Understanding Unconscious Bias
In a world where companies aim to strengthen their Diversity, Equity, and Inclusion (DEI) efforts, they must also tackle the obstacles that work against the success of these initiatives. Bias is just one interference that leaders will have to address, but it is also one of the most damaging if left unchecked. While many different types of bias may be present in the workplace, they are usually expressed in the form of unconscious bias. These biases manifest as stereotypes or prejudices toward people with certain identities. However, people may not always be aware of their own biases because many tend to develop during childhood. Although employees may not intend to cause harm, remaining unaware of one’s own unconscious bias can cause lasting damage not only to individual colleagues but also to the company.
The Cost of Ignoring Bias
One of the most tangible ways companies are affected by unconscious bias is through financial loss. When employees perceive bias, they are 20% more likely to become disengaged at work and more than three times as likely to plan on leaving the company altogether. On top of the extra costs that come with employee recruitment, U.S. companies as a whole lose up to $550 billion due to employee disengagement every year. As long as employees feel alienated at work and disengage due to perceived bias, companies risk losing the talent and creativity that those employees were originally ready to bring to the job.
Legal Ramifications
If financial loss from disengagement is not enough to encourage action against unconscious bias, then leaders may want to turn their attention to real-life settlement cases. Recently, Walmart was involved in a sex discrimination lawsuit where the company did not promote a woman who had young children and instead gave the promotion to a woman without children. Since the decision was allegedly based on the stereotype that women with children are not committed to their careers, the act would put Walmart in violation of Title VII of the Civil Rights Act of 1964. Walmart is now paying $60,000 to settle the case, which could have potentially been avoided.
The Cultural Impact of Unchecked Bias
For multimillion-dollar companies, $60,000 may be a trivial amount to make up for isolated instances of discrimination in the workplace. However, when unconscious bias is present within company culture, the ramifications are significantly more costly. One example can be found in Tesla when just last year the company was ordered to pay $3.2 million to an ex-employee who stated they frequently experienced racism at work with managers failing to address the misconduct. In another case from September 2023, Tesla is being sued over claims of failure to address racial discrimination in the workplace and alleged retaliation against those who filed reports. While Tesla has not been ordered to pay any amount for this new case, the company must still face the cost of legal fees to fund its defense.
When unconscious bias goes unaddressed in the workplace, companies will have to face the hard costs that follow. As the workforce continues to experience a labor shortage, it is riskier than ever to overlook instances of alienation or possible harassment. Even if the affected employees don’t take the company to court for misconduct, they can still disengage from their work and move on to another company that makes them feel valued and protected. Addressing unconscious bias can seem like a near-impossible task, especially since its very definition means people are unaware of their biases. Even so, companies have too much to lose if they choose to discount the sizable effects that unchecked unconscious biases can have on their employees and the company as a whole.
