To find out how to interpret bias in recruitment, we also have a great eBook on inclusive hiring.

It’s the start of the football season in Australia, and I’ve been thinking about how damn hard it must be to coach. Every week you need to revise your game plan, pick the best team to get the match-up right and galvanise your players behind your decisions. You’re constantly adjusting your approach depending on who you are up against, picking different players to counter your opponent’s strengths.

I have heard it said by people who are more football savvy than me that the best coach is the one who can rid him/herself of biases at the decision point of picking the right players for the match.

The well-known Nobel Laureate behavioural economist, Dr Daniel Kahneman, made the same discovery when he first started to work in the space of ‘human decisioning’.

As a young psychologist in the 1950’s, he was tasked with figuring out which recruits to the army should be allocated to which units, infantry, air force etc. 

All the generals of those units strongly asserted that there was a different type for each unit, and they wanted to make allocations that reflected those differences. What Kahneman found over time was that there was no difference between the best soldiers in each part of the army. 

What he observed was the intrusion of the interviewer’s own intuition when interviewing for these roles. Expert judgments were less reliable than they thought. The right algorithms might have solved this.

Accuracy is not correlated with experience. We rely on heuristics, rules of thumb, mental models that rely on similarity with our own past experience. 

The more likely the individual in front of you looks like your mental model of the person you hired last time that “was a great (insert role)”, the more likely you are to see them as a great (insert role).

Confirmation bias is something we see every day in the stock market. A stock price increase does not mean a company is successful. These buying decisions are emotional, not rational. People decisions suffer from the same human frailty.

That’s why Nobel Laureates like Dr Daniel Kahneman and many smart HR leaders are recognising that the only way to interrupt our own biases is with the right technology.

We have candidates completing our text-based FirstInterview assessment every 2 minutes somewhere in the world. Through this we see data the trend towards mobile-first assessment experiences.

Analysing the behaviour of 41,314 candidates from March 2019 to March 2020, more than one third completed their assessment on mobile,  with applicants saving 40% or more on time to complete it on a mobile vs a desktop.

The Royal Commission has brought about a lot of scrutiny on the banks, and for good reason. But we have to give them credit where it’s due.

Compared to HR teams across the country, banks know a thing or two when it comes to managing risk.

Which is funny, as I’d argue that hiring a staff member is a much riskier proposition for a business than a bank having one of its customers default on a loan.

Imagine if your bank lent you money with the same process that your average recruiter used to hire for a role.

They would ask you to load all of your personal financial information into an exhaustive application form. Your salary, your weekly spend, your financial commitments. All of it.

The same form would include a lot of probing questions, such as:

• Will you pay this money back on time?
• When have you borrowed in the past and paid back on time?
• Describe a time that you struggled to repay a loan and what you did about it?

Then, assuming your form piqued their interest, they would bring you in for one on one meeting with the bank manager. That manager would grill you with a stern look, asking the same questions. This time though, they will be closely watching your eye movement to see if you were lying when you answered.

In each part of the process, you get a score, and then if that number is above a certain threshold, you get the loan.

It’s almost laughable, right?

Banks wouldn’t have any customers if they used that approach.

Only people who desperately need money would put themselves through that process. And they’re likely not the best loan candidates.

Banks work hard to attain incredibly high accuracy levels in assessing loan risk.

Meanwhile in HR, if you use turnover as a measure of hiring accuracy its as low as 30–50% per cent in some sectors. If you combine both turnover and performance data (how many people who get hired really raise a company’s performance), it might be even lower than that.

Banks wouldn’t exist if their risk accuracy was anywhere close to those numbers.

Well, that’s how most recruitment currently works — just usually involving more people.

There are more parallels here than you think.

Just like a bank manager, every recruiter wants to get it right and make the best decisions for the sake of their employer. As everyone in HR knows, hiring is one of the greatest risks a business can take on.

But they are making the highest risk decision for an organisation based on a set of hypotheses, assumptions and lots of imperfect data.

So, let’s flip the thought experiment.

What if a bank’s risk management department was running recruitment? What would the risk assessment look like?

Well, the process wouldn’t involve scanning CVs, a 10-minute phone call, a face to face interview and then a decision.

That would be way too expensive given exponentially more people apply for jobs than apply for loans each year. Not to mention the process itself is too subjective.

I suspect they would want objective proof points on what traits make a candidate successful in a role, data that matches the candidate against those proof points and finally, further cross-validation with other external sources.

They wouldn’t really care if you were white, Asian, gay female. How could you possibly generalise about someone’s gender, sexuality or ethnicity and use it as a lead indicator of hiring risk. (Yet, in HR this is still how we do it.)

Finally, they’d apply a layer of technology to the process. They would make it a positive customer experience for the candidates and with a mobile-first design. Much like a loan, you’ll lose your best customers if the funnel is long and exhaustive.

I’m not saying that banks are a beacon of business. The Royal Commission definitely showed otherwise. But for the most part, they have gotten with the times and upgraded their processes to better manage their risk. It’s time HR do the same.

Suggested Reading:

The CHRO Should Manage Bias Like the CFO Manages the Financials

What Job is HR Being Hired to do?

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