February 22, 2017

Tech giant accused of hiring bias in favor of Indian workers

Tech giant accused of hiring bias in favor of Indian workers

Last month the US Department of Labor sued software giant Oracle for wage violations and hiring bias, alleging that the company displayed “hiring discrimination against qualified White, Hispanic, and African-American applicants in favor of Asian applicants, particularly Asian Indians.”

The Department of Labor says the discrimination stemmed from biased hiring strategies like “targeted recruitment, and referral bonuses that encouraged its heavily Asian workforce to recruit other Asians and its reputation for favoring Asians.”

Nepotism runs strong in India. Nearly 85% of the country’s businesses are family-run, and Bollywood is dominated by just a few families. Even jobseekers with impressive resumes have to fall back on personal connections to find work.

Oracle denies the charges, saying “Oracle values diversity and inclusion, and is responsible equal opportunity and affirmative action employer. Our hiring and pay decisions are non-discriminatory and made based on legitimate business factors including experience and merit.” It suggests that if Oracle has a disproportionate number of Indian employees, then it’s because Indians are consistently the best candidates.

Vivek Ravisanker, founder and CEO of recruitment platform HackerRank explains how easy it is for the so-called “halo effect” to creep into hiring decisions. He says, “If everyone on your homogenous team has similar upbringings, then the likelihood of choosing someone with credentials, like universities or GPA, is higher. Recruiters look for talent in the same places—MIT/Stanford—leading to bidding wars for pedigreed candidates and the illusion of a skills shortage.”

IZA World of Labor author Ian Schmutte supports this view in his article How do social networks affect labor markets? He observes, “People choose with whom to socialize in general, and with whom to share job information in particular. A large body of sociological evidence supports the casual observation that people tend to socialize with people who are similar to themselves in some way. The term used to describe this is homophily.”

He explains that on the one hand homophily performs a screening role as good workers are more likely to know good workers. On the other hand, if social networks are stratified by race, ethnicity, and economic status, then referral networks can reinforce between-group inequality.

Read more of our workplace discrimination articles here.