Corporate India must face the truth

Caste and religion matter as powerful forces of discrimination in the private sector in India. It is only over the past few years that a number of companies and industry bodies such as the CII have been able to work with this issue. So, laudable steps for change have been taken and much more can be done.

It hurts me as a professional who has worked across sectors, countries and cultures to say that this discrimination still exists. It hurts because I, like many readers of this newspaper, am proud of my cosmopolitan attitudes, of the merit-based systems in companies and of their many drives for inclusion.

Also, there is indeed more opportunity to leave the bottom of the pyramid and move into the burgeoning middle class, primarily via private enterprise.

Whether or not this was the idea of India that was conceived as midnight chimed, it is certainly an India that many hope will take its rightful position on the world stage.

But the facts unequivocally state otherwise. They state that both caste and religion matter, to people’s detriment, in at least three ways.

First, they play a significant role in determining who gets called for an initial discussion with the private sector. Then they play an influential role when deciding whether a person gets the job or not because, essentially, of how merit is defined.

Finally, they matter when looking at who reaches the top in the system.

There are five kinds of responses to this data. First: “No, not in corporates.” Second: “Well, it’s called in-group preference and sanitised, but it exists everywhere.” Third: “Of course, it matters. Especially in family-owned businesses. But managing the family is far more difficult than managing the business. And family-owned businesses have their own hierarchy.”

Fourth: “Our systems need time to work. If a dalit were well-educated and well-spoken, he or she would make it.” (Essentially, at least the creamy layer would make it.) Fifth (and the most common): “What about competitiveness?”

Certainly, in-group preference calls upon all countries to examine systems of exclusion, including class exclusion. However, caste- and religion-based discrimination appear to be very different in some ways from in-group preference.

First, especially with the interpretation of caste, your birth is your destiny in terms of the work you can do. Second, caste- and-religion based exclusion infest our system at its roots allowing for little permeability.

Third, the pushback against even recognising that caste and religion make a difference is because of the terrible historical atrocities associated with both caste and religious discrimination.

Let us look at some data. First, even the creamy layer is considered whey on enough occasions to be factually documented.

A study by Thorat et al in 2009 suggests that social exclusion on the basis of caste and religion (for Muslim applicants) occurs at the stage of application sorting.

The controlled study showed that even when highly qualified male applicants applied to job postings, “statistically… applications that had high-caste Hindu names were more likely to result in a positive job outcome than those with Muslim or dalit names, despite their identical qualifications. The odds of a dalit being invited for an interview were about two-thirds of the odds of a high-caste Hindu applicant. The odds of a Muslim applicant being invited for an interview were about one-third of the odds of a high-caste Hindu applicant”.

Thus, the report clearly suggests that even when the creamy layer applies, there are firsts amongst equals.

Second, a number of companies use multiple methods to define merit. Data show that while technical tests are objective, interviews can be very biased.

Another study by Newman et al in 2009 shows that questions about family background often feed significantly into perceptions of merit.

Third, assuming an applicant gets selected, what are his chances of rising to the top? According to Ajit et al (2012), a survey of over a 1,000 corporate boards in India, which included both public and private companies that were publicly listed, showed that there was no caste diversity at all.

However, the private sector has begun several commendable efforts on affirmative action, led by bodies such as the CII. These efforts, which focus on employment and entrepreneurship, amongst others, should continue.

A number of companies are becoming clearer on how they recruit when deciding on merit. For example, the son of an army officer is more likely to be viewed positively than the son of a sweeper.

However, I personally have noticed that a number of companies are now asking the question: “How has your background shaped your skills?”, thereby allowing a far sharper definition of actual skills would come out.

Another notable good practice is sensitising the recruiting ecosystem such as consultants and job search agencies, to encourage applicants from all background.

Further, a practice being adopted, especially by some family-owned businesses, is that of making it clear about what kinds of personal or family-based employment relationships are allowed within the firm, so as to allow merit to flourish. The new corporate social responsibility law can help the private sector address some of the deeper systemic challenges by supporting educational initiatives that are truly inclusive.

While most credible educational NGOs look at learning outcomes, they almost always have inclusion as one component of their mission, either directly or implicitly. It is important that companies table the importance of this requirement. Competitiveness matters. Equally, the private sector needs talent now and in the pipeline.

However painful this issue of discrimination is, facing the truth sets us free to actually do something.

The private sector can thus become an even stronger force of social change so that India can continue to grow rather than flame out as a country of squandered promise

The writer is a senior HR professional specialising in leadership development, diversity and CSR