Managers are prone to pursuing "value" in their hiring practices, i.e., searching for the most talented professionals at the lowest price. Typically, this pursuit has been ingrained through years of training in efficiency and cost-saving initiatives. However, this "value" hiring practice has an unintended consequence of perpetuating cohort pay bias, including the broad gender and race pay disparities that have recently come under fire. Continued progress in correcting cohort pay bias will require educating hiring managers on the business and societal ramifications of this bias and training them to think more holistically about the costs and benefits of diverse and unbiased recruiting.
In the 1990s, several of the most embarrassing client failures at some large global recruiting firms occurred when a hiring manager had "overpaid" for a recruitment. With candidate compensation data often vaguely outlined and unconfirmed, from time to time a client would discover that a candidate had negotiated successfully for a larger than normal increase in compensation as part of their recruitment. Having experienced the ire of unhappy clients on a number of occasions, many investment firms eventually adopted a requirement for candidate compensation declarations that could be substantiated, particularly before multiple year guarantees or buyouts were issued. This was in direct response to client hiring managers' expectations of value or cost efficiency in hiring. It was not done in pursuit of perpetuating cohort pay bias or with any intention of discrimination. It was an unconscious bias that was a byproduct of other important business goals.