Cost of Bias: Addressing and Combatting Discrimination in the Workplace

Cost of Bias: Addressing and Combatting Discrimination in the Workplace

As the world becomes more equitable for all, the topic of bias cannot be ignored. In today’s world, emphasizing ethical values and practices is not only the right thing to do; it’s also critical for your bottom line. 

Whether conscious or unconscious, bias and inequalities can lead to significant monetary losses and drops in productivity, revenue, and innovation. It can also lead to reputational harm from being perceived as non-inclusive, a major blow for any business.

As the world continues to change, the potential cost of bias will only continue to grow. It is critical to address this topic head-on and know your options to mitigate bias and the risks that stem from it.

Unconscious Bias

It’s nice to imagine that most businesses and people today are not intentionally biased. However, bias is everywhere and almost impossible to avoid. Unconscious bias is a vital topic to become familiar with simply because of how common it is.

An article from True Office Learning describes the phenomenon as stemming from our ancestors, who grouped people and things to make quick decisions and thus, survive. While unconscious bias is everywhere, it is something your business cannot afford to ignore. A study from Coqual highlights some key statistics on the topic:

  • Large company employees are nearly three times as likely to disengage when there is perceived unconscious bias. 
  • Gallup estimates that active disengagement costs U.S. companies $450 billion to $550 billion per year.
  • Those who perceive bias are more than three times as likely to lean towards leaving their current jobs within one year.
  • Those who perceive bias are over two times more likely to say that they have withheld ideas and market solutions over the previous six months.

Risk Consulting – Management Training is Critical

Now that we’ve covered just some of the potential costs of bias, it’s time to cover ways to mitigate this risk. 

Management training is one of the critical pillars to preventing bias in the workplace. The U.S. Equal Employment Opportunity Commission (EEOC) advises businesses to train management staff on their discrimination policy while clearly stating to all employees that any discrimination based on race, color, religion, sex, national origin, disability, age, or genetic information (including family medical history), is illegal. 

The EEOC advises management staff to know their responsibilities in the following areas:

  • Non-Discrimination: Managers should ensure that applicants and employees are not discriminated against or harassed for any reason.
  • Reasonable Accommodation: Managers should know how to recognize and respond to requests for reasonable accommodations for things like medical conditions or religious reasons.
  • Responding to Discrimination Complaints: Managers should be able to recognize and respond promptly to complaints of discrimination.
  • Avoiding Retaliation: Managers should ensure that applicants, employees and former employees are not punished for reporting discrimination.

In addition to management training, senior leadership should also take steps to actively combat bias in the workplace. An article from Forbes features an interview with author and inclusion expert Sylvia Ann Hewlett, who suggests six inclusive leadership strategies:

  • Ensure all voices are heard.
  • Make it safe to propose novel and new ideas.
  • Give actionable feedback to your team.
  • Take and implement advice from your team. 
  • Empower decision-making among your team.
  • Share credit for team success.

Insurance Policies to Consider

While taking proactive steps as an organization is the best way to combat bias and mitigate costly risks, there are several insurance solutions to consider as well. 

An Employment Practices Liability (EPL) policy can protect your organization in the event of allegations of bias or discrimination. EPL coverage is currently experiencing a hardening cycle due in large part to increased litigation across the board and high profile discrimination cases such as former pro football player Colin Kaepernick’s lawsuit against the National Football League. 

With this in mind, it will be essential to work directly with a trusted advisor to discuss your options for preventing bias and purchasing adequate coverages to protect your business. 


risk matters
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As the world continues to change, the ability to adapt will be crucial for all businesses. Bias in any form cannot be tolerated, and it is critical not only to mitigate it but also to combat it head-on.

RCM&D, in collaboration with Risk Cooperative, has developed an informative chart to help your business fully understand the potential consequences of bias. This one-page document is an excellent resource for any business with questions about how bias can negatively impact their organization as a whole.

Talk to a trusted RCM&D advisor today for more on risk mitigation strategies and insurance solutions to protect your organization from the cost of bias.