Through the lens of Behavioral Economics: Understanding gender equality in the workforce

"We need to improve the gender wage gap", "Women need to be leading companies", "Gender inequality...." "Women are underrepresented in the STEM industry".

How many times have we heard things like that, and continue to hear it in the news, in universities, at your company....?

Women have traditionally been barred from the labor market for a variety of reasons, including cultural and religions. However, the truth is that they continue to be underrepresented in a number of sectors dominated by men. Although this situation has been developing and improving, it is, unfortunately, an unresolved issue. The presence and participation of women in the workforce has improved and we now female leaders worldwide in almost every institution. However, looking at it in depth, we can observe that the root of the problem is still present and today I am going to explain how.

In this world, there are two types of people: Humans and Econs. Econs make perfectly rational choices. They are not affected by emotions, because really, they do not have any. However, humans, we are irrational and we tend to make spur-of-the-moment decisions. We are lazy, emotional creatures that are influenced by how things are designed and presented.

Many of you might be thinking, "yeah, I am definitely an Econ, I make perfectly rational decisions". Well, let me break it to you. Econs are mythical creatures that only exist in economical books. You are a human. You have and will make irrational decisions throughout your life, and that is normal, but we have to be aware of it.

We are all biased. That is the truth and you can’t deny it.

We have to accept that bias is everywhere. If you are unsure, try it for yourself. Several online test, such as the Implicit Association Test (IAT) have been built to demonstrate the pervasiveness of our human biases. Try it out and let yourself be surprised!

As analyzed by Daniel Kahneman, author of Thinking Fast and Slow, our brain has two operating system, which we call system 1 and system 2. On one hand, our system 1; the unconscious, effortless and automatic thinking, referred to as fast thinking. On the other hand, our system 2, which is our purposeful and intentional reasoning, referred to as slow thinking.

These mental shortcuts (also known as heuristics) that our system 1 brain uses saves us mental energy that we need for using system 2 thinking, however systematic errors in decision making can arise, and they are known as cognitive biases.

Biases are everywhere in a company. From the recruitment and selection process to the participation in the workforce itself. I am going to outline some of these biases and how they can be avoided and reduced, by designed choice architectures and other levers to shift behavior.

• Gender bias in the recruitment process

  1. Unconscious bias: everyone form opinions and assumptions about different ethnic and social groups, which might affect our decision making processes

  2. Groupthink bias: when we are part of a group, we tend to set aside our own personal opinions, and agree and conform with the rest of the group's beliefs

  3. The paradox of meritocracy: when managers work for meritocratic organizations, eel they are more neutral, and so unintentionally give themselves license to act on their prejudices.

  4. Affect heuristics: mental shortcuts for determining a candidate's suitability for the job

  5. Similarity attraction bias: we look for people that look like us, have similar interests, and in general, that we will get along with. This happens in organizations too. You want to be surrounded with someone you know will be your "friend" and easy to work with

• Gender equality training programs are failing

  1. De-biasing our minds is difficult: facts do not change our beliefs. It is not only difficult to de-bias our ideas, but bias awareness has little to no influence most of the time.

  2. Halo Effect: first impressions have such a lengthy and powerful effect, a first impression formed in one area tends to affect our view in another

  3. Moral licensing: People retaliate for doing something nice by doing something evil. It may help to explain why diversity training activities sometimes fail. Individuals who have participated in these programs believe they have done something useful and that they are thus "free" to return to their old behaviors.

What can we do about it?

• Be aware of our own biases: before anything else, you have to first recognize your biases and be aware of them. There is no purpose in trying to change a behavior when that person isn't even aware that a change is needed. There are several online tests to help you with it, but I recommend taking the Implicit Association Test (IAT) to test personal bias around any topic such as gender, sexuality, etc. You will be surprised!

• Independent assessment: evaluators can fall in the trap of groupthink and conformity bias. An independent assessment can help reduce these biases as no evaluator will be influenced by what others are saying or thinking.

• Use blind hiring processes in the resume review: reducing the unconscious bias we all have in regards to different identity groups. Anonymize the gender and race of the application.

• Standardize interviews - use structured interviews: women are far more likely than males to be asked about childcare duties and kids, creating pressure and tension during the interview. Regardless of the candidate's gender, interviews should be conducted the same way, in order to keep bias and discrimination away.

• Diverse recruitment team: a lack of variety in the recruiting team indicates that recruitments have similar qualities and perspectives, and hence will have similar views when hiring someone. Build the team with a diverse spectrum of people to ensure that each applicant receives a variety of inputs and insights. Similarity attraction bias and conformity bias are lessened in this manner.

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The ultimate goal of this post is for you to be aware of your own biases. We often think we are making the most rational and thoughtful decision, when in reality our system 1 thinking is kicking in.

Think more about how your biases are affecting the way you make decisions.

We have the tendency to see what we want to see instead of what there really is.

XoXo

Sofia's Choice

ps: we don't see things as they are, we see things as we are