Discrimination is damaging to businesses for many reasons and has real-life repercussions that can affect the health, success, and bottom line of your company. Here are some of the risks that your business may encounter if utilizing any discriminatory practices.
Costly legal repercussions: There are extensive laws on the books that protect employees and potential employees from discrimination, including the Civil Rights Act, American with Disabilities Act, Age Discrimination in Employment Act, and laws that protect pregnant people in the workplace. And those are just the federal laws – state laws may have additional requirements and standards that employees need to follow.
If an employee brings a discrimination complaint against a company, even if the it’s unfounded, it can be expensive to defend your business against such accusations. If there is evidence to back up the claim, it can be even more costly to deal with and potentially lead to expensive pay outs to complainants. In fact, one 2018 article noted that discrimination in the workplace cases are actually on the rise, so it’s more important than ever to be diligent.
Lost or missed talent: Another way that discrimination can present itself as an expensive mistake for your business is through discriminatory hiring practices. If someone of a certain age, gender, or race isn’t hired because of those factors, you could be missing out on great talent in favor of an arbitrary bias.
Someone you hire could be less productive, less skilled, or less talented, which could be a huge loss for your company. Of course, this is a risk that you take when you hire anyone – that one candidate will in fact be a better choice than another – but it’s certainly not worth creating additional barriers to great candidate decisions because of discriminatory practices. How can you reduce bias in your hiring practices? Some research indicates that AI and HR analytics is helping in the recruitment and hiring process by minimizing discrimination in traditional hiring procedures.
Ruined reputation: A business that becomes known for hiring or firing based on discriminatory practices is going to be seen in a less favorable light. If a lawsuit is brought forth or negative Glassdoor reviews go viral, your company will be in the spotlight for the wrong reasons.
Knowing that your business is biased or engaged in discrimination is going to gain negative press, which might lose you clients, business, or even employees and potential employees. Most businesses want to avoid anything that will damage their reputations. Avoiding becoming a place that hires people or fires people for anything other than skills and job performance is likely going to be called discriminatory and affect your business negatively.
To avoid any of these negative consequences, it’s incredibly important for businesses to conduct regular trainings for new and existing employees, particularly human resources and people teams. It’s also necessary to make sure that there are posters and other signage to indicate that the business knows, understands, and shares that with their employees.
But it’s not necessarily enough to just do the bare minimum and avoid discrimination to keep your business out of trouble. More and more businesses are encouraging not just absence of discrimination, but diversity practices that can help bring in more ideas, experiences, and skills. This helps encourage more creativity and bring about more opportunities for your business.
Anti-discrimination laws exist to help protect individuals and give more people a fair chance at a successful career. They can also help protect your business, though, as discrimination in the workplace can be truly detrimental to any business that isn’t careful with its practices and policies.