We recently commenced recruitment for the Jenga Investment Partners, Business Analyst student role. Before embarking on this journey, we reflected and thought deeply about how we want to approach hiring. I'd experienced different sorts of discrimination, some conscious, others subliminal in the past when applying for jobs.
I remember applying to a boutique investment fund in the city, and I had the opportunity to meet with one of its managers. He mentioned, he only recruited engineering students because they are the most logical and hardworking people. As a finance student, I found this absurd, but I understood what he meant. He studied engineering, worked with many engineers in finance, and felt an engineering degree means you'll be the most logical investor. Understandable but false.
Bias and a causal link
Whenever people ask, what are the most valuable skills in the 21st century, I always reply, "critical thinking and self-awareness." By self-awareness, I mean being conscious of your strengths and weaknesses, your preferences and biases and what makes you, you. In investing, it's common for managers to recruit people from their similar backgrounds, but I asked myself, why does this happen?
Let's use Warren Buffett as a hypothetical example. I'm 90 years old, and I need to select the next generation investors for Berkshire Hathaway. I think I've done an excellent job; hence, I'll want to recruit someone like myself. So do I go for a candidate that's white, from Nebraska, studied Business Administration at Colombia Business School and drinks coke every day? Or do I recruit an individual that's passionate about finance, trustworthy, intelligent and has a strong work ethic?
You'll be surprised by how many recruiters select the former option. There are two main issues here; (1) we aren't aware of our biases (2) heuristics create false causal links.
It's fine to have some bias, but which?
In recruiting, it's critical to have some bias. But the real question is what type of biases. At Jenga, we explicitly mentioned the model candidates we look for: critical thinkers, passionate about business analysis, driven with a strong work ethic and independent with research. We selected these traits, not degrees, racial groups, nor gender preference because these factors do not impact an investors ability. Our bias lies on ONLY factors that have a CLEAR influence on an investors ability.
In my example above, I mentioned the manager who favoured Engineering students. Equating your degree, to your ability in being logical is some form of bias. In LSE, I've met very logical students with backgrounds in history, accounting and law. It's vital we, recruiters and managers, self-reflect and think critically about our biases and ensure we are conscious of them when making decisions. It significantly decreases the possibilities of false causal links and improves decision-making. Consider a scenario where a manager creates causal links with race and skill? Gender and skill? Religion and skill?
I always say that athletics is one of the most diverse industries. Why? Because it's easy to measure your skill. You either run sub 10 seconds, or you don't. There's less room for biases and false causal links. You aren't going to select the last position in a race for a relay team because his legs are long, and you think the longest means the fastest runner. Are you?
Diversity is a big issue in many industries we invest in at Jenga, and I hope managers and recruiters can acknowledge and factor their biases when shaping mental and company models/policies in hiring staff.
Dede Eyesan Founder and Managing Partners.