non-educational-barriers-to-top-jobs-published

WHAT IS
UNCONSCIOUS BIAS?
While the previously mentioned areas deserve ample attention in their
own right, the vast majority of unconscious biases that professionals
confront on a daily basis are far more subtle. They affect virtually every
decision we make, including who gets hired, who gets a raise, who
leads a team project and in whom you choose to place your trust.
Unconscious biases are the unwitting preferences we hold for some people over
others, based on deeply-ingrained social categorisations we unknowingly construct
throughout our lives.⁷ More than mere opinion, these categorisations have deep
neurological roots in the essential wiring of our brains.
In childhood, we learn to make associations between types of people and qualities –
perhaps we see older people as more frail, mothers as nurturing, young men as
assertive, etc. – and those categorisations morph and solidify as we age through
experience, media exposure and hearsay. Interestingly, we don’t have to even believe
these categorisations for them to affect us.An unconscious biological reaction can
take place in just 30 milliseconds.
7 http://www.enei.org.uk/data/files/EOR_Jan._13.pdf

WHAT IS
UNCONSCIOUS BIAS?
Neurologically, these unconscious biological reactions kick in a full 250 milliseconds
before conscious thought begins, and can take place in just 30 milliseconds.⁸ In fact,
we process about 200,000 times more information every second than we are
consciously aware of. This means our unconscious opinions don’t just influence our
actions – they actually hold more sway than our conscious reasoning.
Is this all bad? Not necessarily – unconscious thinking allows us to be the functioning,
social beings we are. And although our brains become less adept at altering these
categorisations as we age, they’re not set in stone.
Still, they dramatically impact our evaluations of people, leading us to cheer on
mediocre ideas as exceptional, and to write off exceptional ideas as dumb luck. It’s
often the case that supposedly well-reasoned hiring decisions are based purely on
intuition. And this illogical process of “feeling out” who deserves what can involve
many fallacies.
That’s a full 250 milliseconds before
conscious thought begins.
8 http://www.cipd.co.uk/NR/rdonlyres/666D7059-8516-4F1A-863F-7FE9ABD76ECC/0/ Reducingunconsciousbiasorganisationalresponses.pdf

TYPES OF
UNCONSCIOUS BIAS?
9 https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2570773/
10 http://gap.hks.harvard.edu/no-credit-where-credit-due-attributional-rationalization-women%E2%80%99s- success-male-female-teams
11 http://gender.stanford.edu/sites/default/files/motherhoodpenalty.pdf

TYPES OF
UNCONSCIOUS BIAS?
While the above biases are the most common in the workplace, there are hundreds
of other cognitive biases that affect our day-to-day reasoning. Other examples
include the “availability cascade”, which increases the likelihood we will believe in an
idea the more it is publicly repeated (even if it’s false); the “hard-easy” effect, which
causes us to be more confident in the results of difficult tasks, rather than easy ones;
and “loss aversion”, which causes people to be almost twice as likely to avoid losses
than accept gains.¹²
As difficult and unintuitive as it can be to address these biases, there is an important
reason why HR professionals must strive to overcome them: they directly impact a
business’ ability to deliver and reap the benefits of its people strategy. It may feel
most natural to hire and work with people with whom you readily identify, but this
mindset significantly hampers your ability to hone in on only the best and most
productive employees and ideas.
12 http://psych.fullerton.edu/mbirnbaum/psych466/articles/tversky_kahneman_jru_92.pdf

THE BUSINESS CASE
FOR DIVERSITY
AND INCLUSION

THE BUSINESS CASE
FOR DIVERSITY AND
INCLUSION
In essence, D&I in business means surrounding yourself and your team
with as broad a variety of opinions, backgrounds and experiences as
possible. Of course, businesses should strive for equal opportunity for
its own sake, but the path to such an achievement can often be unclear
– companies typically strive to hire the most effective candidates, so
shouldn’t meritocracy rule?
The reality is that it doesn’t, and managers must make a conscious effort to seek out
candidates with diverse backgrounds and ideas. The best way to do this is by
broadcasting a solid company culture and improving the candidate experience,
which, of course, begins with the recruitment process.
As it turns out, taking an active role in promoting diversity has tangible business
benefits – a solid D&I-minded recruitment strategy fosters intellectual diversity,
enhances productivity, increases company desirability and has been directly linked to
an increase in revenue. In fact, a recent American Sociological Association study
found that for every 1% increase in the rates of gender and cultural diversity within
an organisation, there is a 3% and 9% rise in sales, respectively.¹³
13 http://www.hrmagazine.co.uk/article-details/beyond-gender-diversity-dont-forget-the-tinted-ceiling

THE BUSINESS CASE
FOR DIVERSITY AND
INCLUSION
As a result, leading companies are realising that on-boarding as diverse a team as
possible isn’t just something managers should do – it’s something they must do in
order to stay competitive. And research bears out the fact that this is a very good
idea. In companies where employees feel this notion of D&I is well-represented,
workers demonstrate:
The results are particularly striking in organisations with diverse leadership teams.
Indeed, such companies had 53% higher earnings and returns on equity than non-
diverse teams. In the UK, this discrepancy was an astounding 66%.¹⁵
14 https://www.cebglobal.com/exbd/human-resources/corporate-leadership-council/diversity-and-inclusion/index. Page?
15 http://www.mckinsey.com/insights/organization/is_there_a_payoff_from_top-team_diversity

THE BUSINESS CASE
FOR DIVERSITY AND
INCLUSION
A similar study conducted by the Center for Talent Innovation found that at
companies with diverse leadership, employees report they are:
This is likely why, in a Forbes study of 321 global enterprises with over $500 million
(£350 million) in annual revenue, 85% agreed or strongly agreed that diversity is
critical for fostering workplace innovation.¹⁸ This is exactly what Intel CEO Brian
Krzanich means when he says that “a fully diverse and inclusive workplace is
fundamental to how we deliver business results.”¹⁹
16 http://www.talentinnovation.org/publication.cfm?publication=1400
17 http://asr.sagepub.com/content/74/2/208.short
18 http://images.forbes.com/forbesinsights/StudyPDFs/Innovation_Through_Diversity.pdf
19 http://www.forbes.com/sites/larrymagid/2015/06/09/intel-capital-investing-125-million-in-businesses-led-by- women-and-minorities/

A 1% rise in a workforce’
s gender and cultural
diversity results in a 3%
rise in sales and a 9%
rise in revenue.
American Sociological Association survey

WHAT’S BEING DONE
ALREADY?
As a direct result, global business leaders like Facebook and Google are taking
proactive steps to counter conscious and unconscious bias to foster a more diverse,
innovative workplace.
In mid-2014, many large companies began to openly disclose their diversity
information, numbers that were once thought to be a guarded trade secret. The
results were fairly grim:
Google was 61% white and 70% male, Apple was 72% homogeneous
within its executive leadership roles, Asian males were over-
represented across the board and nearly all companies showed
abysmal numbers for women, black and Hispanic employees.
In the face of intense public scrutiny, compounded by the realisation that being more
inclusive of gender, race and disabilities would provide access to a wider pool of
talent, these companies unveiled massive programs designed to uncover and combat
unconscious bias. More than 26,000 employees have since taken part in Google’s
unconscious bias workshops – Facebook’s series of bias management videos and
recommended strategies have been extremely popular as well.
In 2014, 61% of Google’s workforce
was white.
70% of Google’s workforce was
male.

WHAT’S BEING DONE
ALREADY?
Since then, a £5.5 billion-per-year diversity training industry has emerged, each
consultant and tech start up therein striving to help counteract workplace bias and
ensure equitable hiring practices for paying customers.²⁰ It’s become nearly a
mandate for visible companies to take part.
Implicit bias tests, such at Harvard’s Project Implicit (we encourage you to take it),
have become a foundation of this movement – they assess how rapidly and readily
participants associate certain groups with either positive or negative words.
70% of respondents, regardless of background, race or gender, more
closely associate men with “careers” and women with “family” – 76%
have an implicit preference for white people over black people.
If everyone has unconscious biases in some way, shape or form, all professionals can
candidly admit this and take steps to remedy the situation. Given the demonstrated
failure of diversity programs in past decades, this big leap has been gaining a lot of
steam in recent years.²¹
Apple was 72% homogenous within
its executive leadership roles.
20 http://www.forbes.com/sites/ellenhuet/2015/11/02/rise-of-the-bias-busters-how-unconscious-bias-became-silicon- valleys-newest-target/
21 http://static1.squarespace.com/static/5186d08fe4b065e39b45b91e/t/51e3234ce4b0c8784c9e4a ae/1373840204345/Paluck_Green_AnnRev_2009.pdf

HOW’S IT GOING FOR
THEM SO FAR?
But for all the excitement, the results have been mixed. Despite thundering PR campaigns and
public releases of training programs, diversity at leading tech companies such as Google and
Facebook has remained steadfastly dismal.²² Amazon currently leads the pack with a 37%
female workforce, a figure that isn’t exactly impressive.
Chief among the concerns of addressing unconscious bias is the inherent contradiction in
trying to train something that is, by definition, uncontrollable.²³ It’s also impossible to chart
the success of these programs without clear data trends – because of the relative newness of
such techniques for addressing unconscious, there aren’t yet clear results suggesting they’re
effective. While the conversation surrounding diversity has markedly improved, the tangible
benefits of unconscious bias training are still uncertain.
What’s worse, recent research from a team at Washington University in St. Louis suggests that
spreading awareness about unconscious bias actually promotes stereotyping.²⁴ Paradoxically,
if people know everyone else is biased too, there’s less shame in acting out on those impulses.
Where politeness and social fear may have once kept people’s mouths shut, anyone can now
follow a blunder with, “Hey, we’re all like this, and I’m doing my best to learn.” As one of the
studies authors, Melissa Thomas-Hunt, put it: “People tend to do whatever other people are
doing.”
Nonetheless, we can’t pretend that a surging international conversation surrounding diversity,
bias and inclusivity is not productive. For companies striving to improve diversity and promote
cross-pollinated discussion, the law and social discourse is on their side – determined action
and self-reflective critiques will gradually produce a more diverse, invigorated workforce. One
area in particular, technology, is helping companies to do this across the board.
“People tend to do whatever other
people are doing.”
MELISSA THOMAS-HUNT
WASHINGTON UNIVERSITY, ST. LOUIS

TECHNOLOGY’S ROLE
IN FOSTERING
DIVERSITY &
INCLUSIVITY
In every way, the challenges of conscious and unconscious bias are
human problems – for just this reason, many companies are using
technology and rethinking their processes to eliminate personal biases
to the greatest extent possible. Where humans have trouble undoing
unconscious bias, systems can be designed to make the process more
fair.
While such reflection must obviously take place within every organisation, many managers
have seen rapid improvements applying these strategies to outward-facing operations –
namely, the hiring process. After all, a diverse workforce doesn’t just appear out of thin air.
And like an inclusive staff, recruitment strategies tend to work best when they draw upon a
variety of different perspectives.
The most popular step towards gaining objectivity has been to standardise the application
process. By creating discrete criteria that all applicants must meet for a certain job, recruiters
are prompted to deeply assess specific business qualities, rather than simply form an opinion
of an applicant. Companies can actually aggregate the scores of recruits – by tabling an
objective assessment, recruiters leave personal impressions at the door, and are much more
likely to select the most qualified hire.²⁵
22 http://www.theverge.com/2015/8/20/9179853/tech-diversity-scorecard-apple-google-microsoft-facebook-intel- twitter-amazon
23 http://diginomica.com/2015/09/18/what-i-learned-from-taking-facebooks-workplace-bias-course/#.Vf_B-
24 http://www.ncbi.nlm.nih.gov/pubmed/25314368
25 http://www.cipd.co.uk/NR/rdonlyres/666D7059-8516-4F1A-863F-7FE9ABD76ECC/0/ Reducingunconsciousbiasorganisationalresponses.pdf

TECHNOLOGY’S ROLE
IN FOSTERING
DIVERSITY &
INCLUSIVITY
In other words, the interview process should be goal-oriented: companies must know
exactly what they expect from a particular position so that recruits can be “selected
in”, rather than ruled out – the latter tends to be a harsher and more subjective
action. While Google has little to show for its diversity strategy, it has mastered the
art of the structured interview. By using a standardised interview and question rubric,
they allow the data to select the best candidates for them.²⁶ This can take some
getting used to – interviewers covet the ability to “spot” superstar recruits – but is by
far the most efficient and effective process in the long run.
In fact, many companies are using technology to identify and control biases against
characteristics like race, gender, age and even name. In this way, companies can
conduct blind interviews, where candidates are screened for qualifications alone.²⁷
Conducting a psychometric assessment alongside a structured interview is also
helpful to gauge personality and work-habit fit. To track and aggregate the progress
of candidates more broadly, companies use applicant tracking systems – they provide
crucial feedback on the kinds of results their processes produce, and allow recruiters
to screen candidates by keyword.
It’s often helpful to leverage this data to assess the tendencies of HR staff themselves
– do certain individuals or processes tend to yield biased results? Are our recent hires
the best possible fits, both experientially and socially, for our organisation?
26 http://www.wired.com/2015/04/hire-like-google/
27 http://www.hrgrapevine.com/markets/hr/article/2015-11-18-how-technology-can-help-recruiters-overcome- unconscious-bias

TECHNOLOGY’S ROLE
IN FOSTERING
DIVERSITY &
INCLUSIVITY
Using this data, companies can make informed, data-led decisions in key areas of
their people strategy, which, in turn, will have a direct positive impact on business
performance.
Of course, interviews will always be a necessity. But as it turns out, the location,
timing and setting of an interview largely determine how biased a given interviewer
will be. As a 2015 CIPD report indicates, interviewers tend to be particularly “sloppy”
and prone to snap judgements during times of mental fatigue or high “cognitive
load.” The result is that, after multiple interviews, hiring managers are prone to
relying on preconceptions to make decisions, rather than facts.²⁸
The remedy to this is twofold: the primary purpose of initial interviews should be to
gather information, not make decisions, and the interview process should not be
rushed – or at least spread out over several days. Technology can provide the ideal
framework to manage processes, maintain consistency and provide an essential audit
trail.
Adopting multiple forms of tech also allows companies to reach a broader
demographic, in effect catering the hiring process to the needs of a more diverse
applicant pool. By incorporating mobile services and engaging in social media,
companies can make it far easier for candidates otherwise limited by location to
apply. Better yet, managers can track the location and impact of any social media or
hiring campaigns.
The primary purpose of initial
interviews should be to gather
information, not make decisions.

TECHNOLOGY’S ROLE
IN FOSTERING
DIVERSITY &
INCLUSIVITY
More than anything, soliciting feedback from candidates – both with successful offers
and without – is invaluable to gaining better a better understanding of the candidate
experience. The more seamless and positive your process becomes, the better the
odds that more talented candidates from a wider range of backgrounds will come
your way.
Using these strategies, HR teams will have a clear sense of a candidate’s attitude,
experience, personal conduct and ability to perform well in their role by the time final
interviews roll around. The key to upending unconscious bias and making it a moot
point is to refine your strategy so you can select based upon merit alone. By defining
the qualities you seek, your enterprise can ensure that it attracts the most diverse
pool of qualified applicants possible.
The more seamless and positive your process becomes, the better the
odds that more talented candidates from a wider range of
backgrounds will come your way.
28 https://www.cipd.co.uk/binaries/a-head-for-hiring_2015-behavioural-science-of-recruitment-and-selection.pdf

CONCLUSIONS
Mike Ruddle, Managing Director of Capita’s Talent Consulting business
puts his finger on the nub of the issue: “The big question to ask is, are
we, as HR professionals, up to the challenge of changing our processes
to support this requirement?”
“It is clear,” Ruddle explains, ”that if we fail to take heed that we should place diversity and
inclusion at the centre of our policies and strategies we are likely to fail in our ambitions. And
we haven’t even mentioned the role of technology and big data in supporting collaborative,
flexible working practices or personalising talent management.”
Of course, some organisations are already making concerted efforts to address the area of
diversity and inclusivity. Claire England, Inclusivity Manager at Berwin Leighton Paisner,
explains:
“At BLP, diversity and inclusion is a strategic priority – we’re committed to creating an inclusive
and inspirational culture where all of our people are valued, motivated and able to be
themselves. This commitment was clearly illustrated by my appointment as Inclusivity
Manager in 2014, and since then, I have formed an Inclusivity steering Group with Partner-
Level representation to drive this agenda forwards – with the Managing Partner chairing this
committee. But I wonder if this is as firmly at the top of every law firms’ agenda.”

CONCLUSIONS
Indeed, as promising as the broader global trends are for ending workplace
discrimination and promoting greater diversity, we’re still witnessing many notable
shortfalls. It could be that we have our sights set much farther than where our feet lie
– as with any process, we should expect to make many mistakes before we find
lasting solutions through trial and experience. At the very least, conversations
surrounding D&I have blossomed, allowing companies in the UK and worldwide to
take a candid look at their current level of diversity and shape coherent strategies for
a more inclusive future.
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