Job postings

2 min read · Feb 9, 2024
New Power Labs

Tl;dr: Diversity statements on job postings can be harmful to diverse candidates.

Employers offer fewer callbacks to applicants with racial cues in their résumés. When in doubt of a company’s stance on diversity, candidates may edit out identifiers associated with distinct cultures or ethnicities to avoid being screened out. 

Job postings that include diversity statements encourage underrepresented individuals to drop their guard and thus are less likely to edit their resume. This could increase the number of applications received, but will not necessarily protect applicants from biases in the hiring process.

A comprehensive audit from the Institute for Gender and the Economy (GATE) at the Rotman School of Management has found that employers continue to exhibit significant bias against Black and Asian applicants, despite having pro-diversity statements in their job postings. This shows employers need to move beyond statements and consider other methods to reduce bias against diverse applicants in the hiring process. 

We can apply this framework to the funding and finance space. Signalling that we want to attract diverse investees and communities of beneficiaries is a good first step. Beyond that, how do we continue to address bias throughout the capital deployment process?

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