Closing the wealth gap can start in the hiring process

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Effectively hiring and retaining top talent is a company’s most imperative challenge, yet many struggle when it comes to diversity. Given that diverse teams deliver superior financial returns, it’s not surprising that companies are spending heavily on diversity initiatives. Surprisingly, these efforts are most often of no avail.

The murder of George Floyd brought increased attention to continued employment racial inequity and its impact on the Black-white wealth gap. Despite the emphasis on low-wage workers and the need for upskilling, discriminatory economic systems impact the entire spectrum of Black employees, including the highly educated.

Opportunities to contribute to and benefit from innovation and advancements in technologies—and thus building wealth in high-value-added industries and occupations—are limited for Black people. The solutions to this aspect of the wealth gap lie in understanding and addressing the ways in which biases and system-level flaws reduce diversity and the advancement of Black candidates across all employment levels.

For many Black households, the idea that you have to be more educated/credentialed and work twice as hard to get similar outcomes has become a cultural norm. For my parents, Nigerian immigrants who came to the U.S. to advance their studies, education was the key to unlocking wealth and opportunity. Despite founding an impactful tutoring company while managing a law firm’s operations and graduating undergrad and business school among the top of my class from leading institutions, UCLA and USC, respectively, I still initially struggled in the recruiting process. I was a living representation of Black women being the most highly educated demographic being offered less.

The barriers that I and other Black/minority job candidates face in the job market cannot be solved by companies declaring their commitment to diversity. Even well-intentioned companies struggle to effectively hire more diverse candidates for three system-level reasons:

  1. Often disguised as a pipeline issue, limited time and resources restrict the breadth of sources from which companies recruit. This limits the number of minority candidates that ever enter a company’s top-of-funnel pipeline. For instance, when it comes to highly sought-after Black business candidates, sources such as top MBA programs or historically Black colleges and universities, or HBCUs, and premiere diversity organizations such as The Consortium or Management Leaders of Tomorrow become the go-to channels. While these organizations are critical to advancing underrepresented candidates, their candidate pools are finite by nature and are where most major organizations and their competitors seek diverse talent. This isn’t a pipeline issue. It’s a channel issue.
  2. The No. 1 criteria for hiring is a “proven ability to perform.” Yet companies use candidate-generated résumés with certain keywords or recognizable companies and experience to filter and select candidates, rather than actual ability. This perpetuates bias and widens the opportunity gap. Eighty-eight percent of employers acknowledge that qualified high-skills candidates are vetted out of the process because they don’t match established filters. Not to mention, résumés have proved to be inversely correlated to successful candidate selection.
  3. Despite their ineffectiveness in assessing abilities, behavioral interviews are the most common decision-making tool. Humans tend to gravitate toward the familiar and recognizable patterns. If diversity is a challenge, it stands to reason that it would be more difficult for different (i.e., Black, different education/pedigree, unfamiliar lexicon, etc.) to make it through the interviewing process. As Northwestern professor Lauren Rivera’s study found, cultural similarities—shared tastes, experiences, pursuits and self-presentation styles—between employers and job candidates matter in hiring decisions.

To reduce system-level biases and improve diverse hiring, companies should:

  • Increase the channels and widen sources used to acquire diverse candidates/applicants with both traditional and non-traditional diverse networks.
  • Create structure and standardization in all stages of the interview and evaluation process to reduce bias.
  • Evaluate candidates’ knowledge, skills and abilities rather than résumés or behavioral interviews.
  • Involve stakeholders of diverse backgrounds in creating and executing the interview process.
  • Align KPIs, resources and incentives with stated diversity goals in alignment with priority.

While I initially struggled in the recruiting process, I found that real projects and case competitions became a means to reduce bias and showcase my skills and talent. I was still the same candidate but could now speak to demonstrated ability. Until we democratize access to experience and skill-building, and companies begin to use objective competencies and factors that actually matter, we will hardly see the needle move.

Stella Ashaolu is the founder and CEO of WeSolv, a platform that connects companies to more diverse candidates.

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