[Jobs] The cost of hidden bias at work

[Peter Altschul]

Financial Times

 

The cost of hidden bias at work

 

Francesco Guerrera August 28 2007
http://www.ft.com/cms/s/0/8dbd30b2-54fe-11dc-890c-0000779fd2ac.html

 

When an Arab-American working for a US bank heard that a colleague was
buying a house, he went to Google Maps to check it out. Another colleague,
noticing he was looking at satellite pictures, quipped: "What, are you
selecting a target?"

 

The banker did not find it funny. A short while later he left the company
and the industry, tired of being the butt of terrorist jokes and facile
racial stereotypes by not-so-funny co-workers.

 

He is just one of an estimated 2m professionals, nearly 5 per cent of the US
managerial cadre, who quit their jobs every year because they feel unfairly
treated at work.

 

Their reasons for leaving are many and widely different, ranging from being
bullied or being passed over for promotion, to having to endure unwelcome
questions about their skin colour.

 

What is pushing these professionals out is not, by and large, overt racism
and sexism but rather a series of more covert actions that end up
undermining their trust and respect for their company and colleagues.

 

This yearly exodus is motivated by highly personal reasons but it has a
powerful common effect: a brain drain from key parts of the US economy at a
time when corporate America is struggling to recruit talent to compete with
low-cost rivals from emerging markets.

 

New research to be published today by the Level Playing Field Institute, a
San Francisco-based think-tank, puts the economic toll from professionals
who say they left their jobs solely because of unfairness at $64bn (£32bn) a
year.

 

The survey, carried out on more than 1,700 people by an independent research
consultancy in January, arrives at the figure by multiplying the average
annual compensation of a US manager by the number of "corporate leavers".

 

The numbers may be open to interpretation because determining the cost and
reasons of a subjective decision such as quitting a job is an inexact
science. But there is little doubt that US companies and their leaders face
serious problems in retaining and motivating significant portions of their
workforce.

 

Their challenges are particularly marked if they are trying to attract a
diverse workforce. The study suggests that perceived unfairness is
concentrated among minorities.

 

Compared with heterosexual white men, who account for the majority of US
managers, non-white people were three times more likely to claim they had
left after being unfairly treated, while homosexuals were twice as likely.

 

"It is a big issue for corporate America," says David Blood, a former
Goldman Sachs executive who three years ago teamed up with the former US
vice-president Al Gore to found Generation, a $1bn fund for sustainable and
socially accountable investing.

 

"If companies have high turn-over or are unable to attract top talent, they
will not perform well in the long run . . . Not dealing with these issues is
flawed finance and flawed business strategy".

 

Such opinions may come as a bit of a shock to many corporate executives.
After all, political correctness is widely assumed to have permeated most
aspects of US corporate life and nowadays virtually every company professes
to be an "equal opportunity employer".

 

But many of the people who left blame this narrowly legalistic view of
equality for companies' failure to spot and root out more covert causes of
frustration and disappointment among employees.

 

Take Linda (second names of all corporate leavers have been withheld to
preserve anonymity), who last year quit a senior role in the human resource
department of a professional services firm. She says her decision came after
her efforts to help African-American workers rise up the corporate ladder
were repeatedly stifled by management.

 

"I was the only African-American woman in the senior management group. I
came in thinking they wanted me to change that, but I quickly found out that
they were terrified of changing anything," she recalls.

 

"I left out of a sense of frustration that this issue was not the top of
their minds other than as a means of avoiding lawsuits. By showing me it was
not a priority, the company violated an expectation and a commitment."

 

Corporate executives admit that the US's notoriously litigious legal
environment was the original driver of corporate equality measures but
maintain that, after decades of practice, those policies are now deeply
embedded in many companies' cultures.

 

Yet, the large number of people who feel they have been unfairly treated or
stereotyped suggests, at least to equality campaigners, that corporate
America has not yet grasped the need to go beyond the letter of the law.

 

"Corporate practices, including the responses of management, must be attuned
to these dynamics, not just some dos and don'ts on a legal sheet," says
Freada Kapor Klein, who heads the Level Playing Field Institute.

 

For many companies, this is a complex logistical and managerial issue.
Unlike sexual and racial discrimination, this kind of unfairness is
episodic, subjective and often under-reported - three features that make it
almost invisible to senior management.

 

"How are we supposed to micro-manage what is said between cubicles?" asks
one senior executive at a large US manufacturer.

 

Corporate leavers and their supporters retort that it is precisely this
laissez-faire attitude that makes employees feel that their concerns are
being overlooked by the corporate hierarchy.

 

For Robert Sutton, management science professor at Stanford University and
author of The No Asshole Rule: Building a Civilized Workplace, "it is not
just the insults that make people feel demeaned but the notion that they are
left out and treated as invisible".

 

That is why those people who leave often bring with them a baggage of
mistrust for their former employers.

 

The Level Playing Field Institute study found more than half of those who
had experienced workplace unfairness discouraged others from seeking a job
at their former companies or buying their products or services.

 

To some observers this is a sign that, far from being a minor nuisance,
ignoring employees' concerns about fair treatment could start a vicious
circle that ends up hurting the company, its products and future prospects.

 

"This is a real wake-up call for companies that don't realise the different
needs of different sections of their workforce," says Eunice Azzani, a
senior partner at Korn Ferry, a headhunting firm. "You can recruit diverse
members of your workforce, but if you don't retain them, it's going to be
difficult to recruit them."

 

Equality campaigners and corporate executives do agree on one thing: any
meaningful change in companies' attitudes to these issues has to come from
the very top. "World-class chief executives get it," says a long-time
corporate watcher. "They know how important it is to get the workforce
right."

 

That may be good news for companies that have successfully addressed the
diverse concerns of their employees. Those who have failed may have to wait
for a radical revolution to trickle down from the C-suite to the Google Maps
screen of a middle manager.

 

Unfairness: tricky to define but palpable when encountered

 

"Workplace unfairness" is a difficult concept to define but people who have
experienced it say they know exactly what it is.

 

In the case of Elizabeth, unfairness did not materialise as all-out racism
or sexism but as a combination of the two, made worse by personal
animosities and insecurities.

 

A few years ago, Elizabeth, then a senior trainer for a large financial
group, complained to senior management after her supervisor, who happened to
be a woman, repeatedly said she did not look "the corporate part".

 

Elizabeth, who describes herself as "not an ugly woman", says her supervisor
took issue with her skirts, deemed too short, and her preference for
stockings and heels.

 

"I was told that my clothes were inappropriate for someone who had large
breasts and a large behind. That my make-up was too 'heavy'. I felt my
supervisor was threatened and did not want me, a Latino woman, in a senior
job."

 

Elizabeth's complaints went unheeded but they did elicit a damning response
from her supervisor: the "gift" of a copy of What Color is Your Parachute? -
a best-selling job-seeking guide.

 

Elizabeth did not take the hint, accepting a lower paid job to chart a
different path within the same company. Today, she heads a 36-strong team
and says she has not heard comments about her appearance for some time.

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Financial Times
 
The cost of hidden bias at work
 
Francesco Guerrera August 28 2007 http://www.ft.com/cms/s/0/8dbd30b2-54fe-11dc-890c-0000779fd2ac.html
 
When an Arab-American working for a
US
bank heard that a colleague was buying a house, he went to Google Maps to check it out. Another colleague, noticing he was looking at satellite pictures, quipped: "What, are you selecting a target?"
 
The banker did not find it funny. A short while later he left the company and the industry, tired of being the butt of terrorist jokes and facile racial stereotypes by not-so-funny co-workers.
 
He is just one of an estimated 2m professionals, nearly 5 per cent of the US managerial cadre, who quit their jobs every year because they feel unfairly treated at work.
 
Their reasons for leaving are many and widely different, ranging from being bullied or being passed over for promotion, to having to endure unwelcome questions about their skin colour.
 
What is pushing these professionals out is not, by and large, overt racism and sexism but rather a series of more covert actions that end up undermining their trust and respect for their company and colleagues.
 
This yearly exodus is motivated by highly personal reasons but it has a powerful common effect: a brain drain from key parts of the US economy at a time when corporate America is struggling to recruit talent to compete with low-cost rivals from emerging markets.
 
New research to be published today by the Level Playing Field Institute, a San Francisco-based think-tank, puts the economic toll from professionals who say they left their jobs solely because of unfairness at $64bn (£32bn) a year.
 
The survey, carried out on more than 1,700 people by an independent research consultancy in January, arrives at the figure by multiplying the average annual compensation of a US manager by the number of "corporate leavers".
 
The numbers may be open to interpretation because determining the cost and reasons of a subjective decision such as quitting a job is an inexact science. But there is little doubt that US companies and their leaders face serious problems in retaining and motivating significant portions of their workforce.
 
Their challenges are particularly marked if they are trying to attract a diverse workforce. The study suggests that perceived unfairness is concentrated among minorities.
 
Compared with heterosexual white men, who account for the majority of US managers, non-white people were three times more likely to claim they had left after being unfairly treated, while homosexuals were twice as likely.
 
"It is a big issue for corporate America," says David Blood, a former Goldman Sachs executive who three years ago teamed up with the former US vice-president Al Gore to found Generation, a $1bn fund for sustainable and socially accountable investing.
 
"If companies have high turn-over or are unable to attract top talent, they will not perform well in the long run . . . Not dealing with these issues is flawed finance and flawed business strategy".
 
Such opinions may come as a bit of a shock to many corporate executives. After all, political correctness is widely assumed to have permeated most aspects of US corporate life and nowadays virtually every company professes to be an "equal opportunity employer".
 
But many of the people who left blame this narrowly legalistic view of equality for companies' failure to spot and root out more covert causes of frustration and disappointment among employees.
 
Take Linda (second names of all corporate leavers have been withheld to preserve anonymity), who last year quit a senior role in the human resource department of a professional services firm. She says her decision came after her efforts to help African-American workers rise up the corporate ladder were repeatedly stifled by management.
 
"I was the only African-American woman in the senior management group. I came in thinking they wanted me to change that, but I quickly found out that they were terrified of changing anything," she recalls.
 
"I left out of a sense of frustration that this issue was not the top of their minds other than as a means of avoiding lawsuits. By showing me it was not a priority, the company violated an expectation and a commitment."
 
Corporate executives admit that the US's notoriously litigious legal environment was the original driver of corporate equality measures but maintain that, after decades of practice, those policies are now deeply embedded in many companies' cultures.
 
Yet, the large number of people who feel they have been unfairly treated or stereotyped suggests, at least to equality campaigners, that corporate America has not yet grasped the need to go beyond the letter of the law.
 
"Corporate practices, including the responses of management, must be attuned to these dynamics, not just some dos and don'ts on a legal sheet," says Freada Kapor Klein, who heads the Level Playing Field Institute.
 
For many companies, this is a complex logistical and managerial issue. Unlike sexual and racial discrimination, this kind of unfairness is episodic, subjective and often under-reported - three features that make it almost invisible to senior management.
 
"How are we supposed to micro-manage what is said between cubicles?" asks one senior executive at a large US manufacturer.
 
Corporate leavers and their supporters retort that it is precisely this laissez-faire attitude that makes employees feel that their concerns are being overlooked by the corporate hierarchy.
 
For Robert Sutton, management science professor at Stanford University and author of The No Asshole Rule: Building a Civilized Workplace, "it is not just the insults that make people feel demeaned but the notion that they are left out and treated as invisible".
 
That is why those people who leave often bring with them a baggage of mistrust for their former employers.
 
The Level Playing Field Institute study found more than half of those who had experienced workplace unfairness discouraged others from seeking a job at their former companies or buying their products or services.
 
To some observers this is a sign that, far from being a minor nuisance, ignoring employees' concerns about fair treatment could start a vicious circle that ends up hurting the company, its products and future prospects.
 
"This is a real wake-up call for companies that don't realise the different needs of different sections of their workforce," says Eunice Azzani, a senior partner at Korn Ferry, a headhunting firm. "You can recruit diverse members of your workforce, but if you don't retain them, it's going to be difficult to recruit them."
 
Equality campaigners and corporate executives do agree on one thing: any meaningful change in companies' attitudes to these issues has to come from the very top. "World-class chief executives get it," says a long-time corporate watcher. "They know how important it is to get the workforce right."
 
That may be good news for companies that have successfully addressed the diverse concerns of their employees. Those who have failed may have to wait for a radical revolution to trickle down from the C-suite to the Google Maps screen of a middle manager.
 
Unfairness: tricky to define but palpable when encountered
 
"Workplace unfairness" is a difficult concept to define but people who have experienced it say they know exactly what it is.
 
In the case of Elizabeth, unfairness did not materialise as all-out racism or sexism but as a combination of the two, made worse by personal animosities and insecurities.
 
A few years ago, Elizabeth, then a senior trainer for a large financial group, complained to senior management after her supervisor, who happened to be a woman, repeatedly said she did not look "the corporate part".
 
Elizabeth, who describes herself as "not an ugly woman", says her supervisor took issue with her skirts, deemed too short, and her preference for stockings and heels.
 
"I was told that my clothes were inappropriate for someone who had large breasts and a large behind. That my make-up was too 'heavy'. I felt my supervisor was threatened and did not want me, a Latino woman, in a senior job."
 
Elizabeth's complaints went unheeded but they did elicit a damning response from her supervisor: the "gift" of a copy of What Color is Your Parachute? - a best-selling job-seeking guide.
 
Elizabeth did not take the hint, accepting a lower paid job to chart a different path within the same company. Today, she heads a 36-strong team and says she has not heard comments about her appearance for some time.