Should You Use Diversity Quotas? A Look at the Evidence

India

In 2013, India introduced the Companies Act which made it mandatory for all publicly listed companies to have at least one woman director.

This legislation significantly grew pool of women directors.

In Dehli, representation of women increased to just above 50%.

However, there were also some intended consequences...

Promoting female politicians actually reduced the representation of traditionally disadvantaged ethnic groups.

Constituencies reserved for women were less likely to elect people of lower socioeconomic status.

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Spain

​​The 2007 Spanish Gender Equality Act introduced a quota of no less than 40% of each gender to serve as board directors of the country’s biggest companies.

What was different about Spain’s quota laws is that there were no sanctions for non-compliance.

The combination of a weak incentives and a lack of penalties meant that board representation didn’t meet its 40% target.

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USA

Whilst quotas are mostly illegal in the U.S, a study of their application in higher education revealed that one of the unintended consequence of quotas is the way in which beneficiaries are perceived. 

When the universities were described as being committed to an affirmative action policy, Hispanic applicants were seen as being less qualified.

Conclusion

Whilst diversity quotas undoubtedly improve representation, this improvement is mostly just surface-level.

Their primary (and only) concern is the number of people represented from a single identity group.

Not only does this gloss over things like retention, but it also gets difficult when you start looking at intersectionality…

If I set quotas for one dimension of diversity, is this going to harm another dimension of diversity?

There are also questions around whether or not diversity quotas help or hinder inclusion.

You can get more people from a given background into a position, but this doesn’t necessarily mean they’ll be treated fairly once hired.

If we were to boost female representation on boards, for example, this doesn’t remove all of the barriers that then prevent them from rising up the ladder or even having their ideas heard once in that position.

Whilst it’s not hard to imagine how quotas may anger the groups that they don’t aim to help (like white men, for example), they can also disadvantage the very people they’re designed to benefit.

Those hired via quotas can be left feeling as if they were hired based on their identity rather than their skills.

So, diversity quotas might not be the solution to diversity gaps, but this doesn’t mean there’s no solution at all.

The problem with diversity quotas is that they don’t address the root cause of diversity gaps - unconscious bias.

We make snap-judgments based on intuitive associations and past experiences that generally lead to minority groups being disproportionately overlooked.

Instead of enforcing quotas and the risks they come with - we can simply remove this bias that makes them necessary in the first place.

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How can we improve diversity without quotas?

Diversity quotas may not be the most effective means of building more diverse and equitable workplaces, but we should still be working towards this goal.

At Applied, we believe that by building a hiring process that removes bias, you can increase diversity without quotas, and without the caveats that come with them.

Hiring for diversity doesn't have to stretch your budget. Since we know not everyone has the resources or bandwidth to completely transform your hiring, here are the some of the most impactful changes you can make towards a debiased process.

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Anonymize applications

Things like someone’s name, age, address and perceived ethnicity can all trigger biases that lead to candidates being discriminated against.

No matter how pure our intentions, we all have biases.

We have a natural tendency to warm to those like ourselves and resist the unfamiliar.

Although its not possible to debias human beings (which is why unconscious bias training doesn’t work), it is possible to simply remove the information that leads to bias.

What to remove from applications:

• Photos
• Names
• Date of birth
• Address
• Gender/religion
  Hobbies

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Use more predictive assessments

This is a bitter pill to swallow for a lot of hirers, but the research is clear - education and experience don’t tell us much about someone’s ability.

Whilst these things may be proxies for how well someone will preform in the job, they also signal other socioeconomic factors.

And since we know that those from underrepresented groups face hiring bias, how can we then expect them to have the specific credentials we’re looking for?

The most predictive form of assessment is work samples.

Work samples simulate parts of the job by asking candidates to either perform or explain their approach to them.

Here’s an example for a Product Manager role:

Question: Our engineering team has been working towards the big release of a new tool. The planned release date is the end of the day tomorrow, but there are a number of bugs in it.

What would you do?

Skills tested: Prioritization, Collaboration, Agile, Project Management

By testing skills upfront, we can identify candidates who have the skills necessary to perform in the role, without relying on education and experience - which often says more about someones background than their ability.

To build work sample questions, think of a realistic scenario or task that would occur in the role, and then ask candidates what they would do.

Think of them like ‘tell me a time when’ questions, except phrases hypothetically to avoid reliance on experience.

Ideally, you’d have 3-5 work samples instead of a  CV/cover letter process. This will allow you to find the best people for the job completely anonymously.

However, if you’re not in a position to axe CVs, we’d recommend using work samples alongside CVs.

You’ll likely find that those who show the best skills aren’t the same people you would’ve shortlisted based solely on their credentials.

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Have multiple reviewers to mitigate bias

Even when using an anonymous, skill-based hiring process, individuals can still have biases.

This is why it's advised you have three reviewers score candidates against set criteria.

Why? Because collective judgment has been proven to be more accurate than that of an individual, and any single person’s biases will be averaged out.

If you’re going to be using work samples, give yourself a scale and review guide to score against.

At Applied, we use a 1-5 star scale and a simple bullet point guide.

1 Star 

- Vague, little or no effort made

3 Star 

- Some of the below points

5 Star 

- Clear understanding of issue

- A view to the big picture and how to support it

- Clear steps to get themselves up to speed

By data-proofing your process like this, you’ll be able to make easy, unbiased hiring decisions.

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Track diversity metrics

One of the reasons quotas appear to work is that they make someone responsible for a metric.

Whilst we wouldn’t advocate for strict quotas, we do believe in monitoring how different groups progress through your hiring process to ensure that its fair.

If you see that people from a given group are consistently scoring poorly on a certain question, then you can go in and look at whether or not something in the phrasing or content of that question is causing an unfair disadvantage.

Once you can prove your assessment process is fair, you can then start to look at sourcing. 

Some channels will bring a more diverse set of candidates than others, and so you can simply double down on these.

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The final word

True, debiasing your hiring won’t guarantee you a set number of hires from a given group, but by putting the empahsis on skills and anonymizing your process, diversity will improve over time.

Diversity quotas can and often do work in the short-term - and they certainly don’t mean jobs are given to people who don’t deserve them.

However, they are a quick fix which come with downsides and cause tension.

So whilst quotes are by no means an entirely flawed means of boosting representation, you should start by looking at the hiring process… are there steps you can take to make your recruitment more inclusive before looking to more divisive strategies?

Applied is the essential recruitment platform for fairer hiring. Purpose-built to make hiring ethical and predictive, our platform uses anonymised applications and skills-based assessments to improve diversity and identify the best talent.

Start transforming your hiring now: book in a demo or browse our ready-to-use, science-backed talent assessments. We've also used data from over 100,000 applications to rank the top diversity job boards, to help you attract the most diverse range of candidates possible.