Featured in today's newsletter:

  • ‘Motivated reasoning’ and what it means for diversity efforts.
  • The trend in child-care costs for American workers.
  • Asking colleagues for three words about yourself.

AI and Work Radar

  • A New York City law regulating the use of AI and algorithmic tools in hiring and promotion decisions took effect this week, the first of its kind in the country. It requires employers to disclose the use of these tools to all candidates, reveal the personal data collection practices when asked, and conduct annual, independent audits to review AI tools for bias.
  • Zoom has released a new feature, Intelligent Director, which uses AI to improve the experience of hybrid meetings by focusing on individuals’ faces in a meeting room, even if they turn their heads or even move to a different part of the room. That way, each participant’s face shows up clearly for attendees signing on virtually, allowing everyone to track colleagues’ body language and other nonverbal cues.
  • Mastercard has incorporated AI in its recruiting process with an AI-based game that gives candidates specific tasks without recording demographic data. If applicants successfully complete their assigned tasks, they advance to the next interview round.
  • Researchers at Oxford University have developed an AI model that can predict top-performing private equity funds based on fundraising prospectuses more accurately than many institutional investors.

Focus on What Makes Managers an Obstacle to Diversity Progress

New research has identified a major hurdle to workplace progress on diversity, equity, and inclusion: managers’ blindness to structural inequities within their own organizations.

“Such resistance may originate from the managerial position itself,” write the authors of the study in the Academy of Management Journal, arguing that as workers assume supervisory responsibilities, they identify more strongly with their workplace, which in turn makes them less attuned to its flaws.

For insight into how this bias works and its effects, as well as tactics for how to mitigate it, we spoke with study co-author Christopher To, an assistant professor of human resource management at Rutgers University. Here are excerpts of our conversation, lightly edited for length and clarity:

Can you explain the psychology behind the pattern your paper identified?

When people think about why managers resist diversity initiatives, they normally point to things like demographics, such as being a white male or ideologically conservative, things like that.  That's absolutely true. At least, that's what the research suggests. We're showing that there's something else on top of that: Managers resist diversity initiatives because, well, they're managers. They're motivated to believe that their own workplace contains less inequity.

It comes down to what's known as motivated reasoning. That's just a fancy way of saying that we distort information so that we have positive views of our own workplace. Anyone who follows a sports team knows about this. If you're watching the game, you'll always see that the referee makes good calls on behalf of your team and bad calls against your team. That's motivated reasoning.

In this case, managers’ favorite sports team is their own company. They're motivated to maintain positive views of their own company, because who wants to be responsible for a department or workplace that contains inequity? So what happens is managers, because of this motivated reasoning, are motivated to view their workplace positively, and they see less inequity to begin with. As a result, they're less likely to support diversity initiatives intended to reduce that inequity.

What are some of the other factors that drive organizational identification?

Power is certainly one reason. Certainly things related to tenure, how long you've actually stayed with the company. But usually it has to do with things around culture. How much do they actually enjoy the company? How much do they enjoy being around managers? It's typical things related to satisfaction. The more satisfied you are with the company, the more likely you are to be identified with them.

We almost always think of organizational identification as a good thing. It leads to better commitment, it leads to more productivity, it leads to better engagement. We want our workers to be identified with the workplace. But there are some downsides—one of them being that you just may become blind to some of the issues within your workplace.

How can employers encourage organizational identification while simultaneously encouraging employees to remain clear-eyed about problem areas?

One solution that both practice and data seems to highlight is really just data, giving data to managers about the potential inequities in their workplace. Let me provide a quick story: Marc Benioff, the CEO of Salesforce, is known to be very ideologically pro-diversity initiatives. But when two of his female executives went up to him and said, ‘Hey, look, we may have some pay discrepancies in our workplace, his initial reaction was just, ‘There's no way that this is possible.’ What ended up getting him out of that belief was actually seeing the concrete data about pay and inequity within his workplace.

In our paper, we had one study where we took managers and put them into one of two groups. One group, we asked them to just think about a typical day in the office, and in the other group, we asked them to think about times where they saw inequity in the office. And it turns out that managers who were asked to recall inequities ended up allocating much more funding to diversity initiatives. What that suggests is that forcing managers to really confront the inequities in their own workplace on a day-to-day basis, whether it's these data dashboards or recalling specific examples that can challenge this motivated reasoning, is effective.

How do you prompt that reflection in a way that doesn’t lead to resistance?

Some companies are including equity as part of their data dashboards, where they have things related to pay, potential pay discrepancies, potential performance appraisal differences, potential metrics around leadership opportunities, things like that. That's certainly the most intuitive one for me.

Another one could be: We ran a study where we told people about the not-here bias, and we asked people to think about how the not-here bias applied to their own workplace. It's almost like another way of asking them to think about inequities in their own workplace, but it's a more indirect way of backing into it. You could summarize this not-here bias and then simply just ask people, as part of a training session or as part of a meeting, to really think about how these biases are reflected within their own workplace.

I'll give you one more. A lot of these ideas are based around the idea that good organizations don't contain inequity. And maybe one thing we can do is change the narrative around that. It's not that good organizations don't contain inequity, because if that's the case, then managers are motivated to believe that there's no inequity within their workplace. Instead, maybe you can change what defines a good organization, so that good organizations are the ones that actively acknowledge inequities in their workplace and are taking active steps to combat it. It's another indirect way of trying to address the issue.

Read a full transcript of our conversation, including the type of data most likely to sway managers and how to adjust DEI training to account for the “not-here bias.”

What Else You Need to Know

On average, American families are spending 27% of their household income on child-care expenses. That cost is nearly four times the US Department of Health and Human Services benchmark for child-care affordability—7% of household income—according to the Care.com 2023 Cost of Care Report.

  • In the past 10 years, child-care costs have increased in absolute terms each time Care.com has conducted its annual report, which is based on surveys of 3,000 parents. This year, half of all parents surveyed reported feeling more concerned about the cost of care than they were at the same time last year.

“Hot labor summer” continues in Los Angeles as hotel workers go on strike, following successive strikes by school employees, dockworkers, and screenwriters. Members of Unite Here Local 11 are demanding pay raises and expanded benefits on the picket line while members of the Writers Guild of America continue to strike for a better contract with studios.

  • In recent months, Los Angeles workers have successfully used strikes to secure more beneficial contract agreements,  including dockworkers who secured a tentative contract deal in mid-June and school district employees who went on strike earlier this spring.
  • UPS workers could soon join the hotel workers and writers on the picket line, as contract negotiations between UPS and the International Brotherhood of Teamsters broke down earlier this week, edging the union closer to striking nationwide.

Minimum wage increases took effect in states and localities across the country this week. On July 1, minimum wage rates increased in Connecticut, Washington, DC, Nevada, and Oregon, as well as in cities and counties including Los Angeles, Chicago, and Montgomery County, MD.

  • Washington, DC, increased the hourly minimum to $17 and Connecticut raised it to $15, for example.
  • The federal minimum wage remains at $7.25/hour and has not increased since 2009. It applies in 20 states, where there is no specified minimum wage or the state’s minimum wage is below the federal level.

Remote work is here to stay, even for lower-income workers and those with lower levels of education. On average, Americans spent 5.25 hours per day working from home in 2022, two hours more than the 2019 average, according to the Labor Department’s American Time Use Survey.

  • Among the lowest 25% of earners, workers spent three more hours a day working from home compared to 2019, and employees with only a high-school degree also added an average of three hours working from home. The rise of remote work in customer service, data entry, and tech support is driving much of these increases.
  • Men returned to offices at greater rates than women and were generally less likely to work from home. In 2022, just 28% of men spent at least part of their day working from home, compared to 35% in 2021. For women, the number of workers who worked at least partly from home was 41% in 2022, a slight decrease from 41.5% in 2021.
  • In the EU, lawmakers have signed onto a non-binding document that promises increased protections for remote workers, including prohibitions on tracking workers’ computers and regulations on contacting employees outside normal working hours.

One-third of LGBTQ workers are trying to leave their jobs for a more inclusive employer. Among respondents who identified as ethnic minorities, that number rises to 52%, according to a recent report from Deloitte, based on survey data from 5,474 respondents across 13 countries.

  • Over 3,000 Starbucks workers across the US went on strike to protest the company’s alleged lack of support for the LGBTQ community. Organizers say that the company placed restrictions on employees’ display of Pride decor, which Starbucks has denied.
  • In spite of backlash against LGBTQ-pride ads, a majority of Americans have no problem with queer representation in brand marketing. Some 75% of non-LGBTQ people are comfortable seeing LGBTQ people in ads, according to GLAAD’s 2023 Accelerating Acceptance survey.

Here are some of the best tips and insights from the past week for managing yourself and your team:

  • Check confidence levels for deadlines. Get honest feedback on the progress of a shared project by asking all team members to rate their confidence level that the project will be completed on time, whether green, yellow, or red. Ask them to show their responses at the same time—on paper if you’re meeting in person, or in the chat if you’re meeting virtually.
  • Ask for three words. Managers can solicit fast feedback from reports by asking all team members to answer one question: “What three words would you use to describe me at my best?” The answers can help you understand how your team perceives your leadership and quickly gauge whether your intent is matching your impact.
  • Write handwritten messages. Cut through the noise of digital communication by handwriting and delivering physical notes to colleagues and partners to add a human element to correspondence, creating new opportunities to strengthen relationships.
  • Highlight skills in job postings. Get specific about the skills required to succeed in a position when recruiting for a role. New LinkedIn data suggests that listing skills increases the number of prospective applicants who view the posting and apply for the job compared to postings without skills information.

Coda

Where the grass isn’t always greener. Companies are ditching manicured grass lawns in favor of native plants on corporate campuses.

  • In addition to lowering maintenance costs, more natural landscaping has ecological and sustainability benefits, including reducing water use and providing habitats for native animal species.

The handbook for this new era of business doesn’t exist. We’re all drafting our own as we go along—and now we’d like to start doing so together. You can sign up here to receive this briefing by email.