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2021/2/5 Oregon Business –

The Steep Cost of Gender Bias

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January 25, 2021 Written by Sander Gusinow Published in Education


The Steep Cost of Gender Bias



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2021/2/5 Oregon Business – The Steep Cost of Gender Bias 2/21

A study from Oregon State University College of Business suggests the best
way to eliminate gender bias is to remove humans partially from the hiring

Gender bias in hiring and promoting workers has been well-documented. While the moral
case against gender discrimination in business is strong, a recent study from Oregon State
University found gender discrimination is also costly and difficult for even well-intentioned
companies to guard against.

The study analyzed gender discrimination data, which was gathered by sending identical
resumes to open job listings. The only distinction was the name, which alternated between
male and female. The data was used to run thousands of hiring simulations and produce
different employment outcomes. 

The results show gender bias to be expensive as employers often passed over the most
suitable person for the job. Furthermore, gender bias was present even at companies that
had undergone anti-bias training. The results suggest humans may be incapable of
eliminating bias entirely, and may not be as effective as predictive software when making
hiring decisions.

2021/2/5 Oregon Business – The Steep Cost of Gender Bias 3/21

The good news is that gender bias in hiring is less frequent than in previous decades. If a
potential employee’s job-worthiness were rated on a scale of one to 100, gender bias was
found to swing the final number by one. In the 1980s, similar experiments showed a gender
bias swing of four.

While that may seem like reason to celebrate, in a field of competitive candidates the
results of just a single point are large. Gender bias results in between 30% and 40% lower
odds of the most suitable candidate being selected for a position or a promotion. 

The results of gender discrimination were also shown to be costly. Due to overhead, loss of
productivity and cost of replacing workers who should not have been hired in the first
place, gender bias was found to cost companies an average of $7,000 per employee per

RELATED STORY: Momentum Grows for Women on Boards

Gender bias was also shown to work against men in certain circumstances. While women
are generally seen as less of a fit for executive roles, resumes from men were also rejected
more often for health care and education positions such as nurses and kindergarten

The study finds companies with anti-bias training did not fare any better on hiring
decisions than companies without. Jay Hardy, assistant professor of management at
Oregon State University College of Business and lead author of the study, explains that bias
is instinctual in humans and may be impossible to defeat entirely. 

“Science has shown the physical differences between men and women, especially as it
relates to health, but the idea that there are significant psychological differences is a notion
that has proven difficult to dispel,” says Hardy. “Bias is a natural function of our brains,
even in people with the best intentions.”

2021/2/5 Oregon Business – The Steep Cost of Gender Bias 4/21

Despite the fact that people are more aware of gender bias than in the past, the best way
to take bias out of the hiring process may be to limit human involvement. 

Job hiring software is nothing new. Artificial intelligence is routinely used by recruiters to
sort through large numbers of resumes. But advancements in the technology have
potentially made predictive software a more ethical alternative to hiring committees. 

“We need to remove human judgment when we can,” says Hardy. “People don’t want to
hear it, but we need to look into the power of algorithms.”

2021/2/5 Oregon Business – The Steep Cost of Gender Bias 5/21

Oregon State University gender bias inclusion women in business gender equality

artificial intelligence tech study


Modern Hire, an AI-powered hiring platform, is already used by companies like Amazon
and CVS Health to eliminate gender and racial bias in hiring. By evaluating candidates
based on data and personality traits obtained from online tests, AI tools have the potential
to remove bias from the equation. 

Not all AI tools have been shown to be inclusive, however. Some software applications
have shown large bias, especially those that use facial recognition. 

Recruiters may have to accept that their practices could have more bias than they thought.
Instead of more anti-bias training, creative solutions to hiring and promoting workers may
be needed to limit human fallibility and save companies money.

To subscribe to Oregon Business, click here.



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