The ability to find, hire, and retain top talent is critical for business success, but cognitive biases can sometimes cloud the perception of the most qualified candidate. Learn how to identify and avoid cognitive biases in the hiring process to create a more successful and diversified workforce.

How to Recognize — and Avoid — Cognitive Bias in Your Hiring Process

The COVID-19 pandemic has created an uncertain job market. As the economy reopens, however, your business has the unique opportunity to recruit top talent and rebuild a workforce that differentiates you from other industry players. This means that, in order to hire the right candidates for your business, you may need to eliminate your unseen cognitive hiring biases.

According to Gallup, when organizations are precise in hiring high-talent managers and employees, they can increase company revenue by up to 33% per employee. Effectively growing your team in a financially vulnerable time is crucial for your business. In order to make the right hiring decisions, business leaders need to overcome their biases by implementing behavioral economics in their hiring process.

Behavior Economics and Its Relation to Talent Retention

Behavioral economics takes traditional economic theory and combines it with the psychology of emotion-driven behavior. It explores the social and cultural impact on business decisions — and works to help people overcome their self-serving tendencies, as they can lead to impulsive business decisions, especially when hiring.

Cognitive Biases and the Hiring Process

Cognitive bias is the innate belief system we all have, which results in systematic errors in judgement. Because bias shapes the way we see ourselves and others, they can inform the difference between hiring the most qualified candidate and hiring a less qualified candidate because they speak to our personal experience. Eliminating cognitive bias in the hiring process can lead to a more successful, diversified workforce.

The first step in conquering harmful biases is to recognize them. From there, you can improve your hiring process and make decisions that are ultimately more profitable for your business. Here are the most common forms of hiring biases that you can recognize and work to avoid.

Overconfidence

Overconfidence is when business leaders respond to their many years of hiring experience by making complacent recruitment decisions. This causes employers to rely on outdated hiring practices, and it’s important to continuously update recruitment methods to avoid hiring mistakes.

One way to combat overconfidence is by researching and employing new hiring practices. Asking candidates to take a sample work test, for example, is a practical method for evaluating how they’d perform in the role. Another way is to evaluate your own past hiring practices. If you can identify what caused previous hiring mistakes, you can pinpoint key areas for improvement in the future.

Decision Paralysis

Choosing between two candidates can be challenging, especially if each candidate has the right skills and experience to successfully take on the role. This can be a tough decision for a hiring manager, and feeling overwhelmed may drive them to pick the wrong candidate — or no candidate at all.

Feeling paralyzed in the decision-making process can lead to hiring mistakes, but decision paralysis can be avoided. One way is to set firm objectives for each round of the interview process. This helps to avoid re-asking previous questions and gain a clear understanding of how the candidate will contribute to the role.

It’s also important to focus on what the candidate can do, rather than what they can’t. Remember that hiring is not an exact science, and most of your decision-making comes from deeper interview questions tailored specifically to the role and the ways it can evolve.

Confirmation Bias

Confirmation bias is the human tendency to search for data that confirms our beliefs. When a manager favors a candidate that supports their personal beliefs, this is confirmation bias at work. This can inhibit the growth of your business and lead to costly hiring mistakes.

Business leaders need to educate themselves by reviewing data that challenges their belief system. You can overcome confirmation bias by taking the time to read about underrepresented groups in the workplace. Seek out educational resources, such as books, podcasts, or interviews, in order to broaden your hiring perspective and equip yourself with the right language for discussing underrepresented candidates with your hiring committee.

Another practical method for overcoming confirmation bias is to implement a blind hiring process. This removes applicant names from their resume, which reduces gender or demographic bias.

Framing Bias

Making decisions based on the manner in which information presented, rather than the information itself, is called framing bias. This can hinder the hiring process, as it doesn’t include outside critical perspectives. Candidates may frame their experience or report answers more positively or negatively than reality, which can impact whether they are offered a position.

By changing the framing, a different decision may emerge. One way to avoid this bias is to challenge the way it’s framed, and remove any editorial or judgmental comments in your interview questions.

You can also prepare framing bias by using a skills-focused checklist in your interview process. This allows you to set specific guidelines when interviewing, and it establishes a benchmark for specific skills, rather than how they’re framed.

Attribution Bias

Attribution bias is when people attribute their success to a person and their failures to a work environment. If an interviewer asks a candidate to describe a time when they experienced failure, they are more likely to blame a colleague or manager than on their failures or unwillingness to grow.

You can combat attribution bias by pivoting interview conversations in ways that explore a candidate’s sense of responsibility to their company and team. Aim for interview questions that focus on their commitment to working with others and how they might own up to — and grow from — their mistakes.

Dominated Alternatives (The Decoy Effect)

When a business leader has a choice between several candidates, the dominated alternatives bias can come into play. Candidate preference changes when less qualified options are added.

For example, if two candidates are being interviewed, and candidate A has good computer skills but poor social skills, and candidate B has strong social skills but is weaker on computer skills. It can be hard to decide between the two, so a third candidate may then be considered. If candidate C also has poor social skills, candidate B can suddenly become a much stronger choice, as they have the strongest social skills of the three.

The best way to hire the best candidate for a particular role is to create a diverse hiring team. If you prioritize hiring for candidates with different experiences and backgrounds, a hiring team fosters collaboration in finding the right skills for the role, and having multiple voices eliminates room for bias.

Impact of COVID-19 and Social Unrest on the Hiring Process

Now is an important time for business leaders to rethink their workforce. As calls for workplace diversity and leadership echo across the nation, and the economy rebuilds in the wake of the COVID-19 pandemic, companies have a historic opportunity to restructure their hiring process.

It’s essential to assess your hiring strategies and make critical decisions about which candidates can transform your workforce and help your business recover from a downturn. Your hiring choices will ultimately come from your ability to eliminate your cognitive bias, recruit top talent, and find innovative ways for your business to weather future storms.

Santander Bank does not make any claims, promises or guarantees about the accuracy, completeness, or adequacy of the information contained in this article. Readers should consult their own attorneys or other tax advisors regarding any financial or tax strategies mentioned in this article. These materials are for informational purposes only and do not necessarily reflect the views or endorsement of Santander Bank.

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