We make decisions based on what we believe to be true. Our brains organize the world in categories so that we can make quick decisions. This helps us anticipate and avoid danger.

But this same mental process can lead to discrimination in hiring. For example, one study found that minorities with ethnic-sounding names have a better chance of getting further in the process if they “whiten” their names. Twenty-five percent of resumes with “whitened” names moved forward in the hiring process as opposed to only 10% of resumes with ethnic/racial markers intact. That’s an alarming difference that has a significant, negative impact on recruitment.

This is unconscious bias. Our brains make assumptions about the people we interact with even if there isn’t any proof that these assumptions are true. We all have biases we aren’t aware of, and we all bring them to work. Here’s why that matters.

What Is Unconscious Bias?

Conscious biases are prejudices directed towards individuals or groups based on factors such as race, gender, sexuality, nationality or socioeconomic background. When someone holds a conscious bias, it is overt and intentional. In the workplace, it can result in overt discrimination. But unconscious bias is just that — unconscious. Unconscious bias affects our perceptions in ways we don’t recognize. Everyone is subject to unconscious bias. It’s how our brains operate.

“Unconscious bias is a way that our brains create shortcuts,” says Jennifer Labin, Chief Talent and Diversity Officer at MentorcliQ. “We're hard-wired to find trends and connections between things, so unconscious bias is a way that our brains create mental shortcuts to associate information with groups of people.” Unfortunately, this leads to making assumptions about individuals that often fall in line with stereotypes. And these biases become even more problematic when they affect our behavior, Labin points out.

How Does Unconscious Bias Impact Hiring?

Bias narrows our talent pool and prompts us to hire people who are most like us. Assumptions about a candidate’s race, gender or religion have been proven to have a significant impact on their chances of moving forward in the hiring process. In the aftermath of the 9/11 terrorist attacks, the EEOC saw a 250% spike in religious-based discrimination cases against Muslims or people perceived to be Muslim.

Employers perceived these individuals to be associated with a violent group based solely on their dress and religion. Biases affect other groups as well. For example, candidates with criminal records often have a difficult time during the application process — even if their offenses were nonviolent and many years in the past. “There’s so much amazing talent who would be able to find employment if their resumes weren't put in the trash pile immediately,” points out Jennifer Brown, founder and CEO of Jennifer Brown Consulting.

Our assumptions feed our stereotypes and prevent us from seeing people as individuals. The most common type of unconscious bias is affinity bias, a preference for people who are most like ourselves or people we know, Brown points out. “We tend to recruit and hire people based on what successful candidates have looked like in the past,” Brown says. “We go into the recruitment process with a bias towards certain qualifications or educational backgrounds.” This leads to moving candidates that are most similar to existing employees further into the process, creating homogeneity across the organization.

Another common type of unconscious bias is confirmation bias. We automatically fit the people we encounter into categories, but those categories aren’t always true or favorable. “We tend to fill in the blank with stereotypes or assumptions,” Labin says. For example, we might assume that someone who attended an Ivy League school is an excellent candidate but that a community college graduate is not.

What Does Unconscious Bias Cost Your Business?

Unconscious bias and a lack of organizational diversity can take a huge toll on your business. Giving more candidates with diverse backgrounds a chance to demonstrate their skills and talent helps you find better talent and build a more diverse organization. Bias in the workplace can also impact employee engagement and retention. Employees who work at large companies and perceive bias at their organization are three times more likely to be disengaged, and 31% of them say that they plan to leave their current position in the next year. Ethnic minorities alone in the U.S. have $3.9 trillion in buying power, and that figure doesn’t account for other groups like women and LGBTQ+ individuals. “The world of consumers, customers and clients is diversifying,” Brown says. “When you're trying to do business in a diversifying world and you have a homogeneous workforce and leadership, it’s seen as a mismatch of interests.” Non-diverse organizations are less likely to meet the needs of an increasingly diverse society.

There are other benefits of a diverse workforce, as well. Diverse employees bring diverse experiences and skill sets to work, which increases innovation and supports employee performance. But before we can reap the rewards of diversity, we have to be aware of our own biases. “It takes a very courageous and strong-willed person to recognize there may be something about how they work that isn't ideal and may have a negative impact on others,” Labin says. We can take the first step by recognizing what unconscious bias is and how it affects us.