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Indian graduates stand outside software company Oracle
Reuters
Indian job applicants stand outside an Oracle office in Bangalore.
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The US says Oracle is encouraging Indians to hire other Indians—and it’s killing diversity

By Ananya Bhattacharya

Indians have quite the presence in tech. Two of the industry’s most powerful executives—Google CEO Sundar Pichai and Microsoft CEO Satya Nadella—are of Indian origin, as are Adobe CEO Shantanu Narayen and Nokia CEO Rajeev Suri. In the startup world, $2 billion grocery-delivery platform Instacart was founded by Indian-born Apoorva Mehta.

The trend extends beyond C-suites: Indians were the recipients of the highest number (pdf) of US H-1B employment visas in 2013 and 2014, and in 2015 captured 72% of H-1B visas issued. According to a 2015 National Science Foundation report, Indians account for nearly 1 million of America’s scientists and engineers.

Nepotism also runs strong in India.  Nearly 85% of the country’s businesses are family-run, and Bollywood is dominated by just a few families. Even job-seekers with impressive resumes have to fall back on personal connections to find work.

Those dynamics are now playing out at Oracle, the $160 billion California-based software giant run by Larry Ellison. Earlier this week, the US Department of Labor (DOL) sued (pdf) Oracle for wage violations and hiring bias, alleging that the company displayed “hiring discrimination against qualified White, Hispanic, and African-American applicants in favor of Asian applicants, particularly Asian Indians.”

The DOL says the discrimination stemmed from biased hiring strategies like “targeted recruitment, and referral bonuses that encouraged its heavily Asian workforce to recruit other Asians and its reputation for favoring Asians.”

(Ironically, the suit also accuses Oracle of paying white men more than their non-white counterparts.)

The company denies the charges. ”Oracle values diversity and inclusion, and is a responsible equal opportunity and affirmative action employer,” says spokesperson Deborah Hellinger. “Our hiring and pay decisions are non-discriminatory and made based on legitimate business factors including experience and merit.” In other words, if Oracle has a disproportionate number of Indian employees—the company doesn’t disclose that breakdown—then it’s because Indians are consistently its best candidates.

There’s some research to support that. A 2007 study (pdf) by Southern New Hampshire University found that Indian leaders tend to be far more humble than their US counterparts, and also focus on long-term growth over short-term results. Having themselves overcome prejudice, many successful Indians also set up networking groups to mentor young talent.

But it’s also easy for the so-called “halo effect” to creep into hiring decisions. ”If everyone on your homogenous team has similar upbringings, then the likelihood of choosing someone with credentials, like universities or GPA, is higher,” explains Vivek Ravisankar, co-founder and CEO of recruiting platform HackerRank. ”Recruiters look for talent in the same places—MIT/Stanford—leading to bidding wars for pedigreed candidates and the illusion of a skills shortage.”

Skills-based hiring sites like HackerRank and Codefights, which hide applicants’ ethnicity and gender from those reviewing their applications, are one answer to bias in technical recruitment. But without a broader change in mindset, it will remain easy for not just Oracle but any company to conflate staff diversity with staff referrals from diverse employees.

“The concept of ‘cultural fit’…has been taken as the holy grail for hiring in many tech companies,” says Karla Monterroso, vice president of programs at non-profit CODE2040, which supports black and Latino professionals. “[But it’s] often applied incorrectly to filter for potential hires who look or act like the person doing the interviewing.”