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What is unconscious bias, and why does it matter in the workplace?

Most people say they would never judge a person by how they look, their gender, race, sexual orientation, religion or age. But according to social psychologists at the University of Washington and Yale, 90-95% of people judge people unconsciously. This is known as unconscious bias.

What is unconscious bias?

Unconscious bias are thoughts or feelings we’re not directly aware of, that influence our judgement. They are the attitudes and stereotypes that affect our views, our actions, and our decision-making ability, which we’ve unconsciously created from our own background and experiences. It happens automatically, and is triggered by our brain making quick judgements and opinions of people and situations.

Why do we have unconscious bias?

Everyone has biases, whether we’re aware of them or not. It’s a fundamental aspect of being human. Scientists believe that these quick judgements and decisions can help us navigate the world without being overwhelmed, because the unconscious mind can process more information than our conscious minds. However, the downside of this is that prejudice occurs during important decisions such as recruitment, healthcare and criminal justice which can disadvantage people.

Why does unconscious bias matter in the workplace?

When unconscious bias is present in the workplace it can drive negative impact in the following ways:

  • talented people are left out of your workforce, or not allowed equal opportunity for development and career progression
  • diverse voices aren’t heard in meetings and decisions can be impaired
  • culture is not genuinely demonstrating inclusive workplace principles
  • employees are not able to fully contribute to your organisation
  • creativity and productivity of your team or organisation may be compromised.

Common types of bias at work

Introductions and first impressions

Foundations for first impressions come from our own experiences and sense of the world — what’s familiar to us. Our reactions to someone we don’t know may be positive, negative, or neutral depending on what’s visible or audible about them; depending on their race, perceived sexual orientation, accent or a number of other characteristics.

First impressions are powerful. We need to be aware of the impact that has on the assessment you have when you first meet them.

Stereotypes and performance bias

Performance bias occurs when people who are part of dominant groups, such as being white or male, are judged by their expected potential, while those who are part of less dominant groups such as people of colour or women are judged by their proven accomplishments.

Heidi vs Howard: Gender bias in success and likeability

In 2003 Frank Flinn, a Columbia Business School Professor and NYU Cameron Anderson ran an experiment to test perceptions of men and women in the workplace.

They started with a Harvard Business School case study about a real-life entrepreneur named Heidi Rosin. The case described how Heidi became a venture capitalist using her outgoing personality, and vast personal and professional network, that included many of the most powerful business leaders in the technology sector.

They gave the case study to two classes of students. One class read Heidi’s story and the other class read the same story but with one difference, they changed the name from Heidi to Howard. Then, they polled the students.

Students rated Heidi and Howard as equally competent, which made sense because their accomplishments were identical. Yet while students respected Heidi and Howard, Howard came across a more “appealing colleague” Heidi, on the other hand was seen as “selfish” and not the type of person you want to hire or work for.

The same data, with a single difference: Gender, created vastly different impressions. This experiment supports what research already has clearly shown which is that success and likeability are positively correlated for men, and negatively correlated for women. When a man is successful, he is liked by both men and women. When a woman is successful, people of both genders like her less. 

Women are expected to be nurturing and care-taking, while men are expected to be assertive and action-oriented. Having to produce results and be liked makes it harder for women to get hired and promoted, negotiate on their own behalf, and exhibit leadership.

What can you do in your team, or at work?

  1. Become mindful of your own unconscious bias and reflect on it.
  2. Take the Harvard Implicit Assessment Test to see what your unconscious biases are.
  3. Call out unconscious bias when you see it. If we can create an environment where we recognise bias, we can improve together.
  4. Standardise processes like hiring by building a grading criteria, asking the same questions to candidates and setting the same tests.
  5. During the hiring process, get managers to speak last. A manager’s perspective can influence a team’s input. See what more ideas can arise, if a manager listens and speaks last.

Celebrating women leaders at Flare on International Women’s Day

This International Women’s Day, the theme is #ChooseToChallenge. We are so fortunate to work with so many phenomenal women here at Flare, and we spoke with 4 of our female leaders about what this year’s theme means to them, and their best tips for living your best financial life and building inclusive workplaces.

Liz Crawford

Chief Technology Officer, Flare

Liz is an engineering, product, and data science leader with a background in artificial intelligence and entrepreneurship.

What does #ChooseToChallenge mean to you?

To me, the theme is about being a force for positive change. Identifying opportunities and taking action against them, speaking up. There are ways each and every one of us can make a difference. As someone in a technology leadership role I have the opportunity to mentor women, to build a diverse and inclusive team and to influence others to do the same.

At Flare, we believe in empowering every Aussie to live their best financial life. How do you approach this in your own life?

There is so much that goes into this. I’m a big believer in hard work and honing your craft. This helps take care of your personal revenue line while you are younger via your ability to earn money for the work you do. For me, it’s not about maximising this revenue line, work is a large part of my life and it is important to me that I enjoy it and believe I’m contributing positively to the world.

The other side of this is savings, investment and spending. I have always spent less than I have earned which has allowed me to save and invest. Saving has required me to be frugal at times (I spent years doing a PhD on a fellowship), but it’s never meant not having necessities. I know that is a privilege. Everyone’s situation and preferences are different and at Flare we aim to help people in the ways that matter for them.

What advice do you have for businesses that are looking to build a more inclusive workplace?

Take the time to educate yourself. There is so much material out there you can learn from. Two specific tips on hiring. First, be aware of how your hiring criteria can skew your pool of eligible candidates. For example, if women engineers are less represented in a particular developer community, and you limit your search to that community you will likely end up with a worse gender ratio than companies with broader criteria. Second, if you want to hire a more diverse group, make a point of sourcing for it. Don’t just say, well we can’t do better because the candidate pool lacks diversity. If you care, make the effort. Same thing goes when organising a conference, recruiting a board, etc.

Brittany Wong

VP Marketing, Flare

Brittany is a marketing leader experienced in leading and building collaborative, high performance teams to drive market position, build demand and accelerate customer growth.

What does #ChooseToChallenge mean to you?

This is all about taking a stand for gender equality, and equality for all — and doing something about it. From what I’ve learned, gender inequality is at the heart of many injustices and socio-economic issues in communities and the world. Though many of us care about equality, few of us take action to drive change. “Choose to challenge” is a call to action to do something about it. 

At Flare, we believe in empowering every Aussie to live their best financial life. How do you approach this in your own life?

In my early twenties, I lived my best ‘party’ life, studied, traveled and worked crazy hours to start my career. But behind the scenes of all of this, I was always working to pay off my upcoming credit card bill. This trend went on for years, and I thought nothing of it. As I earned more, I spent more. It wasn’t until I was 25 when a girlfriend (that went out as much as I did), bought a house on her own without any financial assistance. I was floored. How did she do this? Weren’t we all spending our hard earned money frivolously?  When I asked her how she did it, she told me that her mom, who raised her and her sister on her own,  had taught them to put 20% of their earnings away every pay cheque since she started working at 16. My girlfriend followed her mom’s advice (which was mandatory at the start) and told me she never noticed the difference when it came to living life.  This simple habit was the difference between me (who had absolutely no money to buy a house) and her (who was a homeowner at age 25). 

I’ve learned that simple financial habits can go a long way. All you need to do is get started with one or two savings habits, then you can start investing and multiplying your wealth. 

When I was young, technology didn’t exist to support or educate people on financial habits, but today, it does. Anyone can empower themself to live their best financial life with the right habits, education and tools; and that’s why I’m proud of what we’re building at Flare. 

What advice do you have for businesses that are looking to build a more inclusive workplace?

Start somewhere. If you don’t believe building an inclusive workplace is important, then you can’t make progress towards it. 

My advice is to start small and build up from there. Find a passionate group of people who care about inclusivity,  identify a Project Sponsor (or senior executive) to support and raise awareness of the initiative,  and drive progress through action and programs that can be felt and experienced by employees. 

Janine Fry

Head of Customer Experience, Flare

Janine is a customer experience leader who has extensive experience in technology businesses.

What does #ChooseToChallenge mean to you?

For me it’s challenging the perception of women in the workplace, and more specifically in leadership. We should not need to mirror and mimic the behaviours which made our male counterparts successful. Successful leadership can be reflected in some of those non-traditional ‘success’ qualities such as kindness, empathy and tenacity; where you don’t need to have the loudest voice to be heard.

At Flare, we believe in empowering every Aussie to live their best financial life. How do you approach this in your own life?

Before becoming a teacher, my Dad was an actuary and created a home where we were able to have difficult conversations about money, where the art of deciding between wants and needs were regularly practiced and where instant gratification was not common. Dad had a saying ‘people first, then money, then things’ (I later discovered it was ripped from Suze Orman)! For us, it meant – comprehensive insurance for my folks (life, income, health), good schools for my sister and I, followed by savings, then needs, then wants. It’s an approach I continue to practice, and an approach which overtime has enabled me to focus on long term financial wellness. The key takeaway here is acknowledging that finance is a deeply-emotional topic for many folks and having conversations early with kids is vital.

My sister and I were raised to be fiercely independent and wildly curious, which I’m forever grateful for, as it has shaped my view on learning. Educating myself on the things I don’t understand to enable informed, balanced financial decisions has been a game-changer for me. 

What advice do you have for businesses that are looking to build a more inclusive workplace?

We all have our biases which have been developed and shaped by our experiences. For me, personally it’s acknowledging they exist and continuing to work to educate myself on that which I don’t understand. Assuming the best in everyone and giving myself time to deeply understand the experience of others. 

Appreciate the fundamental reality of human nature. That we all like to be given an opportunity to be treated as individuals in an environment where our individual needs are considered and catered for. When that is done in a genuine and heartfelt way, diversity and inclusion organically starts to happen.

Emily Butler

Head of Consumer Marketing, Flare

Emily is a strategic marketing and brand leader with 18+ years of global experience in digital, entertainment, e-commerce and startups.

What does #ChooseToChallenge mean to you?

For me this is all about speaking up when something doesn’t seem right, and elevating women’s stories at a time when their voices are more important than ever. There are plenty of traditional values being dismantled and challenged every day in Australia and around the world, but there’s always more work to do. I started my marketing career in media 20 years ago, when gender bias and casual sexism was just another day in the office. I honestly didn’t even know it was a thing, the behaviour was so normalised. Seeing my female mentors challenge what it means to be a working woman and parent today has been a big inspiration to me, and I’m always learning and acknowledging that I have a responsibility to lift other women up. 

At Flare, we believe in empowering every Aussie to live their best financial life. How do you approach this in your own life?

Women in Australia retire with 40% less in superannuation than men, as we’re more likely to be out of the workforce to have children or provide care for family members. Combined with the gender pay gap, this can significantly impact women in retirement. Additionally, up to 16% of Australian women will experience financial abuse in their lives, which essentially renders women powerless in relationships as their access to money is restricted by their partner. 

Developing a healthy, independent relationship with my money, and understanding how much I need to retire comfortably has been a big game changer for me. I had 5 superannuation accounts before I left Australia for New York back in 2011 — consolidating them via 5 different paper forms went very firmly into the too-hard basket as I packed up my life for the move. After I arrived in the city, I knew I had to get my act together and start adulting. I learned how to build my credit rating so I could rent an apartment. My now husband and I started saving — I am extremely fortunate to have a partner who shares every aspect of running our family 50/50. I opened a 401k retirement account as my employer made co-contributions — there is no compulsory superannuation system over there. I’m so grateful my boss at the time suggested I do this, as by the time I relocated back to Australia, my 401k was on par with what I had in those 5 superannuation accounts. 

I’m really proud of our vision at Flare because we’re meeting Aussies where they’re at, and giving them the tools they need regardless of how far along they are in their financial journey. It’s never too late to start building healthy habits. And consolidating your super is extremely easy these days, especially if your super fund prioritises the digital member experience.

What advice do you have for businesses that are looking to build a more inclusive workplace?

It’s important to acknowledge our biases, unconscious or otherwise, and give underrepresented groups a voice. My advice to leaders and hiring managers is to check your privilege at the door, and don’t assume you know the challenges everyone faces on a daily basis. Speak to your teams. Understand how they feel, and be proactive in addressing any concerns they have. Having an open mind when it comes to hiring a woman who might be returning to the workforce is hugely important — I’ve seen how hard women have to work to feel in control of their careers. In New York, I went back to work when my first child was only 4 months old. I expressed milk for my baby in a bathroom, twice a day, for 6 months. This was very “normal,” and while going back was my choice, plenty of women do not have this luxury. They simply can’t afford not to work, or they’re concerned about the impact an extended break might have on their career. 

Balancing work and family is hard — I really had no concept of this before I had children! I’m grateful to work at Flare alongside so many other parents, including our founders, Dan and James. They are both incredibly supportive and understanding when it comes to being a working mum and raising a family — and this should not be a rarity. Being human and empathising with each other is the key to a happy, inclusive workforce.

5 ways to help your employees improve their financial wellbeing

Every company has employee wellness on the mind. As a result, employers are increasingly investing resources into making sure their workers are physically, mentally, and emotionally taken care of so they can produce their best work. But there’s another type of wellness that has historically been overlooked but is becoming a bigger part of the conversation: financial wellbeing.

In this post, we’ll explore why financial wellness is such a critical component of overall wellbeing. We’ll also share five actionable steps you can take to improve financial wellbeing for your own employees. 

What is financial wellbeing, and why is it important? 

The Australian Securities and Investment Commission (ASIC) surveyed the general public to gauge their thoughts on financial wellness. The results informed a collective definition of financial wellbeing, which we shared below:

“Financial wellbeing is when a person is able to meet expenses and has some money left over, is in control of their finances and feels financially secure, now and in the future.”

Why is this idea of financial wellness so important? To understand the impact, we need to take a look at how a lack of financial wellbeing affects individuals. This report from AMP paints a picture of how an unstable financial situation can negatively impact employees: 

  • There are currently 2.44 million Australians suffering from financial stress
  • In the workplace, this results in two in five Australian workers experiencing financial stress during their careers – with nearly half feeling financially stressed for an average of six and a half years or more
  • Employees troubled by their financial circumstances take an extra 2.4 sick days per year and spend almost an hour per week dealing with money problems at work
  • This financial stress costs Australian businesses an estimated $31.1 billion per year in lost revenue

Looking at these statistics, it’s clear that financial wellbeing (or a lack of) can have a significant effect on productivity, absenteeism, revenue, and more. 

5 Ways to improve financial wellbeing 

The good news is that there are ways for organisations to improve the financial wellbeing of their employees. Below, we outlined five recommendations to help your employees feel more in control of their financial situations. 

1. Know your workforce

Taking a one-size-fits-all approach to financial wellness isn’t effective. To truly make a difference in the life of your employees, you have to know your workforce and understand their needs. Employee satisfaction surveys are a great way to uncover this information. For instance, let’s say that your survey reveals that the majority of your workforce can comfortably afford basic expenses with their existing salary. But what they struggle with is saving enough money for future milestones like buying a house or starting a family. 

In this situation, you may not want to invest all your resources into giving people more raises.  Instead, you want to focus on getting your employees the tools and training they need to learn how to manage their money better. This example demonstrates why it’s critical to know your workforce instead of making assumptions. 

2. Provide financial education  

Education is the most powerful tool when it comes to finances. Unfortunately, most of us have never received a formal education around important life skills like money management and saving for retirement. That’s why many people feel lost and overwhelmed when it comes to these topics.

HR leaders have an opportunity to step in and help fill in these gaps in knowledge. You can connect employees to resources – such as online courses or training led by professionals – that cover key financial topics. Similarly, you can also cover the cost of financial counseling for your employees and their partners. These various forms of education are a great way for workers to ask questions, make a long-term plan, and receive support around their financial goals.

3. Encourage positive financial habits 

Habits don’t develop overnight. They require daily, consistent practice to eventually take hold and make an impact on someone’s life. Given that we spend most of our waking hours at work, it only makes sense that many of our financial habits be developed in the workplace. 

But how exactly do you encourage your employees to develop positive financial habits? The best way is to show them by example. One way to do this is by making additional superannuation contributions to their accounts. By doing so, you’re demonstrating that you want to invest in their financial futures, and watching their accounts grow over time can motivate employees to make their own contributions. Make sure your workers also know that they can make personal super contributions during a financial year. This is a great way to reinforce good saving habits. 

4. Destigmitise conversations about finances

Historically, money was a taboo topic – especially in the workplace. Unfortunately, this stigma creates barriers when it comes to employees taking control of their financial health. If they don’t feel comfortable going to their HR team to ask questions about their salaries or financial benefits, then who can they turn to? Companies should strive to overcome these stigmas and encourage a culture where it’s ok to discuss financial topics. 

As HR leaders, there are a number of things you can do to make this a more widely accepted topic: host conversations about the most frequently asked financial questions by your employees; Train managers on how to have transparent conversations about things like salaries and raises; Host open office hours where people can come ask questions. The more you can normalise the conversation about finances, the more empowered your employees will feel to learn more about the subject. 

5. Create equal opportunities for success   

Finally, it’s important to create equal opportunities for success within your organisation. What exactly do we mean by this? This means being able to take a step back and gauge whether everyone at your company has the same ability to get promoted, receive a raise, and take advantage of the benefits that are offered to them. 

For instance, if you were to run an analysis on salaries across the board, would you find any discrepancies with regard to gender or race? If so, this is problematic because you’re lowering the chances of a specific group receiving a pay raise – something that could make a huge difference to their financial health. Another example: are you communicating your financial benefits in a way that’s accessible to all employees? If you have workers in manufacturing or are outside the corporate office, chances are that email and Slack won’t be their primary form of communication. So if you’re only talking about benefits in those channels, you risk having an entire segment of your workforce be unaware of the financial help you offer.

Your employee’s financial wellbeing can have a huge impact on other aspects of their health, as well as their performance at work. By investing in their financial futures, you’re not only helping reduce a significant burden in their lives, but you’re also helping the success of your business.

If you have any employees who are in need of support, be sure to check out Wellness@Work, a free hub designed to support HR and Australian workers by giving them access to free content.

If you’re looking for an additional HR software to support your business, Flare offers a free onboarding software with employee management and benefits. To learn more, please request a demo.

Every company has employee wellness on the mind. As a result, employers are increasingly investing resources into making sure their workers are physically, mentally, and emotionally taken care of so they can produce their best work. But there’s another type of wellness that has historically been overlooked but is becoming a bigger part of the […]