Nudge theory: a missed trick?

The application of science in HR has garnered quite an interest this past decade; from neuroscience and behavioral economics to the psychology of judgement and decision making.

 

In his book Thinking, Fast and Slow, Daniel Kahneman established that our brains operate on two different systems of thought: System 1 provides the automatic reflex responses that remind us to duck if something is heading towards us and System 2 controls our inner consciousness, thoughts and processes.

 

But it was Richard Thaler’s nudge theory – the science behind influencing people through several subtle actions – that’s been getting most attention.

 

Nudging works on the principle that small actions can have a big impact on the way people behave:  encouraging but not forcing people to make better decisions. In technical terms, nudging causes our System 1 to override our rational processes when making the decisions that System 2 controls.

 

It became a key strategy in 2010, when the UK coalition government founded the Behavioural Insights Team – also known as The Nudge Unit. The Nudge Unit was advised by Thaler, who went on to win the Nobel Prize for economics in 2017.

 

When applied correctly, the beauty of nudging lies within its simplicity.

 

Take organ donations, for example: one of the best-known instances of the nudge theory that increased the number organ donors by 100,000 per year, simply by switching from an opt-in to an opt-out initiative. Or the polite reminder that caused a £30 million raise in income tax payments: in letters sent to late payers, recipients were reminded that their neighbours had already paid, nudging them to do the same.

 

It’s such a simple theory, but it works. It’s been yielding some impressive results, so it’s no wonder that it’s beginning to catch on in the world of HR.

 

Now, rather than mandating behaviours to create lasting change, HR professionals are starting to use the art of nudging to persuade employees to make better choices at work, applying Thaler’s theory from everything to well-being to pension take-up.

 

And the evidence shows that it works.

 

This made me wonder about the role of the recruiter. Although we are seeing a lot of investment in the use of content marketing to acquire talent, the application of nudging isn’t as prevalent as I would have thought, which makes me think the recruitment world could be missing a trick!

 

Perhaps it’s because jobs and careers aren’t a single isolated decision, but if I could place my bets, I’d say nudge theory could be the next big breakthrough in talent acquisition. Let’s see what the next five years bring…