The Consequences

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Updated August 24, 2022
Technical Recruiting and Hiring

You’re reading an excerpt of The Holloway Guide to Technical Recruiting and Hiring, a book by Osman (Ozzie) Osman and over 45 other contributors. It is the most authoritative resource on growing software engineering teams effectively, written by and for hiring managers, recruiters, interviewers, and candidates. Purchase the book to support the author and the ad-free Holloway reading experience. You get instant digital access, over 800 links and references, commentary and future updates, and a high-quality PDF download.

Systemic bias and discrimination are a broad problem that affects not just recruiting and hiring, but also people’s willingness to remain in a given industry that does not represent them or treat them fairly. The Kapor Center’s landmark Tech Leavers Study reported in 2017 that nearly 40% of people who left the tech industry cited “unfairness or mistreatment” as the major reason they left, with men of color the most likely to leave due to mistreatment; 78% reported having experienced unfair treatment. In 2016, the departure rate for women was 41%—more than twice that of men, which was 17%.*

Underrepresented men and women of color experience stereotyping at twice the rate of their white and Asian peers, while LGBTQ+ tech leavers report bullying and public humiliation at significantly higher rates than other underrepresented groups. However, 62% of tech leavers said they would have stayed had their employer made efforts to create a more inclusive work environment.

Along with the negative consequences for candidates and employees, homogeneous and inequitable, unfair work environments also pose significant risks to organizations.* The Tech Leavers Study concluded that the industry stands to lose more than $16B per year in employee replacement costs.* Companies also may face backlash and negative brand associations for not dealing with potentially harmful features and unforeseen consequences of their products.*** For example, Facebook’s “real name” policy—which failed to realize the importance of privacy concerns of people from marginalized groups—was so controversial there’s an extensive Wikipedia page about it. When Twitter was in the running for acquisition, a number of potential buyers apparently balked at the company’s inability to deal with the harassment issues on its platform.

I observed a company of mostly white, affluent iPhone users delay shipping on Android because Android users reportedly earn less money, and later regretting the choice after discovering their Android users are more engaged. I’ve watched helplessly as another company used the data they collected on users in discriminatory ways, which not only erodes users’ trust but also the trust of the employees who have been subject to discrimination in their lives. If these teams were more diverse, especially among the leadership, I doubt the same choices would have been made.Leighton Wallace, engineering manager, Lever*

A dearth of diversity doesn’t just limit the number of innovative products companies can produce and the markets they can reach—it also poses serious risks to underrepresented populations. In 2015, Google was called out for racist image search results, a problem it has not solved. A recent study from the University of Georgia found that the technology used by self-driving cars may detect dark-skinned pedestrians less effectively than light-skinned ones. As Vox reports, this kind of “algorithmic bias” results from many factors, including sources of training data and homogenous technical research and product development teams. This has implications both for the kinds of tools and products we use as consumers and for the work environment of the people at those companies, as much as it impacts those companies’ ability to innovate and drive change.

Benefits and Opportunities

Anyone who owns a company or runs a hiring process has the power to help bridge the opportunity gap that has been created through years of institutional discrimination of marginalized groups. There are also countless advantages—to your company, to candidates, to your industry, and to your customers—to embracing and supporting diversity. The rules of business-building have changed. Building a technical product today requires enormous adaptability, creativity, and global reach—all of which improves with diversity.

Research extensively and consistently bears out that diversity positively correlates to better financial performance.* McKinsey has conducted some of the most robust, oft-cited studies on a direct correlation of diversity and better business outcomes. Among their findings: “Gender-diverse companies are 21% more likely to have better financial performance. Ethnically diverse companies are 33% more likely to financially outperform their counterparts.” A 2013 report by Harvard Business Review found that companies that had more diverse workforces were “45% likelier to report a growth in market share over the previous year and 70% likelier to report that the firm captured a new market.”* Researchers also found that more diverse companies announced, on average, two more products a year.*

In addition to correlational studies, diversity seems to have a causal relationship with innovation. Numerous psychology studies have shown that diverse teams shine a light on organizational blindspots, solve problems faster, and are more creative.** Diverse teams have the ability to see and solve problems that might otherwise be missed or mysterious, and increase returns for the business by doing so. In early 2019, Pinterest released a widely applauded inclusive search feature. Development was driven in large part by feedback from employees and diverse members of their customer base who were looking for beauty tips for a wide range of skin tones. When it comes to the business argument, the research is conclusive: diverse teams are more productive and effective at making decisions,* and diversity is markedly better for a company’s bottom line.

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