By Alison Gaines – Global CEO, Gerard Daniels
Boards are increasingly interested in organisational culture. They realise that it is a key enabler of enterprise performance. Infact, it is one of the key organising principles for performance – along with governance, strategy, leadership, sufficient resources and good processes.
Although management is responsible for the levers that drive the day-to-day culture of the organisation, the board has stewardship of the culture and should give direction to management about the preferred norms for the workplace.
Employers find themselves well placed to create great cultures and there is perceptible goodwill toward good employers. The well-regarded 2019 Edelman Trust Barometer – the largest global survey and foremost authority on trust in business, government, media and NGOs – found a loss of faith in the system, with less trust in government, the media and non-government institutions. The relationship that has bucked this trend is the growing trust in ‘my employer’.
A trusted employer is often identified as an employer whose values align with the employee and provides a sense of meaning and purpose for employees. Trusted employers provide employees with certainty. For employees, their priority is a sustainable career – with access to well-designed jobs and preparation for the jobs of the future. They also seek a fair workplace where opportunities are equally accessible, work design is flexible and there is fair pay and proper recognition for performance. Good leaders and managers are critical to the quality of the workplace.
A dimension of organisational culture is fairness. Fairness in the workplace is a great driver of legitimacy for leaders and organisational culture. Organisations that behave unfairly run the real risk of losing the commitment of employees. Fairness implies a workplace culture of inclusion and free of corrosive bias.
Age discrimination is a dimension of bias. Workplaces are accommodating five generations of workers (spanning traditionalists, baby boomers, Gens X, Y and Z). The millennials are approaching their forties. Many, but not all countries, have age discrimination laws. Age discrimination in the workplace complaints are on the rise, usually involving older workers and usually related to recruitment practices and layoff decisions. Common examples are complainants reporting that they are unsuccessful in a recruitment process because the employer wanted a younger worker; or an employer refusing job applications from older workers because they can’t learn new skills or aren’t a good cultural fit. While age discrimination is fairly common, few employers include age diversity among their workforce diversity initiatives.
The recent OECD report Working Better With Age identifies many examples of workplace age discrimination. Principal among them is a reluctance of employers to hire and retain older workers and to invest in skills and improve employability of older workers. It recommends that the key to older worker participation is flexible working hours and new investment in employability – especially to improve the digital awareness of older workers. Employers should also address poor recruitment, promotion and retention practices.
The inattention to age discrimination arguably allows unconscious bias in human resource decisions to prevail unchecked. Age bias can be found in all aspects of HR decisions. It can commence with the employment branding and recruitment advertising, through to the job description, candidate screening and interviewing. Employment branding can project an age imaging that promotes ‘youthful brand’ or at least a brand that does not present visually a diverse workforce by age.
Examples of practices that can prompt complaints are job adverts that hire for recent graduates or use words like ‘high energy’ or ‘innovators’ or ‘challenging’ or ‘strong media skills’, which are often seen as code for ‘young workers’. Often an emphasis on ‘cultural fit’ in the recruitment process can reinforce an age monoculture.
“Age bias can be found in all aspects of HR decisions. It can commence with the employment branding and recruitment advertising, through to the job description, candidate screening and interviewing”
During employment, older workers complain that they are not given the same investment in training and career development to prepare for changing jobs. They see employers exhibiting a bias for developing younger workers, ostensibly because the investment has more years to deliver a return to the employer. Employers can be slow to adapt the workplace to the different needs of older workers, including offering job flexibility and modifying physical tasks or redesigning jobs.
Layoff decisions can involve overt age discrimination – where there is a deliberate decision to layoff the oldest workers or have a forced retirement policy – or can be more subtle where a voluntary retirement package is offered to older workers as a key layoff strategy; or jobs are redesigned to make redundant the skills of older workers without an offer to reskill. While targeting older workers zis a legacy HR strategy, it ignores the phenomena of workers staying in the workforce for longer than the last generation.
What is unconscious bias?
Unconscious biases are social stereotypes about certain groups of people that we
form outside our conscious awareness and happen outside of our control. It occurs automatically and is triggered by our brain making a quick judgement.
As Daniel Kahneman posits in Thinking, Fast And Slow this occurs because we tend to be over-confident in our own investment in decisions. We like to think of ourselves as rational. We like to make fast decisions that feed into our self-confidence, as winners rather than losers when we make judgements.
Moving fast brings into play cognitive biases we use to sift our choices – often called intuition, gut reaction or reliance on archetypes. There are a few archetype biases – confirmation bias, affinity bias, attribution bias, group think – that tend to dominate human resource decisions. Interesting research from McKinsey (McKinsey Quarterly June 2019) shows that CEOs and HR practitioners are the most likely to exhibit over-confidence bias in their own talent management processes.
Confirmation bias is where the decision-maker undertaking the analysis wants to prove a predetermined assumption. Affinity bias is where the decision-maker unconsciously prefers ‘people like us’. Attribution bias is where the decision-maker uses a simple attribution to make complex judgements (for example assuming older workers are overqualified or older workers won’t have digital skills). Group think is where a dominant approach to decision-making, usually by the leader, overwhelms rational decisions. Poor HR practices allow these biases to leak into decision-making.
“An insidious dimension of age discrimination is the fear of being left out of the office in-crowd”
The risk of bias dominating decision-making occurs where there is one decision-maker or one dominant decision-maker. Sharing decision-making for hiring, retention and layoff decisions, policies and processes with a wide range of participants from diverse backgrounds who have received unconscious bias training is a practical step to improving process.
Some employers have responded to the problems of human bias by employing automated recruitment systems. However, artificial intelligence (AI) may create its own risks. While management hoped that predictive AI recruiting systems (algorithmic job platforms that source and screen applications) would reduce the bias of human decision-makers there is now a real risk that machines will learn their own bias by reinforcing what they’ve learned from past success. Regulators are now showing interest in how AI can cause discrimination. Some large users of AI have abandoned flawed products, and some are subjecting the AI to fairness audits.
Proactive employers have introduced blind recruitment methods that strip out
any age-related information on the resume. This includes ensuring that the resume does not include date of birth, photo, graduating year for qualifications and irrelevant early career experience. Some employers have gone further and rather than ask for a chronology of a candidate’s career they request the candidate address the key criteria with examples of their experience and qualifications. Some also anonymise the candidates for the screening process to ensure old-fashioned names don’t disadvantage candidates (this technique is also successful for gender diversity recruitment).
Bias in the workplace can be corrosive. An insidious dimension of age discrimination is the fear of being left out of the office in-crowd. In the neuroscience of leadership, we learn that membership of the group is very important to most employees. A challenge for all leaders is to shape a workplace where we can optimise the number of people who feel included. There is evidence that older workers can feel excluded from the ingroup. A recent comparative study between perceptions of New Zealand and Australian older workers (aged 55 to 64) found that Australian workplaces didn’t place the same value on age diversity as their New Zealand counterparts and older Australian workers seem to standout more and are treated differently by colleagues and management. The authors concluded that many managers are not supportive of new ways of thinking, such as flexible work hours, and have outdated views on the value of older workers to their organisation (Bentley, Teo Factors influencing leave intentions among older workers: a moderated-mediation model’ 2019).
One of the best tactics to maximise the size of the ingroup is to practise fairness, which inherently challenges biased behaviours.
What practical steps can the board take to shape an organisational culture free of bias?
First, the board can ask for a demographic profile of its workforce. It can also ask for an audit of the age diversity strategy of the organisation and the internal rules about anti-discrimination and the fair process guiding human resource decisions. It should enquire about the unconscious bias documentation and training that accompanies HR processes (not only recruitment but also promotions, training and development, remuneration, job design and redundancy). It can ensure that management pays attention to age discrimination on its job sites and in human-based and AI recruitment decisions.
The board should also assess the risk and monitor the outcomes of poor process – including litigation with employees based on allegations of aged bias; complaints to anti-discrimination regulators by employees based on age bias; feedback gathered from exit interviews; and turnover and the impact of layoff programmes measured by workforce age.
The board can also have a positive agenda for management that captures the proven initiatives that help workers participate in the workforce:
- Encourage age diversity as an employment brand and organisational outcome
- Measure outcomes for older workers
- Insist on unconscious bias process improvement and training for all decision-makers
- Improve the workplace for older workers – provide job flexibility; design ways of working (especially manual work) so that it is safer and more comfortable for older workers
- Give equal access to training and development to ensure all workers can keep up with jobs of now and the future
- Avoid age-based layoff programmes
Of course, the board cannot lead where it does not follow its own advice. The board should be alert to its own biases in the decisions it makes about recruitment to the board and recruitment of the CEO and influence over the succession pipeline. More broadly, unconscious bias can lead to flaws in broader decision-making and board interaction. A well-functioning board will always reflect on the possibilities that the unconscious can undermine the conscious decision.
About the Author:
Alison Gaines has led the Board Practice at Gerard Daniels Executive Search since 2006 and was appointed global CEO of the firm in 2017. She is a regular commentator on effective board governance and is also an active non-executive director. She has been on the local Council of the Australian Institute of Company Directors and a director of the INSEAD Directors Network (IDN) board. She is a past adjunct professor teaching legal ethics.