Events

Introduction

“Black Lives Matter protests moves corporate D&I initiatives center stage”¹

“CIOs double down on D&I to build stronger businesses”²

“Amazon will examine its employee review system after claims of racial bias”³

These are just a few of the headlines published in the last 12 months on diversity, equity, inclusion, and belonging (DEIB) efforts by companies. Given the growing momentum in the space, especially since the social justice movements of 2020 spread globally, we wanted to better understand how orgs are measuring and monitoring their DEIB efforts via people analytics.

We looked at more than 60 academic and business articles, reports, and books for this literature (lit) review. This article summarizes the themes from the lit:

• Analytics for DEIB is more important than ever
• DEIB analytics is more than diversity metrics
• Predictive analytics for DEIB can help plan for the future
• Don’t forget about qualitative data
• Address issues of privacy and ethics

Much of the literature that we reviewed for this topic focuses on why analytics should be used to support DEIB efforts. However, some shining pieces did go beyond the “why” to discuss how companies can go about collecting and utilizing DEIB data. We take a closer look at these 5 themes in the following sections.

Analytics for DEIB is more important than ever

It's not surprising that we found a large portion of the lit focused on explaining why analytics is important for DEIB. As pointed out by 1 author:

“Research and data must play a role when it comes to implementing D&I strategy that actually moves the needle on equity. If you don’t collect data, it’s hard to diagnose how your company is performing. If you don’t track data, you won’t know how you’re improving.”⁴

Several recent articles call out the urgent need for it, especially now, as the COVID-19 pandemic and social movements have spurred companies to reexamine how they drive equity. If we look at the recent commitments to DEIB made by some of the biggest companies—such as:

• Facebook tying improving employee diversity to executive performance reviews⁵
• Target’s aim of increasing representation of Black team members by 20% by 2023⁶
• Starbucks’ goal of BIPOC representation of at least 30% at all corporate levels, and at least 40% at all retail and manufacturing roles by 2025⁷

—then, we see that not one of these goals can be achieved without access to data and analytics.

DEIB analytics is more than just diversity metrics

While diversity and representation metrics remain foundational to DEIB efforts, we’re pleased to see several articles push orgs to collect and use data beyond representation metrics. One of the ways orgs can go deeper on metrics is by looking at experience data for different groups of the employee population. According to 1 author, orgs need to look at hard data:

“Are they invited to social gatherings? Included in meetings? Receiving proper mentorship? Looking at these interactions—where discrimination, microaggressions and lack of support often creep in—will reveal what’s truly derailing efforts to improve diversity.”⁸

These data can be helpful in measuring inclusion. Existing engagement surveys or specific pulse surveys can ask employees about concerns around inclusion. Question statements can be used by orgs to build an inclusion index and track it over time, including:

• Employees are valued for their differences and their unique contributions
• Employees can voice their opinions without fear of retribution or rejection
• People are rewarded fairly according to their job performance and accomplishments
• I have confidence in my company’s grievance procedures

These questions can be supplemented with check-ins, exit interviews, network data and other data to identify existing gaps.

Predictive analytics for DEIB can help plan for the future

Articles that focus on applying predictive analytics for DEIB talk about spotting the right patterns and identifying a potential issue before it turns into a problem. Predictive analytics can be a powerful tool to empower orgs to make smarter decisions about their DEIB efforts.

The lit contains examples of companies that are already using predictive analytics to support DEIB, including:

• Whirlpool—to help steer the company away from a “…myopic focus on intake, while ignoring potential effects of retention risks and advancement challenges for diverse populations.”⁹
• Walmart—to model and forecast techniques to understand the future through such questions as:
  • What could happen?
  • How can we arrive at the destination sooner?

Every quarter, diversity leaders and business leaders meet to review DEIB goals, as well as share insights from the data.¹⁰

• International Paper—to analyze expatriate compatibility: Predictive analytics, based on past behavior, family dynamics, global acumen, and cultural agility, can forecast which employees would fare better with a global move. ¹¹

Don’t forget about qualitative data

While not a recurring theme, we think the reminder about qualitative data is an important point made by some articles that deserves a mention. Very often, when we talk about data and analytics, we instantly think of hard numbers, dashboards, and spreadsheets.

DEIB and analytics leaders might find themselves trying to persuade or convince some stakeholders about the merit of qualitative data—and part of that challenge might require redefining what “data” means for the org.

Individual stories and experiences are an important piece of the puzzle. Interviews with employees can help leaders supplement quantitative data to get a holistic picture. As 1 author stated:

“Statistics don’t capture what it feels like to be the only black team member.”¹²

Some examples of the types of qualitative data that can be used include:

• Interviews
• Focus groups
• Textual analysis of written performance reviews
• Analysis of exit interview notes
• Analysis of hiring memos

However, the lit does offer some limitations to using this data. For example, if companies aren’t consistent or comprehensive in their qualitative analysis, then biases can creep in.

Address issues of privacy and ethics

No discussion about people analytics—especially when it involves sensitive DEIB employee data—can be complete without taking into account issues of privacy and ethics. And we’re glad to see a number of articles point out this issue. As one of the authors said:

“You want to be very careful of how you’re protecting the data and how you’re making sure that your data is being used to make fair and equitable decisions on people.”¹³

So, how can orgs best deal with this issue?

One way to maintain employee privacy is through data aggregation to ensure no one’s data is singled out. However, this could be challenging for small companies that may only have a few people from a particular demographic group.

Data ethics and privacy becomes even more important when collecting passive data on employees. Companies can be more responsible and ethical about collecting such data by:

• Being transparent with employees about the data collected and who will have access to it
• Sharing that data with employees
• Being clear about the types of analysis being run on the data collected on employees and how those data are used

What caught our attention

Of the lit we reviewed, several pieces stood out to us. Each of the pieces below contains information we found useful and / or intriguing. We learned from their perspectives and encourage you to do the same.

The Next Generation of Diversity Metrics: Predictive and Game-Changing Analytics

Brian Baker and Michael Collins (edited by), Diversity Best Practices, 2013

Explains how predictive analytics, when used correctly, can support areas such as retention, development of a leadership pipeline, analysis of leadership and talent gaps, and creating a general talent pipeline.

"Predictive analytics will soon offer the make-or-break evidence needed to support every business case, every new project proposal. For diversity practitioners, predictive analytics offers more: A powerful tool to be smarter about inclusion efforts—which ones to ditch, which ones to double down on, which ones to invent.”

Highlights:

• Link the hiring algorithm with recruitment of candidates from diverse backgrounds to revisit high-potential resumes and analyze retention data
• Shift conversations from reactive debates to proactive consideration
• Use predictive analytics to gain insight into what is reasonably attainable for companies in the future

Strength in Numbers: Using Data to Track Diversity and Inclusion

Marianne Bertrand, Caroline Grossman, Mekala Krishnan, Promarket, The Stigler Center at the University of Chicago Booth School of Business, October 2020

Explains how no simple solution is going to cure all DEIB woes. Change needs to be deliberate and transformational, which takes time.

"People arrived at quotas as a panacea, as the silver bullet. And it’s great that it has led to increased representation on boards, but that’s really not had the kind of spillover effects that people had hoped."

Highlights:

• Quotas for executive boards, while not showing any negative effects, aren’t the transformative policy that many thought it would be
• Culture change takes time—anywhere from 5-7 years for change to really start to trickle through the org
• Change the norms: For example, instead of lengthening the maternity leave policy which separates women from the labor force for longer, create a parental leave policy that encourages both parents to take time off, leveling the playing field

Here’s How to Wield Empathy and Data to Build an Inclusive Team

Interview with Ciara Trinidad, Head of Diversity, Inclusion, and Belonging at Blend, First Round Review, 2018

Explains that the key to building the strongest, most diverse team is understanding and believing in why you’re doing it. Knowing the reason behind it gives momentum to the initiatives and gets people onboard.

"Discussion gives muscles to data—especially around D&I. Without it, a dashboard is a depository. A dialogue becomes a monologue, which eventually becomes silence."

Highlights:

• Partner with the HR operations specialist to learn what data is stored where; use the fields needed to help create a dashboard that provides a meaningful narrative
• Try different analyses to discover which are the most revealing. Some examples might be:
  • Analyzing hires by month, by team which can show how recruiters are faring against DEIB strategies
  • Analyzing hires by month, by race which can reveal an org’s internal biases
  • Analyzing hires by tenure which can reveal when people leave and why
• Present the data to every person who has a stake in the company in the clearest, most digestible way
• Keep the lines of communication open; consider using your existing talent as your DEIB professionals and pay them for that work

Actionable Diversity and Inclusion Analytics with Philips’ Toby Culshaw

Joe Macy, Gartner, 2019

Provides a case study into how companies can leverage partnerships for DEIB analytics, and making sure how data can be made comprehensive and presented in a way that’s easy to digest.

"Because of the partnerships with internally facing HR analytics and reporting teams, the Talent Intelligence team could access information already available at Philips and avoid starting from scratch to find the needed information. The partnerships also ensured the different teams were on the same page and understood how to impact D&I at Philips."

Highlights:

• Break the project down into 3 smaller phases:
  • Gather internal data to understand the current state by partnering with the HR analytics team
  • Gather external data to understand the feasibility of changing the current state by looking at the markets in which Philips operates
  • Synthesize the internal and external data in a segmented way to drive action
• Present data by creating easy-to-consume materials designed to drive action
• Thoroughly understand the competitive landscape worldwide to find the right talent and understand the feasibility of diversity goals

Delivering On Diversity and Inclusion: How Employers Can Achieve Measurable Results

White Paper, Visier

Encourages orgs to move away from the traditional top-down approach to D&I practices and, instead, empower frontline workers to initiate change. This approach must include data that’s readily understood by all and looks to the future instead of criticizing the present.

“When data can be accessed in a way that facilitates exploration (without the need for a data science degree!), it can help organizations understand where to focus their talent efforts to achieve broader goals.”

Highlights:

• Avoid common data pitfalls, such as measuring diversity as a blanket number and prioritizing reports over insights
• D&I taskforces are more effective than top-down approaches to change
• Unify data from multiple sources, so that users can dig deeper into the data
• Utilize D&I analytics to:
• Compare the org to the most recent EEOC benchmarks
• Clearly communicate changes and diversity through dynamic, real-time visual storytelling
• Demonstrate how D&I initiatives have an impact on business performance metrics
• Understand engagement among diverse employees, and monitor the impact engagement has on turnover and exit patterns

Additional Reading Recommendations

1. “Better People Analytics: Measure Who They Know, Not Just Who They Are,” Harvard Business Review / Paul Leonardi & Noshir Contractor, November-December 2018, https://empowerment.ee/wp-content/uploads/2020/10/Better-People-Analytics-Measure-Who-They-Know-Not-Just-Who-They-Are.pdf
2. “15 Ways People Analytics Can Improve Workforce Diversity,” Techfunnel.com / Rosie Harman, August 2020, https://www.techfunnel.com/hr-tech/people-analytics-improve-workforce-diversity/
3. “Why you should apply analytics to your people strategy,” McKinsey & Co., The McKinsey Podcast / Simon London, Bryan Hancock & Bill Schaninger, April 2019, https://www.mckinsey.com/business-functions/organization/our-insights/why-you-should-apply-analytics-to-your-people-strategy
4. “Support Diversity, Equity, and Inclusion with People Analytics,” Human Capital Institute, Nine to Thrive / Phil Willburn, https://forms.workday.com/en-us/webinars/josh-bersin-belonging-diversity-phil-willburn/form.html/dl/3?step=step1_default
5. “4 Things Walmart Learned About Using Data to Drive Diversity,” The APQC Blog / Elissa Tucker, September 2019, https://www.apqc.org/blog/4-things-walmart-learned-about-using-data-drive-diversity
6. "How CEOs and CHROs Can Connect People to Business Strategy", Harvard Business Review Analytics Services, 2017, https://hbr.org/resources/pdfs/comm/visier/HowCEOsandCHROsCanConnect.pdf
7. “Data And Diversity: How Numbers Could Ensure There’s A Genuine Change For The Better,” Forbes.com / HV MacArthur, August 2020, https://www.forbes.com/sites/hvmacarthur/?sh=58909861a902

DEIB & Skills: We Found What We Expected

Our hope (wish? dream?) that we'd overlooked a treasure trove of articles on DEIB and skills did not come to fruition. Instead, as expected, our literature review turned up numerous articles explaining:

• How leaders can become more inclusive
• The role managers can play in promoting DEIB
• The strategies orgs should put in place

But, missing from our lit review: The specific DEIB skills that individuals should or can develop, as well as what role learning can play in the development.

We looked at more than 50 academic and business articles, reports, and books for this lit review. This article summarizes the 5 key themes that emerged from the literature. But before we dive into them, we first want to touch upon a few things that surprised us.

A few things surprised us

We did still find a few interesting nuggets from our literature review, such as:

• While much is written about DEIB-related courses and trainings, very little exists on the skills that foster DEIB and how they can be developed.
• We found 2 reports with in-depth research on the skills that impact DEIB (we share details on these publications below).
• Increasingly, storytelling is becoming more essential for knowledge-sharing and building a culture of trust and collaboration (areas that impact DEIB)—but no existing literature makes the direct connection to DEIB nor sees it as an important skill for it.

5 THEMES FROM OUR LIT REVIEW

In this article, we summarize the key insights we learned:

1. Traditional diversity training doesn’t work
2. People look at DEIB competencies, not skills
3. Skills for DEIB transcend individual roles and orgs
4. DEIB skills should be part of organizational learning
5. DEIB skills are in demand, but we don’t know how to teach them

Traditional diversity training doesn’t work

A recurring theme on this topic is the ineffectiveness of traditional diversity and unconscious bias training. In fact, research has shown that this kind of training may result in awareness among underrepresented groups of the bias-driven barriers that exist within an org while having no effect on the behaviors of the majority represented population.¹

The positive effects of diversity training rarely last beyond a day or two—and a number of studies suggest that it can activate bias or spark a backlash.

However, there’s considerable research that also focuses on ways orgs can make such training relevant and useful, by making some crucial adjustments to it, such as:

• Being intentional about the outcomes and clearly defining them
• Diversifying the training content
• Removing the assumption that individuals at all hierarchical levels experience DEIB similarly
• Articulating specific and realistic expectations
• Consistently evaluating people to track changes and nudging them to take action

All of these suggestions point toward helping people learn something that they can apply in their work—skills.

People look at DEIB competencies, not skills

We found quite a bit written about competencies that leaders, managers, and employees need to drive meaningful change for DEIB. A common thread among the literature is the need to focus on developing competencies that are both individual- / person-focused, and those that impact the broader team and org. Cultural competency is one of the most frequently referenced areas.

“Cultural competence is the ability to recognize that people have different experiences than you, to understand the social, economic, or political reasons why those experiences are different”²

We found 2 problems with the lit that focused on competencies:

1. There’s no consensus or agreement on what this set of competencies needs to be
2. Competencies by definition are too broad to enable taking action to foster DEIB

We think the focus should instead be on the skills that foster DEIB. As we mention in our article Skills for DEIB: Building The Muscles We Need, skills are applied and, thus, enable action-taking. However, the current lit lacks structured research around the specific skills (or a set of them) that can enable people to take action.

Skills for DEIB transcend individual roles & orgs

Some of the lit we reviewed discussed the difficulty in identifying key skills for DEIB, as compared with the way we identify skills for a specific role or job via a job analysis. Skills that foster DEIB transcend roles and orgs.

Everyone needs DEIB skills if they want to work successfully and effectively with diverse individuals or groups, whether it be within their current org or a future one. It should be noted, however, that some evidence exists in the lit about how certain skills are more crucial at different hierarchical levels.

Some DEIB skills are more crucial at different hierarchical levels.

For example, a staff-level employee might find more value in leveraging their collaboration and communication skills if most of their interactions are with diverse peers or supervisors. On the other hand, an executive trying to implement strategic decisions that might impact diverse groups differently should leverage their active listening and / or storytelling skills.

DEIB skills should be part of organizational learning

As we mention in the beginning of the article, there’s considerable literature on DEIB training, and the role of L&D in delivering, tracking, and measuring its effectiveness. We did come across a few insightful pieces that see the role of learning extend beyond delivering specific trainings. Because DEIB is foundational to everything that happens at work, it, therefore, needs to be an integral part of org-wide learning initiatives.

Because DEIB is foundational to everything that happens at work, it, therefore, needs to be an integral part of org-wide learning initiatives.

L&D has an important role in doing that, and going beyond delivering trainings and courses on DEIB. From ensuring consistent terminology and definitions to assessing and measuring progress in skills development, the learning function can bring their expertise to ensure a lasting and meaningful impact.

By working with the DEIB leaders, the L&D function can effectively identify skills that have a meaningful impact on driving org-wide inclusion efforts—and make development of those DEIB skills a part of an individual’s overall learning and development.

DEIB skills are in demand, but we don’t know how to teach them

Many articles highlight the rise in demand for “soft” skills. The pandemic, widespread protests for social justice, and climate-related disasters have resulted in people becoming aware of certain skills that can help them survive and thrive during times of rapid change.

Some refer to them as “durable skills”—because they’re not perishable like technical skills that can become obsolete if the tech itself is no longer popular or used widely. For example, collaboration and empathy are increasingly seen as critical skills to function effectively in a new environment. Not surprisingly, these soft / durable / humanizing skills (whatever we call them) are also crucial for building inclusive environments and a culture of belonging.

People are becoming aware of certain skills—soft, durable, or humanizing—that can help them survive and thrive during times of rapid change.

The problem, as some authors allude to, lies in the approach to developing these skills for 2 reasons.

The first reason: It’s difficult to teach these skills individually. As one author put it:

“Historically, if employees don’t arrive “naturally endowed” with these skills, they are often left to develop them on the job. How do you teach or develop skills like mental agility, for example?”³

A suggested approach to this problem is grouping interrelated skills into clusters and investing in a family of skills.

“Rather than targeting mental agility in isolation, you might target its cluster by also addressing skills like navigating ambiguity, working with incomplete information, and developing organizational and self-awareness.”⁴

The second reason: It’s difficult to ensure whether these skills are being implemented and practiced by people. Some ideas are suggested in the existing lit to address this, such as:

• Incorporating a microlearning approach and integrating it into the workflow
• Combining learning with coaching
• Using nudges and reminders to apply their new skills and practice them

What Caught Our Attention

Of all the literature we reviewed, a few pieces stood out to us. Each of these pieces contain information that we find useful and / or intriguing. We learned from their perspectives—and encourage you to do the same.

Skills for Diversity and Inclusion in Organizations: A Review and Preliminary Investigation

Rosemary Hays-Thomas, Alyinth Bowen, and Megan Boudreaux | The Psychologist-Manager Journal, 2012

This article offers an academic approach to identifying skills for diversity and how they vary, based on the different hierarchical levels within an org.

"Empathy or the ability to take the role of another may be critical to diversity effectiveness at all levels the organizations. Self-awareness and listening skills are likely to be important at all levels as well."

Highlights:

• Reviews the existing lit on identifying the skills needed for diversity
• Applies a critical incident methodology to develop a broad-based set of diversity attributes
• Lays out a model to help understand what values, knowledge, and skills are most important at different org levels (e.g., staff, middle managers, and executives) for effectiveness in diverse environments
• Highlights the importance of empathy at all levels of the org

Building the Link Between Learning and Inclusion

KeyAnna Schmiedl, interviewed by Deborah Milstein | MIT Sloan Management Review, March 2021

This article provides an example of how DEIB leaders and L&D functions can work together to create learning opportunities that foster a culture of belonging and inclusion among employees. This is an extremely timely article: It provides great examples of how Wayfair is leveraging such a partnership to update its training around inclusion in light of the social justice movements of 2020.

"We’ve … codeveloped ‘culture of inclusion’ trainings with L&D. They had the subject-matter expertise to pinpoint the highly engaging points in the instructor-led, in-person training and recreate those experiences in a different e-learning format."

Highlights:

• People are making the connection that diversity, equity, and inclusion are not a set of initiatives that operate in a silo
• DEI needs to be foundational to everything that happens at work, including learning
• By partnering, DEI leaders and L&D can bring better solutions to people within the org
• The connection between learning and DEIB should be seamless

Skills in Demand, Skills in Decline

Matthew J. Daniel, Susan Hackett | Chief Learning Officer Magazine, December 2020

This article offers insights into which skills are growing in demand and why, as orgs look to build those that’ll enable them to thrive in a new environment. It also provides suggestions on how orgs can approach developing these skills.

"The most notable trend, perhaps, is the volume of perishable skills in declining demand… platform- or organization-specific tools or languages that remain important for some but are increasingly volatile. Fluency in these programs takes a back seat to more durable and stable skills."

Highlights:

• Perishable skills—that focus on specific tools or software, and which are org-specific—are in decline
• Durable skills and stable skills—that are transferable, and which enable people to work in volatile environments—are on the rise
• Orgs can approach the development of such skills by grouping them into clusters
• Orgs need to think about broadening and diversifying the durable skills sets of their people

Risky Business: Why Diversity and Inclusion Matter

Celeste Young and Roger Jones | Victoria University and Bushfire and Natural Hazards CRC, 2019

This article provides a list of skills identified as critical to support D&I practice and the implementation of activities, based on a workshop conducted at Victoria University in December 2018. While the workshop was specifically designed for emergency management orgs (EMO), the applicability and relevance of these skills to all orgs is obvious and clear.

"Communication as a skill is already widely recognized as crucial for D&I practice, but the nomination of listening and reflective skills indicates the need for the development of specific social skills to enhance inclusion."

Highlights:

• D&I shocks can lead to risks serious enough to threaten the ability of EMOs to perform their functions
• Results from the workshop showed that listening and reflection were rated as the most important skills needed for D&I
• Other needed skills for D&I included being collaborative and analytic, and applied skills such as engagement, negotiation, and being able to manage unconscious bias

Storytelling in Organizations: The Power and Traps of Using Stories to Share Knowledge in Organizations

Deborah Sole, Daniel Gray Wilson | Harvard Graduate School of Education Journal, January 2002

This article explains how storytelling can be extremely effective in building or renewing trust and building a collective vision. While an explicit connection between storytelling as a skill and DEIB is not made in the article, we think it’s an important skill as it drives many components of DEIB, such as building trust, resolving conflicts, and generating emotional connections.

"Storytelling has been used in domains to communicate embedded knowledge, resolve conflict, and simulate problem solving."

Highlights:

• Well-designed, well-told stories can convey both information and emotion
• Storytelling can especially be effective in socializing new members and mending relationships
• Storytelling is a means to share norms and values, develop trust, and generate emotional connections

Additional Reading Recommendations

1. Creating a Competency Model for Diversity and Inclusion Practitioners, The Conference Board / Indira Lahiri, 2008.
2. “What Black Employee Resource Groups Need Right Now,” Harvard Business Review / Aiko Bethea,
3. “Inclusive Workplace Competencies,” Toronto Region Immigrant Employment Council, 2017.
4. “'Soft’ Skills Are in Demand. Can They Be Taught?” Fortune / Anne Fisher, May 2019.
5. Don’t Give Up on Unconscious Bias Training—Make It Better,” Harvard Business Review / Joelle Emerson, April 2017.

Q&A Call Video

TRANSCRIPT

Introduction

Stacia Garr:
Great. Well, we're going to go ahead and get started. So for those of you that I don't know, I am Stacia Garr and I am co-founder of RedThread Research where human capital research and advisory membership. And we're excited to talk to you today about purpose driven organizations. So this is a one of our Q&A calls. So this is pretty informal. And if you have questions, please go ahead and just jump off of mute and ask them as we go along. We do love it if you're able to do camera, just because it's a small group and it makes it a little bit more informal. If you don't feel comfortable with that today, obviously totally understand. You can also use the chat function if that's more your jam today as well.

Who is RedThread

Stacia Garr:
Just quick station identification as it were. As I said, we're RedThread Research. We focus on a range of different topics. We're focused on people, analytics, learning and skills, performance, and employee experience to DEIB and HR technology. This topic of purpose really kind of covers the much broader range of what, you know, it's really kind of a super topic if you will, because it has impacts across all these different areas. If anybody wants to know more about what we do go to redthreadresearch.com.

Our journey to understand purpose

Stacia Garr:
So as I mentioned, this is kind of a super topic for us, and we began this, this journey to purpose. It's actually kind of an interesting origin story in that our team every year comes together and says, you know, what are we going to focus on in the coming year? And a few years ago, I guess about 18 months ago, one of our team members came together, came to this meeting and said, I think we should really focus on organizational purpose. And Dani and I kind of went really like, are you sure?

Stacia Garr:
And you know, just cause we hadn't been here, we'd been hearing some about it, but we weren't, you know, we weren't convinced and this team member made an incredibly compelling case around why purpose was so important in how he was gaining traction and all this other stuff. And this was in September of 2019. So over the course of the next month or so this team member convinced us that this was a great idea. And we decided to start the research in January, 2020. Obviously we had no idea what was going to happen as we moved through 2020 at that point and how, in some ways, prescient this topic of purpose really was. But the reason I share that story is because before we got to the pandemic, there was already a lot of interest in this topic of purpose. There was an I'll talk about this in just a minute, but the focus on the business roundtable on making the purpose of a corporation being much more broad being about stakeholder capitalism, not just about shareholder capitalism and the like, but so we had that already happening, but then the pandemic really kind of accelerated what was happening.

Stacia Garr:
And so we completed a study last fall called the Purpose Driven Organization and it really covered the three bullets that are here on this slide, what is purpose, why it matters, how HR can bring purpose to life and the role of HR tech and enabling purpose. One of the things that happened though, because we were doing this research in the midst of the pandemic is a lot of people were obviously focused on a range of things related to enabling their employees. And we found that we had some really good stories, but not that many great stories of people telling them that story themselves. So we've listened to a lot of podcasts. We did some, we did some interviews, we did a lot of reading of articles, et cetera. And that's what we based a report on, but we wanted to bring it more to life.

Stacia Garr:
And so as a result of that, we did a whole podcast series that kicked off last October and ran until actually just about a month ago where we publish stories of what organizations were doing about organizational purpose. And that podcast is on our website, it's called, is purpose working. And so that was kind of that formed the Genesis of many of the stories that we found with this research. So that was a lot of intro into, into what we did and why we did it.

Stacia Garr:
Let me tell you a little bit more about the study and what we found. So when we talk about organizational purpose, this is our definition of it. So we say it's clear and concise statement that inspires people to deliver value to these multiple stakeholders. And so what I think is interesting here is in our list, as well as in most of the lists that you see, for instance from the business roundtable, shareholders are at the bottom of this list. So they are still an important part, but these other groups are a much more important part than they have been. Historically

Stacia Garr:
I think I saw someone maybe come off of mute. Did someone have a question or a comment on this?

Stacia Garr:
Okay, I'll keep going.

Purpose vs everything else

Stacia Garr:
The other thing that we get asked about is what is purpose compared to everything else? And so the way that we see it is this, that purpose is really about why I, or we do this. Why do we do this thing? This work that we do this focus for the organization, why do we do it? There are a lot of other important concepts, like as we show here, vision, mission, values, and principles but as we see purpose though purposes, the underlying kind of mega trend if you will. And these other factors are components of it. And ways that purpose is actualized, but Purpose is the fundamental key point.

Understanding purpose businesses

Stacia Garr:
Another thing that we learned through the research was about what purpose businesses are. And what I mean by that is there is an easy tendency to think that you know, there's deliberate impact that an organization is making and that's just their primary focus versus kind of market forces. So almost like a profit versus a purpose perspective. And so, but what we find though is, is that purpose actually extends much farther into kind of some of the organizations you might think of as do-good-er organizations then than you might expect. So a charity or pure NGO. Yes, that's, that's very purpose-driven and it is designed for a very deliberate impact, but with even social enterprises, often they can be for profit. And, you know, we've got all these businesses going to the right-hand side that are, that are for-profit.

Stacia Garr:
So one of the big findings that we learned through both the study, as well as through the podcast series was that profit and purpose are not necessarily at odds with each other. In fact, what we heard from, for instance, a venture capitalist, Debra Quazzo, who said, if a business doesn't have a clear purpose, and if its purpose is not big enough to be meaningful and inspiring, then you're probably not going to have a very good business, which I thought was a really powerful thought. So she would talk about how, when she is investing in businesses and startups, that if they didn't have a clear purpose, then, you know, she was probably not going to make the investment because the return just wasn't going to be good enough. And so I feel like that's kind of a different way of thinking about purpose certainly than what I was taught in business school. I was taught, you know, you need to get your return to shareholders and that's all that matters, et cetera, et cetera. And I think that the pendulum has swung back away from that perspective. I'll pause right there. Does anybody have any thoughts or comments on that?

Mission statement vs purpose

Priyanka Mehrotra:
I was just curious how businesses make the distinction between their mission statement and purpose. How has that distinction coming along and what, what did we see in our research on that?

Stacia Garr:
Well, I think practically speaking, I'm going to go back to that slide. Practically speaking, we see them tightly intermingled. So because organizations don't necessarily specifically articulate externally the difference between their purpose and mission, they tend in, people tend to understand what a mission is. I think we see the language being tightly mixed, but if you try to, if you kind of tease it out, you'll see that in many organizations, mission statement they'll have something that is much closer to a purpose statement. Like we do this and like, this is, this is the higher level of what we do. And then kind of the, the double-click down is the mission. Though they may call it all a mission statement. We were trying to pull it apart because the, what we do now in, in the future can change, right? We've seen that happen with lots and lots of organizations. But often the fundamental, underlying purpose of what we do is doesn't change. And so there's of the interesting interplay between the two concepts.

Stacia Garr:
Yeah. Great question.

Stacia Garr:
Any other questions or thoughts that folks have?

Understand purpose businesses

Stacia Garr:
All right. I'll keep, I'll keep going. And I'll, I'll say usually our Q&A calls. I don't put as much content in them. They're usually much more discussion-based but there weren't a ton of questions in advance of this. And I figured that given that folks may just want to know what we learned about this work. So that's why I put a bit more questions in here, or a bit more slides in here than we usually do. Okay. Stacia Garr:
So 73% of, of people believe companies can increase profits and improve communities. So this is kind of a fundamental belief that we're increasingly seeing, particularly in the United States.

Introduction Purpose has gone mainstream

Stacia Garr:
I've mentioned a few times this, this concept of the, what the Business Roundtable wrote in August of 2019. And the reason that this is important is that the business roundtable, you know, is an organization that a good portion of the fortune 500 are a part of it is part of the way that they kind of communicate where at least American businesses are going and for decades, they've said that the shareholder was primary.

Stacia Garr:
And this really ties back to the work that someone like the folks like Milton Friedman did in the 1970s that said, look, you know, the purpose of a business of a corporation is to return value to shareholders and that's it full stop. What's interesting is two things. One is, is that, you know, like I said, by 2019, the Business Roundtable updated this statement on the purpose of corporation focusing on these concepts of customers, employees, suppliers, communities, and then shareholders. But what's perhaps even more interesting is that this focus on shareholders was in some ways an anomaly in time. So if you look at some of the research and you look at what companies were writing about in the 1930s, forties, fifties, et cetera they were much more focused on the broader good if you will, of the good, the good of the community, et cetera.

Stacia Garr:
And it was only with the introduction of folks like Friedman in the seventies that we saw this very strong movement towards the shareholder. And in some ways that made sense, because it was a lot easier to measure. I'm going to talk about measurement in a few minutes, a lot easier to measure the value that the corporation was creating. If you only have a single stakeholder to whom you're trying to benefit in this case, the shareholder, and it is a lot more complex and messy if we have five different share stakeholders to whom we are trying to deliver value. But I think that it's interesting cause it feels like the pendulum is kind of coming back to what, where things were historically and versus, you know, the, you know, whatever 50 years that it's been very much so focused on on shareholders.

Employees expect businesses to act

Speaker 2:
Part of the reason this shift is that really employees and consumers expectations have shifted. This is some data from the Edelman Trust Barometer, where they were talking about the types of broader societal actions that they want businesses to take. And you can see here that, you know, 80% want brands to help solve society's problems is what this is. 64% want companies to help set an example as to what they should be doing when it comes to diversity. And 71% said that they trust employers to do what is right when it comes to social justice. But what is interesting on that last point was that was is especially true for small businesses.

Stacia Garr:
It was actually not true for large corporations. So they want companies to take action. They want them to do things that are in the better interest of society but they don't necessarily trust large corporations to do so. And this I think is, is part of what's driving so much of the CEO action that we're seeing. Like for instance, I don't know if you all saw today a significant number of CEOs signed onto a advertisement that was run in many major newspapers, talking about voting rights here in the United States, that they supported the broad extension of voting rights. And this is all kind of part of this reaction to employees and consumers expecting brands to take action that has really come about in the last five years, if you look at the data. So we're seeing this, my point is we're seeing this manifest in a lot of different ways. That's just one that happened to have happened today.

Introduction Purpose = good business

Stacia Garr:
The reason that we're seeing this is that purpose is generally seen as being pretty good for businesses. So we saw that for the last financial crisis. So the 2009 financial crisis, 64% of B Corp's were more likely to survive the last financial crisis than just pure for-profit companies. So if a company was a B Corp, it was more likely to survive. And, and I should say, if you don't know what a B Corp is, a B Corp basically has multiple, it has built into its legal structure, that it has an obligation to serve multiple stakeholders. And so it's, it's kind of the codification, if you will, in some ways of a triple bottom line concept, but it's actually built into the legal construct of the organization. For the next one data shows that 67% of consumers are more likely to forgive a mistake made by a purpose driven organizations.

Stacia Garr:
So if consumers think that a company is generally trying to do the thing, but they make a mistake, they're more likely to forgive them. 89% of leaders thinks purpose drives employee satisfaction and 84% of execs think purpose impacts an organization's ability to transform. So, you know, in addition to kind of all the good things that are a result of, of purpose, there's also a lot of data that shows that there's some benefits to doing it as well. I'll go ahead and pause again here. Any questions or comments on any of this?

Priyanka Mehrotra:
Okay. I had a comment about the previous slide. So we've seen that employees are of course pushing and expecting more from organizations, but I think we're starting to see that from shareholders two increasingly like for example, I remember reading just a couple of days ago, a story in the news about how big shareholders asked Google, oh sorry Alphabet to look into there program and protections for employees and there also increasingly hearing about shareholders pushing companies to do better on D&I, especially. So I think we're starting to see a lot of movement from that front as well.

Stacia Garr:
Yeah, I think that's true. And it's in the reason for it, I think is, is this right? Is that if, if you truly believe these numbers that, that, you know, these businesses do better, if they do these things you know, shareholders are what their businesses to succeed and return better investments, no matter what, what the, not, hopefully not, no matter what, but, you know, they, they would encourage them to take these actions as well. Not just some of the traditional ones. Yeah. And I think the, the other component of that is the SEC reporting guidelines. You know, we've talked about that quite a bit. So with those new reporting guidelines on human capital you know, a lot of companies are asking themselves one, what should we report? But two, it just indicates the higher level of interest in human capital data and what people are, what organizations are doing with their people. And so, and that's pushing them to say, you should be doing the right things.

Speaker 4:
Yeah.

Purpose as a self reinforcing system

Stacia Garr:
Okay. So if we go on one of the most interesting things we found from the research was this concept, that purpose is really a self-reinforcing decision. So the point being that you, it is harder to achieve impact if you just have one part of the business focused on purpose. So if, you know, if you just have a corporate social responsibility group over here on the side, focused on purpose but the rest of the business is not it's hard to kind of create the level of impact that you would want to that said organizations that saw and really put purpose front and center to what they did. They basically were able to constantly reinforce that purpose. And it created this nice flywheel effect. So a very practical example of that comes from one of the podcasts that we did, which was with Medtronic.

Stacia Garr:
And so Medtronic is a medical devices company, you know, is in the last year, is the need for ventilators was front and center they increased the ventilators that they produced by something like 200%. I mean, they're just a very purpose driven organization. And just in terms of where the industry is, that they're in. But what was interesting was when we interviewed Jeff Orlando at Medtronic, he talked about how they had a, basically a purpose statement or a purpose charter, if you will that their leader or one of their founders had had written in the 1940s and how that was one, it was like a sacred document that he talked about it like it was almost like a constitution. But second, he talked about how it wasn't a dead document. It was a document that they used to actively help them make decisions about directions that they should go investments they should make with their people, et cetera.

Stacia Garr:
He did make the point that like the constitution, there was a lot of interpretation. So some, there were some strict constitutionalist and some people who are a little bit more flexible, but he said that made the conversation richer and help them make better decisions. And so he said, you know, it was very much so in a situation where that decision, the intentional decisions were a result of the purpose, and then it just continued flowing around. So that's just one example.

What that means for HR

Stacia Garr:
What we did in the study was we looked at this from a perspective of what this means for HR and specifically looked at the different parts of the talent life cycle. So what does this mean from an attraction perspective, enablement, retention, and development.

In summary: Attract, Enable, Develop, Retain

Stacia Garr:
And what we found essentially here is this, first that with attraction attraction in many ways is the most important, because it's all about, do you get people into the organization who aligned with the purpose of the organization?

Stacia Garr:
And so making sure that the elements of purpose and with organization's purpose and how that translates to an individual is present in all aspects of the recruitment phase. The second component of enablement is really about creating the conditions that enabled that focus on purpose. So organizational culture, I just gave that example of what Medtronic does. It's in the culture that anyone can raise their hand and say, well, does this align to our, our purpose or there's no organizational hierarchy around that? There's certainly an element of wellbeing, which is so important right now with regard to, how does our purpose translate to the wellbeing of our employees and then the wellbeing of all those other stakeholders as well. This is specifically focused on employees here, but it's important to note that there's often this broader component and then volunteerism.

Stacia Garr:
So one of the podcast interviews that we did actually, I think it may not have up running, but one of the interviews we did was with Microsoft on their volunteerism program, this idea of enabling people to bring their own purpose to life through the company through volunteer activities. The third component here with development was really interesting in that we saw purpose being woven into the development opportunities that were being given. So, you know, making sure that people understood how they could connect their own purpose to the organization and doing that through, through learning opportunities. We had a great interview with folks from EY who talked about kind of the learning that they did to help people identify their individual purpose and make that connection. Similarly with leadership development, the folks that EY talked about, how they also teach their leaders how to bring out purpose in the, in the folks who work with them and how to kind of bring that element of purpose to their own leadership style.

Stacia Garr:
And then with career planning we saw that at Johnson and Johnson actually, organizations talk an organization that talked about how they set up a specific career planning effort to help people identify their purpose, and then to map it to career opportunities. And so when they were thinking about career opportunities and the language they use to describe them, the element of purpose and what J and J was trying to achieve was a critical component of that. And then finally retention. So we're seeing organizations looking to track the impact of their talent practices that aligned to purpose right now in all transparency, the primary space, we're seeing this as with diversity and inclusion or diversity, equity, inclusion, belonging that's where we're seeing the primary focus on tracking. Yes, we're seeing it within employee engagement, but in terms of the connection back to purpose DEIB is where we we're tending to see it. So, okay. This is the last of, kind of my prepared slides. So are there any questions on this or any comments or thoughts or anything anyone wants to contribute.

Connecting organizational purpose vs employee purpose

Speaker 1:
I will say something. So I work with organizations to improve human performance of the employees on the teams. So when I heard about this webinar from my friend, who is also here and thank you for letting me know I said, because I'm talking about how to find your purpose to and make the right behavior changes through behavior change, how you can improve your performance. And I'm just talking this with the organization. So this was interesting to see how the organizations purpose and the employee purpose. Those two dots are, how those two dots are connected to improve the employee performance. So when you said, yeah, it increases the employee satisfaction in one of the slides. Yeah. I can see that how it impacts the motivation of the employee and belonging to that organization feeling a part of that organization because they're aligning. So it makes it now wait clear in my head, the organizational purpose and the employee purpose, how they must be aligning and close attached to each other.

Stacia Garr:
Yeah.

Stacia Garr:
And this slide explains it very well, too. So.

Stacia Garr:
Yeah. Well, it's, it's a wonderful question. I did include it down here. Let me just skip down. Here we go. So it did make it in.

Speaker 1:
Yeah. Thank you for putting it up last night when I was registering, I said, I think this is the area I really want to talk a little bit more about.

Stacia Garr:
Yeah, definitely. Yeah. Well, so one of the things in, and I encourage you to to subscribe to the podcast.

Speaker 1:
Definitely. I will.

Stacia Garr:
And listen to that episode from EY because they have this concept of nested purpose, which I thought was really powerful. And the idea was that you have the organizational purpose here, then you have a team purpose and you have the individual purpose. And so in the important, and this is part of the reason that they put such an emphasis on enabling managers to understand purpose is that it's really that, that team purpose that connects people up to the organizational purpose. And so because that organizational purpose can be a little bit esoteric or feel a little bit disconnected, particularly, you know, if it's in their instance, a client service organization, but they don't have a a client service role, right.

Stacia Garr:
So it's like, okay, well, how do I connect? And so what they do is, as they talk about the role of managers in creating that nested purpose and helping individuals find their purpose and connecting it to the work they did. And in the podcast, there was a story that he told about, you know, somebody who is basically think 80% of her job, she didn't really want to do, but 20% she did and how they used the purpose framework to help them understand, okay, this is what I really want to do. And then it happened, there were some shifts that were being made in that person's in terms of what that team needed. And so they were able to help that person actually align and do, you know, pretty close to 80% of the things they want to do. They're still the 20% though, who is not glamorous, but so to, for all of us. And so they were able to make that connection, but via the purpose conversation by via this concept of connecting to the team.

Speaker 2:
I find that really interesting, the organizational, the team and the individual and where it happens is at that team level with those leader conversations or the leader. And because that's where we're actually focused is that to make it so my background is around inclusion and inclusion happens as we often talk about at that team level. And if we focus at that team level, we'll get more traction and it's very much aligned because we're also trying to figure out how do we bring it down to the individual level, but at the same time, it connect those two things, organizational individual level. One question I have is we've actually done a like we've gone into the academic literature around the connection between leadership, business, performance inclusion, et cetera, and figured out like the, the strength of relationships between concepts like belonging and also purpose what we found was it wasn't a lot in the academic literature. There's a lot of confusion around purpose. Yeah. Okay. So, cause we, we dug in and, you know, that was the one area that was more limited than any other areas in order to get to those connections between and then create something more evidence-based around inclusion. Right.

Stacia Garr:
Yeah. I completely agree. So when we did our work, there was, you know, there's, there's some, some academic work this kind of know high level or whatever, but once you start to try to actually dig in and understand you're right. And so then for us, we then turned to some of the popular, you know, we're business press, or there's also some organizations that are writing about or who are purpose focused, I would say. And so we have some, some things that they've written, but in terms of just really good hard studies, not, not so much. So we this, our study was a qualitative. So based on the research that we reviewed and based on the interviews that we did we would like at some point to do a quantitative study on this we just haven't, haven't gotten there, but but part of the reason is there's, there's a great big hole.

Tight parallels between purpose, IT and D&I

Stacia Garr:
But I think you, you bring out an interesting point and it's one that we've actually talked about a lot not in the research, but kind of in other conversations, which is the incredibly tight parallel between purpose and how organizations are approaching it and D&I. So like what you said like that, you know, D&I happens at the team level purpose happens at the team level level. You look at the broader view of stakeholders. They almost exactly match what we see with, with D&I, you know, thinking about diverse suppliers, thinking about our communities, thinking about our employees, you know, there's just an incredible it's almost like the two are living in these parallel universes and doing the same thing. And so I think that there and we do see some organizations who are, forward-thinking on purpose, also being forward-thinking on D&I, but not all D&I organizations are forward-thinking on D&I are also forward-thinking on purpose and I think that's an opportunity that they're missing. So yeah, so there's, we see those connections too. We haven't explicitly pulled it out in that research.

Stacia Garr:
Yeah, absolutely.

Stacia Garr:
Any other questions or thoughts? We've got some more questions in here. Okay.

Speaker 1:
Okay.

Why purpose now

Stacia Garr:
So one of them am an actually I did throw in some slides here to answer this question. So let me go back. Okay. So the question was, what do you see is driving the interest and organizational purpose? So I kind of gave some high, some preface around the data and the like, but as we kind of stepped back and looked at this and our research, we always ask the question why X now? So in this instance, why purpose now? And we had about, I think, five different reasons that we think that purpose is really a thing at the moment. The first one is the rise of new technology. So if you think about all the language around automation and AI, potentially taking people's jobs, et cetera, et cetera I think there's been an underlying discussion of what is it that makes us human, what makes us uniquely people?

Stacia Garr:
And part of that is purpose. You know, this idea that we are trying to achieve something greater than ourselves. And, and that's not something that technology does. So I think that that conversation is heightening or strengthening the discussion around purpose that's one. The second is the rise of the gig economy. So in particularly during the pandemic, there has been a significant focus on what is it that why should I join an organization? Like what, what is happening with my contributions of my work? Because I could just, you know, drive for Uber and get, make some money and call it good. Or I could just be an independent contractor on Upwork and, you know, get the money I need and that's it. But the thing, one of the unique things that an organization offers is the power to achieve something greater together.

Stacia Garr:
And that ties us very directly back to purpose. And one of the questions that are in here is about purpose post pandemic. I think purpose will be more important. Post a pandemic as people have now kind of are slowly bewilderingly coming out of their social isolation and saying, what do I want to do? And what impact do I want to make in this new world? And I think organizations that are clear on that purpose will do much better in terms of attracting the talent that they need. So it gig economy a second one. The third one here is this concept of work as a source of trusted information fulfillment. And so what this comes back to is that, you know, there's a lot of data that shows that unfortunately a lot of our social institutions have been declining. So whether that's our churches, which is why there's a church on here, or there that's our community organizations, whether it's Kowanas or, you know, whatever other organization you might be, a part of people are participating in those less.

Stacia Garr:
And along with that, they also are attending to trust. What have historically been seen as trusted information sources? So, you know, this whole thing about mainstream media versus other, you know, places that people get their news there's highest levels of distrust in the government that there has been in a very long time, but companies people's employers are where people are trusting information from they're trusting that's a high quality source of data and information. And so if you think about, you know, an organization's purpose and being able to say, you know, we do these things and people trust us that I think is part of the reason that connection between the need for a place to trust. And a clear purpose, I think is emphasizing the importance of purpose for a lot of folks. The last two are probably a little bit more obvious.

Stacia Garr:
So the pandemic, obviously, you know, there was a huge focus on doing there has been and continues to be, we are not out of it yet. A huge focus on being giving more, not just looking to, to prosper financially, but do you have any more to humanity and to other people and being more generous and being more human? So we think that ties in very nicely with purpose and then similarly the social justice movements of the last summer this idea that we are not just, you know, corporate entities existing to make money, but that we are there to to have a broader purpose. So those would all be reasons that I think that purpose is a thing right now, in addition to some of the other facts I mentioned.

Health orgs only?

Stacia Garr:
So this was kind of an interesting one. So was purpose something only healthcare and other orgs focus on? I think it's easier for organizations that clearly have kind of a purpose that relates to humankind and making people's lives better. But it is by far not the only type of industry that we see purpose driven organizations in. So in our study we have a long list of organizations. And so like EY right, when we started talking to EY about being on the podcast, I was kind of like really like a consulting firm. Okay. Like, let's see where you all are. And then they have this amazing effort around purpose. You know, we, one of the most well-known organizations, purpose driven organizations is is Patagonia. We didn't talk to them for this piece of research, but we've talked to them for other pieces of research and, you know, they are incredibly purpose-driven to the point where, you know, you can, because their purpose is about, you know, I think improving the home, our home planet as the way that they describe it.

Stacia Garr:
And so it's about, you know, not, not buying things that you don't need, making things that last for a long time giving back to local communities and advocating strongly for the for the environment, et cetera. So they're there, you know, an example of a clothing company that, that has a purpose and, and the list goes on and on there's food companies and Ben and Jerry's is kind of one of the biggest ones. Unilever, you know, consumer packaged goods company. So lots of different industries. I think it just is important to understand what that purpose is, and to clearly articulate in a way that's true to the organization.

Will purpose remain a thing after the pandemic

Stacia Garr:
So I touched on this one a moment ago, so will purpose remain a thing after the pandemic? And I think that it will, through the pandemic has added steam to the focus on purpose. And maybe I'm overly optimistic here, but I don't think we're going to forget the lessons of the last year quickly. And so as people come out of this, as I said, are looking for what's, what do I need next? I think that that topic of purpose, what I'm trying to achieve life is maybe a little bit more fragile than I thought it was. And I should be focused on my contributions. I think that's going to hold true. The other part of this is that I generally really, really try to avoid generational statements. You know, this generation does this, or this generation does that, but in general, when you look at the data, it appears that the younger generations are more purpose-driven than, than older generations. And as we have those more, that those younger generations come into the workforce, I think it will feed this continued interest in purpose. I say that very delicately, knowing that those types of assumptions are a hard thing for a researcher, but by and large, it's what we tend to see. Any, any thoughts or comments on that one from others?

Speaker 2:
I'm curious around the, the industries. Did you, what about financial industries, banks, and stuff? Did you see any of the banks with strong purpose statements and purpose in their organizations?

Stacia Garr:
Yeah, one of the strongest ones is Bank of America. Actually, and they talk a lot about a focus on the financial wellness of underrepresented communities and that aspect. So that's one, the other one is in this, in this, this, I think is actually a good example of how purpose is its specific purpose. Isn't broad goodness, let me say. And, and that is for JP Morgan. So JP Morgan is very focused on environmental issues and that's kind of part of their purpose statement. The reason I put a little bit of hesitation on that is that they were actually one of the few who did not sign the advertisements that went out today in the newspaper. And it was very, very prominently called out that they didn't sign it. So you know, so I just want to say purpose is not general. Like we support everything that seems kind of good. It's, it is very specific, but for them it's environmental. Like that's one of the things that they're very focused on.

Speaker 2:
Well, it's interesting. I actually just did a speaking engagement and talked about like pledges yesterday talks about pledges and the CEO's commitments around diversity and how we've been doing it for such a long time and what we say and what we do is, and so there may be some of that as well as like, you know, I don't really need to do this pledge because we're already doing the internal work, which is much more important than the other way around. I'm going to sign something, but I'm not really going to do the internal work around it. So there could be a lot of reasons for, for them not doing it. Unfortunately we go to judgment really quickly, too. Right.

Stacia Garr:
Yeah, yeah. We don't know. And that's the thing, is this like, particularly with some of these external reports, you know, you have to, are, they are marketing, unfortunately. I will say though, one of the people that I follow and get kind of the, his daily newsletter is Alan Murray, who is the CEO of fortune magazine and he is very, very strong on the purpose train. And so if you want to kind of stay up-to-date on what people are thinking about with regard to purpose he's a really good one to follow.

Speaker 2:
Awesome. Thank you.

How can I help my organization focus on purpose

Stacia Garr:
Okay. I see we only have two minutes left, so let me keep going here. What's my role as an HR leader in helping my org focus on purpose. So, you know, what I would advise folks is, is to kind of look at those four areas that we talked about with regard to purpose and to step back and say, you know, what, which of these things can I control and which of these things can I influence in the research?

Stacia Garr:
Actually, that's the way that we structured it in, in that long paper is for each of those talent areas. We identified the things that probably is within HR's control and which ones they influence, and then think about how can I infuse purpose in a meaningful way. You know, assuming that we have some understanding of what the organization's purpose is, how can I make sure that there's a connection to the team's purpose and that the leaders know how to think about that and how can, what kind of practices and approaches and daily behaviors, could we encourage that would enable a reflection on purpose? I think that's actually, is it so so before I get to that, are there any other questions in our last couple moments here about purpose that we didn't cover?

Stacia Garr:
Alrighty.

Conclusion

Speaker 2:
Well, cool. We'll then I'll just say that our next Q&A Call is in two weeks. We do these every two weeks, every Thursday at the same time, eight o'clock Pacific. And our next one is on a study that we published a few months ago on career mobility. We held off on this Q&A Call because my business partner, Dani Johnson was out on leave maternity leave for a while. So we were waiting for her to get back. And now she's back. So we're going to talk about a new study, where we identified five different models of career mobility and organizations and how organizations should think about using those different models. So that will be our conversation in a few weeks. And with that, I think I'll go ahead and say, thank you all for your, for your engagement and discussion and questions. And if you want to learn more about this, I strongly recommend going and looking at the podcast. That's on our website. You can get it in all the places that you like podcasts. And then we are hoping to do some more work on purpose here in the latter, half of the year, some more, at least another podcast season. So, all right, with that, thank you very much to everybody. Have a great rest of your day.

Speaker 1:
Thank you. Bye bye.

TRANSCRIPT

Introduction

Stacia Garr:
Hi, everyone. Thanks so much for joining. We're going to go ahead and get started. So for those of you whom I have not met, I am Stacia Garr and we are RedThread Research. I'm a, co-founder here with RedThread and I am just thrilled to be hosting this session today with Rajesh Anandan, who is the CEO of Ultranauts. And Ultranauts, you're going to learn all about them in the course of the session and how they have built these, as we described it here in the title of cognitively diverse and highly engaged and empowered teams. Now, before we get started, just want to share with you for those of you who don't know we are RedThread and we are human capital research and advisory membership. And we focus on a range of things, including people analytics, learning, and skills, performance employee experience, HR tech, and most relevant for today diversity, equity, inclusion, and belonging. So if you have a chance, check us out @redthreadresearch.com. Now just some quick housekeeping for our session today. The session will be recorded and shared with all registrants. And we want you to go ahead and ask questions through the Q&A function. I believe there's also a way to up vote your favorites. So if you see questions that others have mentioned, go ahead and up vote those. You're free to interact with one another in the chat, and you'll just need to make sure that you adjust the settings to include panelists and attendees. Otherwise you'll just be sending messages to the panelists, which is fine, but probably isn't the amount of interaction that you may be hoping for. So just go ahead and, and make that shift. If you have a moment we'd love for you to get started by putting in the chat, your name and your organization, and anything that you're in particular, hoping to learn from today's webinar.

Stacia Garr:
So with that, we'll go ahead and get started. So it is my pleasure to introduce Rajesh Anandan. We've practiced many times before the session, and I hope I hope I didn't mess up. But you know, this webinar really came about as a introduction on LinkedIn through a mutual friend who said you two absolutely must meet each other. Because you know, you have a wonderful story with Ultranauts in the work that you're trying to do, and we have an opportunity to, to help you share that. So with that, I guess would love to start with what is Ultranauts, who are you, what's this company that you've helped build?

Who is Ultranauts: Creating a universal workplace where everyone can thrive

Rajesh Anandan:
Well, Stacia, thanks for hosting the session and glad to share a bit more about what what we've been up to at Ultranauts. So Ultranauts is a onshore software and data quality engineering services firm. We, my co-founder and I started the company eight years ago with a mission to demonstrate that neuro-diversity including autism could be a competitive advantage for business. And our very simple theory of change was to build a world-class business that could create value for clients and be commercially viable and successful. And along the way, reimagine how in organization functions, how a company thinks about talent sources, talent manages teams, develops careers, so that a much wider group of humans could thrive and along, you know, and we're now eight years in and we've learned a lot. And part of our mission of course, is the share what we're learning to make it easier and more effective for other organizations to also embrace your diversity. So I'm always thrilled to have the chance to share some of what we've learned and some of the practices we've developed for our team at Ultranauts.

Stacia Garr:
Great. And why did you do this? So how did you arrive at this decision to build a neuro diverse team? And I'm really, why was it important to you?

Rajesh Anandan:
You know, I I'll spare the retroactively crafted founder story. Cause those things you just can't believe, startup origin stories, that sound like a neat straight line. My co-founder and, Art Shectman you know, we were at school together undergrads at MIT in the early nineties. And you know, when you're in an engineering school, you over-index on other humans who are different. And I think for a lot of us, for the first time we found a space and an environment and a community where it was all fine, we could be whoever we were. And there wasn't need a need to hide parts of who we were for fear of being bullied and things like that. And we didn't have these labels then I don't think I'd heard of autism until much later, but in retrospect, we of course have close friends who are neurodivergent and who we've seen, how they've struggled, trying to navigate a world that was not designed with them in mind and unfairly had to figure out how to function in a society and workplaces.

Rajesh Anandan:
And so fast forward a few decades, I'm dating myself here, but I'd done some research with another friend who runs a due diligence firm and research and consulting firm, Stax's. Looking at a thesis I had around communities of humans who were being overlooked or underestimated because of ableist views and looking for evidence of an over-indexing of attributes that could be strengths in the workplace. And so I was describing some of the findings from this research with Art, my co-founder, and he's been a serial entrepreneur and he was building a software development shop at the time. And he said, you know, some of the profiles sort of traits or attributes you are describing are exactly what I would look for in a quality engineer. And I could never find good quality engineers. And gosh, if you can find me a few folks who have these strengths I've got work that needs to be done.

Rajesh Anandan:
And so that's how we got started. As an experiment, we, you know, went to a couple non-profit advocacy groups for adults on the spectrum, and they were kind enough to humorous and help us craft a job description. We posted that job on grass. It's an advocacy network for autistic adults, and we had 150 applications within three days.

Stacia Garr:
Wow.

Rajesh Anandan:
A third of the applicants had graduate degrees, no one had any sort of work experience that related to the job we needed people to do. So we stumbled through the screening process and identified three of the applicants, trained them up pretty quickly and saw within a few months that they were able to do the job at a very high standard. And that was all the evidence we needed. And we launched Ultranauts then at the time called Ultra Testing as its own firm.

Stacia Garr:
Very interesting. So it sounds like you started with certainly with research, understanding, you know, kind of a little bit about this landscape and then with, as you said, an experiment at the beginning but now, you know, fast forward, how many years ago was that?

Rajesh Anandan:
Eight years ago. Okay.

Stacia Garr:
So now fast forward eight years ago, and I'm sure that, you know, over the course of this time, you've gotten a lot of questions about what it's like to lead a diverse team. We talked about this in our prep session, you know, and what misconceptions people people may have. So can you talk a little bit about, you know, from that start with those three quality engineers to today, what you've seen?

Rajesh Anandan:
So I would say, well, so many things and we'll touch on some of the sort of learnings we've had as a team. During the conversation I would say the most important thing is that if you take any group of humans you will not be able to describe that group accurately with any single statement. And so while our intentions were good and certainly there's evidence of an over-indexing of certain traits, like logical reasoning ability, or visual pattern recognition ability among autistic adults relative to the general population, these are generalizations, you know, it doesn't actually describe any specific individual. And so I think the biggest learning is that the sort of generalizations and these tropes, even if they're well-intentioned are not particularly helpful and keep you from getting to the ground truth that you need to understand in order to develop and design the kind of systems that actually work for everyone. And so you know, I'll, I'll simply say while ableist tropes are bad, clearly. So to our super power tropes or tropes about heightened abilities, and as one of my autistic colleagues shared, you know, in her words, she said, listen, all my life I've had to be exceptional just to be accepted. Like, can I just be accepted?

Stacia Garr:
Hmm. Yeah. Great point. Well, let's, I think that leads nicely into this question that I had for you, which is what is your team actually look like? So let's go to that slide.

The Ultranauts team

Rajesh Anandan:
So today Ultranauts is a team that spread out across 29 States. We've actually been a fully virtual organization from day one. So we've had the luxury of eight years of experimenting and trying different tools and practices to keep our team engaged and connected. And so when COVID started to unfold operationally, nothing changed. We were all already working from home and, you know, maybe my colleague who heads up growth and I traveled didn't travel anymore to events. I mean, that was pretty much the only thing, but we, we, our DNAs as a fully virtual organization so we're fully distributed and incredibly diverse. And so three quarters of our team across the company are autistic, and that's not just our analysts and engineers, it's our quality managers or colleagues and leadership team or head of outreach.

Rajesh Anandan:
And so that's been very intentional because we fundamentally believe that if you can bring together different brain types, different information, processing models, different problem solving styles, different thinking styles, different learning styles, and forge collaborative teams, you could do better. And there's a fair bit of evidence that backs up that assertion that cognitively diverse teams do perform better in terms of solving more complex problems, surfacing more unique insights and driving continuous improvement. And in our case all through the lens of improving software and data quality in highly complex and fast moving domains. And, you know, the one thing I would say is we have adopted this approach because of our fundamental belief that our differences as individuals do actually make us better together. And not because we are trying to create jobs for artistic talent, like that is not while that is a part of what happens because of the nature of what we're doing.

Rajesh Anandan:
The mission is to demonstrate that diversity neuro diversity and which leads to cognitive diversity is in fact an advantage. And so we go out and of course invest differentially in reaching pools of talent who've been left out and marginalized. And so sourcing looks very different for us. And we can talk a bit more about that later, but from the time you apply, everybody's treated the same. You get to work at Ultranauts because we believe you are the best brain for the right job. And not because of anything else. And because of that, you know, we've been able to create an environment where diversity really is embraced and it flourishes.

Diversity

Rajesh Anandan:
And if you could go to the next slide, not only are we cognitively diverse, but arguably we might be the most diverse engineering firm in the world across any dimension, you know, so if we look at gender 40% of our team are cisgender female. 5% are non binary, 5% are trans and other 12% have other gender identities. And so, you know, in a way cis-gender males are certainly not the majority or a plurality.

Stacia Garr:
And can you for, for our audience who may not know what cisgender means, can you explain that?

Rajesh Anandan:
Sure. that would be individuals who identify with the sex of their birth, born a male identify as male. And then in terms of race and ethnicity 28% of our team are people of color. Now, this is an area where we are not reflective of the population the American population. And so we've got work to do but we also think of diversity in terms of socioeconomic status. Three quarters of our team were unemployed or underemployed, nothing to do with their fierce capabilities as professionals and humans and everything to do with the construct of how you know, people get hired and the sort of highly subjective and ineffective tools that are commonly used, which leave out incredibly capable humans from having a fair shot at contributing. And so we've been on this journey to try to change that.

Rajesh Anandan:
And over 40% of our team used to live in poverty. And so we think about diversity across many dimensions. We don't think that point solutions to improve or increase diversity on any one dimension can work. There's certainly no shortage of failed attempts to say, Oh, let's set up a program focused on X group. Because the reason you might need a program for X group is because there are underlying sort of inequities in how the organization functions. Maybe it's in how you recruit, how you develop talent or how you manage, you know, how you build relationships how information is shared all of this stuff. And if you don't get to the root of what's creating unfairness and an uneven playing field, then all these point solutions just don't work. And on the other hand, if you can really take an honest look at what is, what are those underlying causes that are resulting in a workforce that is not diverse on whatever dimension it is and you start to tackle, attack those surgically. Then what you end up with is a diverse work force. As we have, like, we didn't set out to be gender diverse or racially diverse or socioeconomically diverse. We, this is an outcome of the process we've gone through.

Stacia Garr:
And I think one thing to, to call out for folks is that, you know, just to to pick on one of these you've mentioned here that 10% black, the technology industry is historically really it's incredibly difficult or to get that number very high. It seems for I think, many of the reasons that you've mentioned, but just for folks, for point of comparison, I was recently actually looking at at Facebook's numbers here and, you know, they, they at least have been saying, they've been putting a big focus on this. And, and even with that big focus, I think their numbers are like 3%. So even though this is not necessarily where we would want it, it's still, I think, remarkably better than what we tend to see in the tech industry.

Rajesh Anandan:
Yeah. And so part of the challenge is to continuously challenge ourselves. Like good compared to what you know. So when we look at the broader sort of technology industry or kind of engineering fields and we're all quality engineers, it's a low bar and it's meaningless, you know, so it's I think, you know, the only sort of valid comparison is what is it in the general population? Cause everything else, it starts to sound like an excuse, right? Oh, there isn't a pipeline of talent or, well, you know, maybe this particular discipline is doesn't have as many graduates or what have you, by the way, we also looked at our team in terms of academic background. And actually I think almost 30% quarter to 30% of our team. If we look at team members who are performing extremely well don't have a college degree. So, you know, we're seeing bigger efforts around this like Google certificates where we're trying to disrupt that barrier of, if you're not part of the third of the population that have a college degree, then suddenly you're left out of a whole wide range of fields, which makes no sense.

Stacia Garr:
Yeah, no completely agree. We actually, we just published a podcast. We did with a gentleman called Matthew Daniel who's with Guild education. And we spent quite a bit of time talking about that exact topic about how this, this issue of college degrees leaves out so much of the workforce. So just kind of moving us on, you know, these numbers are great, but I think a lot of people would want to know, okay, well, what results have you seen so far with your business? So can you talk a little bit about that?

Rajesh Anandan:
Yeah. we've grown at over 50% a year in terms of, you know, growing the business while maintaining a hundred NPS among clients and our clients include a range of leaders in the industries that we work in from, you know AIG, Berkshire, Hathaway, Bloomberg Bank of New York, Mellon, Cigna, Comcast Warner media. We also work with startups. We work with pure technology companies and SAS companies. Slack's been a long time client. And then so commercially, we're professional services firm. So we're growing at a really healthy clip. And we saw the sort of impact of that as COVID started to unfold and companies started to shut down entire business units and shut off contractors and vendors and all this stuff. And we took a hit as well. Looking back a year, Q2 last year, I think for us, as for many organizations was not fun at all.

Performance

Rajesh Anandan:
And we lost a couple bigger accounts, took a real hit to our top line, but we recovered in a quarter and because the services we provide in terms of data quality engineering and software called engineering, are that much better than what's out there. We ended the year having grown our top line by 70%. In the middle of what was arguably incredibly challenging year. And, and we do that because we do this work better. If you could go to the next slide, you know, the nature of what we do is preventative. If we're doing our job, bad stuff, shouldn't happen. You know, your software should launch and release without any critical failures, your machine learning models and predictions, your analytics engine should be accurate and trusted, so bad things don't happen. But there've been a couple of examples where we've been brought in to replace a larger consulting firm, and we had to redo an entire piece of work, or there was a really well defined, measured baseline we were starting from.

Stacia Garr:
So it was possible to compare what we did. And the results we were able to deliver. In one case, a Prudential business unit brought us in to replace an IBM team, doing some fairly technical kind of compliance testing on their software. And we were able to not only use the same sort of automation tools, but actually do the same work so much more effectively that we increased the sort of rate of detection of defects by 56%. I mean, you have to ask, like, what were they doing before? Not only that we were able to actually do it in sprint versus delaying delivery of that platform. And no surprise, we replaced IBM at that business unit and, you know, completed 14, 15 projects. I think in another case we were brought in to replace or in place of CapGemini by an AIG business unit.

Rajesh Anandan:
And CapGemini is a great firm. They were sort of working across that company and this particular CTO didn't want a sort of cookie cutter industry solution. They were building a highly complex underwriting insurance underwriting platform and needed a partner that could have just capable, quality engineers, who not only had the technical skills to build sort of a scalable test automation framework, which sounds like a bunch of garbage, but actually be able to understand the business and what that meant was our quality engineers read through the 500 pages of underwriting logic, and actually understood it and cared enough to also understand the pricing regulations at the state and federal state level that varied by product and synthesize all of that into what to test to answer. The simple question of is this policy quote being delivered, correct, because the stakes are high. And so we've been able to show over and over again that yes, actually we do this better.

Rajesh Anandan:
And because of that, we've been growing as a business. And that's because of not in spite of the diversity of our team.

Inclusion

Rajesh Anandan:
The one other thing I would say, if you go to the next slide is that we think of success, not just in terms of the value we provide to our clients. Obviously we're a business. That's what success is. We would create value in a differentiated way that that helps our clients extract, you know, grow the business, mitigate risk and so on. But we also do think about success in terms of our ability to create an environment where everyone has a fair shot at success and can thrive. And does that in a, in the context of a team where they feel connected and engaged and they feel like they belong. And so we measure loneliness. We created a simple metric that we call our net loneliness score.

Rajesh Anandan:
Think of it like NPS for customer health as a forward-looking indicator of the health of your business. The loneliness score is similar in that it's a forward looking indicator of the health of our team, therefore the health of our business. We have a bot that pulls our team at 5:00 PM local time every day. Every day is a single poll. We cycled through about a dozen of them as a team we've kind of arrived at what those calls are. And each one ties back to a dimension of inclusion or wellbeing that we as a group have decided that it's important for us. And so loneliness is one of them. And we now have data for several years that we are consistently not a lonely group, a whole lot less lonely than the American workforce. You know, I think a few years ago, the surgeon general at the time was sounding the alarm about loneliness being an epidemic in America. And it's only gotten worse and 40% of American workers reported feeling lonely at work before COVID and we are now even more isolated. And before COVID I think 15% of Ultranauts reported feeling lonely at work and during COVID in spite of being surrounded by fear in panic we had the systems in place that actually brought our team even closer. And so, you know, the last quarters loneliness polls were averaging closer to 10% and that's, you know, people responding to that poll saying, I feel lonely at work.

Stacia Garr:
Right. And I think that's remarkable, you know, particularly as you mentioned, you're a remote team from the start. And so you know, that you know, that ability to even improve upon what you, what was happening during the, during COVID I think is really remarkable. One thing I don't think you mentioned at the beginning is how many folks are on your team? How many people work for Ultranaut?

Rajesh Anandan:
So we're still a small firm, you know, we're just south of a hundred people.

Universal workplace

Stacia Garr:
Okay. Okay. Yeah. Just to get folks on the line have a of the scale. Okay. So we've talked about, you've got really strong diversity, you've got really strong business results and other results such as this, so help us understand how do you do this? What does this, what does this look like? What's the workplace design look like?

Universal workplace: Flexible workplace norms

Rajesh Anandan:
So we think of what we're doing or trying to do as creating a universal workplace, which simply is shorthand for applying universal design principles to reimagine and redesign the system that is work top to bottom. And so for us this universal workplace has sort of four dimensions to it. One is building flexibility in as the norm, not as a thing you need to ask for an exception. Certainly having the flexibility to work from an, in an environment that you've been able to design based on your own needs, hugely important for our team. Maybe, you know, it's not for everyone. And you're seeing some of the research come out where it's working from home is super productive for some, but not all for our team in general. You know, many of our teammates may not have even applied if this was not an option, but we think of flexibility across a lot of other dimensions as well.

Rajesh Anandan:
We've moved away from the notion of a FTE, a full-time equivalent as sort of the way to think about units of work and a work week, because it turns out there's really no evidence that suggests that a 40 hour, 50 hour work week is optimally productive for all humans or even most humans or even many humans. And yet this is the construct we're stuck in. And in our case we have incredibly capable team members who would be hyper-productive for some fraction of that time. But if they were forced to work this quote full time week, simply to have a salary or simply to be able to progress in their career, you know, it, it would be unproductive. It might be overwhelming. It would be bad for their health and, and just bad for the team. And so we have created what we call a DTE, a desired time equivalent.

Rajesh Anandan:
So in almost all of our salaried roles you have, and I would say over 85% of our team are in salaried roles. So that's important to you. You can't have any of this stuff without income stability. And that's been a journey for us as a small business, right? And a lead startup we've we've had to work our way to this point where now we feel like we've dealt with some of those core issues around income stability. I would say, you know if you can't, if you don't have that, and you don't have psychological safety as just building blocks, you have nothing. And so, you know, you've got to address those things first because otherwise you don't have a conditions for people to be able to use their bandwidth and their brain cycles to focus on value and work, and instead have all these other fears that, that are playing in the background.

Universal workplace: Transparent decision making

Rajesh Anandan:
So flexibility's important. A second dimension is just transparency. You know, when you bring together people who are this different, who have very different views and experience, and maybe in some cases bad experiences at other workplaces, unfair experiences, it's really important to have as much transparency as you can, in terms of, particularly in terms of decision making, like, you know, one of the polls that we cycle through with this bot is I forget the exact phrasing, but it's like, I understand how decisions are made at this company, particularly those that affect my job. And so you respond on a Likert scale, you know, and that's sort of our proxy for do people feel like they know what's going on and why things happen. And so we've done a lot to create that transparency so that people do feel like they understand why decisions are made and what's being made.

Rajesh Anandan:
We publish our sort of performance dashboard that the leadership team works with and works off of to run the business. There's 40 odd KPIs and it's published. So the whole company sees the same metrics that the leadership team is responding to. Whenever that the leadership team meets, we meet once a week as a group, we publish notes on actions, decisions. So there's transparency. Obviously we don't publish everything. Like if there's some HR stuff happening, but for the most part, it turns out, you know, there's nothing special about what does the leadership team talk about? Cause every organization I've been in, you know this is kind of a pet topic of what, what do they talk about? And at Ultranauts you don't have to worry, or you don't have to wonder about this. It's a waste of brain cycles to wonder, because here it is.

Stacia Garr:
Can I, can I jump in on that? One thing I really like about that is we did some research actually over the course of the pandemic and are continuing to do it, that we called the responsive organization. And two of the components of a responsive organization was distributed authority. And then also growth and transparency. And what I like here is, is that pulling of those really with the obviously the transparency of these metrics and kind of how the business is doing, but then also the, the logic behind these are the decisions we made and sharing that because kind of understanding how decisions are made, helps others make their own decisions and make better decisions aligned with the same principles that the senior leadership team does. So there's something I really like about that.

Rajesh Anandan:
Yeah. And I don't want to, you know overstate the notes. You're absolutely right. Like having providing context for why decisions are made. It's just so important because that's the only way you can have individual actors in a system making good decisions. Otherwise, you know, you need a very hierarchical bureaucracy which is ineffective. And we can certainly do better on that front. You know I would say trying to build those organizational habits where providing the context is just part of what we do, you know, even on the leadership team, like we have a diverse leadership team and we've tried to adopt a habit where the night before the weekly meeting, if you have an agenda, item or topic, you've got to submit it. You know, we use Trello and we're engineers, so this stuff is all this, send it here and it'll populate somewhere and isn't it great.

Universal workplace: Focus on team wellbeing

Rajesh Anandan:
But the format we try to use is first give people a heads up, right? So put the thing on the agenda before the meeting and then provide the context, you know, do you want a discussion? Do you want a decision? Like, what is the purpose of this? And then what is the context, you know, that I need to know in order to have an informed conversation about the decision or about to meet and then you know, wellbeing obviously it's important particularly because we're distributed. It's impossible to know when someone is not doing well. You can't see that someone's not doing well. You might not run into them in the hallway. You won't see them stressed out at their desks. And so it's really important to not only sort of measure wellbeing. Like we have our bot that's getting a pulse check of the team every day.

Rajesh Anandan:
But also de-stigmatize mental health as much as possible, make it okay to take time off. You know, everybody in the company has to go through a part of onboarding is just going through a workshop around managing stress and anxiety. We have access to as a standard for, you know, kind of part of the resources everyone has access to. We have access to a mental health services provider where you can have therapy sessions or counseling sessions. We have a team forum every couple of weeks. That's hosted by a life coach that that we work with. And that's a safe forum for people to just share concerns that they have with a group of peers in a moderated way. A life coach has office hours that you can sign up for one-on-one and all of this stuff around wellbeing, we try to make it provide lots of possible ways you can get help and we try to make it really easy to ask for help, and we try to make it okay that you need help.

Rajesh Anandan:
And kind of diffuse a lot of the stigma around mental health by talking openly about it at a all-staff meeting a couple of months ago, we had a member of the leadership team, very openly share about some of the mental health challenges that they're struggling with to just create the sense among the team that this is, you know, this is okay, and it's okay to share. It's okay to ask for help, but that takes time and creating that sort of the safety, you know, the psychological safety only happens through actions and what the team sees as sort of observes around them and and sees their peers doing, the managers, and leadership team. And that creates the safety and the feeling of safety that allows people to then actually feel safe, to ask for help or call out a mistake.

Universal workplace: Inclusion business practices

Rajesh Anandan:
And then the fourth dimension, I think the most important one here is that for us inclusion is not just a feeling. We've tried to define it for ourselves and then design inclusion into our core business practices. And this is a very different approach from most organizations where there is a defaulting to creating quote workplace accommodations for kind of team members have different needs. And to us that that's a that's not a solution. You know, that's a symptom of the problem and only a bandaid and is not a bad place to start to figure out how you need to change your practices so that that person doesn't need a special accommodation. And so we'll talk a bit more about that, but everything from how we do recruiting, not just for, you know, one group of job applicants just for everyone, or how we provide and think about learning and development, not just for one group, but for everyone and how we run our projects and our teams which we just published a paper on what we call inclusive, agile, which is just a better way to implement agile and scrum better for everyone, not just one group,

Stacia Garr:
Right? Yeah. Well, let's go there because I love the folks I'm sure want to know, you know, how do you approach let's, let's start with recruiting. So what does the talent acquisition and hiring process look like?

Objective recruiting

Rajesh Anandan:
Sure. So if you could go to the next slide there's been a fair bit of research looking at the efficacy of different recruiting techniques in predicting on the job performance. And it turns out doesn't matter, which study, you look at the most common tools that are used, like a resume review, which essentially is looking at previous work experience or a subjective kind of unstructured interview, which is right with bias are just really ineffective. You know, it turns out pattern matching the past is really hard to do, and it doesn't predict the future. And also it then actually calcifies the status quo when you leave people, you know, if someone hadn't had a shot before, they're never going to get a shot. But also we, you know, dramatically overestimate our ability as humans to spot talent. And so the reality is that whether you look at years of work experience or other things that are looking at the past, like reference checks, these have no correlation with, on the job performance.

Rajesh Anandan:
Unstructured interviews are almost useless not as useless as years of work experience. And then when you start getting to structured interviews, you know, asking the same set of questions of every candidate, and then before you start interviews, you have a scoring rubric that defines what a good answer is. So that you're just trying to constrain the natural human bias that will kick in, it's everyone, and there's no way around it. You can't train it out of people but you could try to put some guard rails to minimize it. So structured interviews can be helpful, but most helpful are observing and actually evaluating someone's work and someone's abilities. And so you could call that a job test. And so at Ultranauts, we use job tests for all applicants for all roles, because it's just a better way to more objectively understand if someone's going to be able to do the job. We of course do use interviews, but they're all structured.

Rajesh Anandan:
And they come in toward the middle of the process, not at the beginning where you have no data. And they're focused on really trying to dive deeper into someone's interests and motivations to understand whether that aligns with the core work to be done and the nature of that work. Because we want people who are going to be excited and driven and motivated to do the job they're being hired for. And again, this is not just for, you know, autistic applicants that have to do job tests. You'd never do that with like set of a program where all your female applicants have to do this very different process, right? You just wouldn't do that. You shouldn't do that for any group because if the process can be better, it would be better for everyone. And so the one thing I would say on this is when it comes to job tests it's not only for technical roles.

Rajesh Anandan:
Of course, most people we hire we're hiring for a quality analyst or quality engineer role, but we use job tests for everyone. So we may be the only company in the world that hired a head of growth and sales, where the, you know, applicants had to take job test, because let me tell you if you're, you know, decent in any kind of sales role, surely you can have a convincing conversation, but that says nothing about your ability to, you know, strategically dissect a market opportunity or creatively and quickly get to a senior decision maker. But these are the things you could test. It's easy enough to construct, you know, a test or a simulation that allows you to observe and see how someone's able to do that, which is going to be a whole lot more accurate than asking them questions and getting really convincing answers.

Stacia Garr:
So we had a question come in through chat about potential recruiters reservations around structured interviews. So a sense that they don't have the choice to ask the questions they want to. So is that something you all have encountered? And if so, how have you addressed it?

Rajesh Anandan:
So part of this is you do need to be able to kind of go deep into someone's strengths and interests because really, you know, the whole process is less about finding reasons not to hire someone it's just really to understand what they bring to the table. What are they going to add? What are the strengths that they haven't and do those lineup with the job to be done? I would say, you know, first, even just starting with the job description, like we try to unpack the role into the actual requirements of the job and, you know, work backwards from there. Like what, what are the skills you need or the competencies you need. And then to the extent that has very specific requirements around experience, we fleshed that out. But when you do that, you're able to and then for each of those requirements, how will we validate that requirement?

Rajesh Anandan:
So some of those map back to things where we're trying to validate in an interview, some of those map two things, we're going to validate through a work simulation or a job test. And so the focus of the interview then is to try to drill down on those attributes. We're trying to validate in that interview. And so, yeah, we start with sets of questions, and then the recruiters do have the flexibility to go add questions, but, but they've got to cover a minimum set of common questions because otherwise there isn't, you know, it's much harder to compare across interviewers certainly, or, or even with the same interviewer across across applicants.

Stacia Garr:
Right. Okay. Makes sense. I'm just conscious of time. So I want to make sure we move on because you mentioned learning and career development in, in your approach to that as well. So can we talk a bit about how do you think about that a bit differently than maybe a traditional organization does?

Rajesh Anandan:
Sure. you know, as a professional services firm creating an environment that allows for and supports continuous learning and creates the conditions for accelerated learning are mission critical. Doesn't matter, you know, what skills you come in with 18 months later, those are out of date. So having a kind of engine that's continuously building our capabilities on our team is absolutely missing critical. So everybody who comes into the firm in, you know, in our core delivery team, which is 90% of our employees. So we haven't done this for everyone, but it's covers our core services delivery team all the analysts, all the engineers, all the managers has what we call a learning path that they are currently on and they know what learning path they're going to be doing next and a learning path to simply sort of a micro kind of module that tightly coupled theory and practice and is designed for neuro diversity.

Design for neurodiversity

Rajesh Anandan:
And if you go to the next slide we've sort of been on this journey to redefine how corporate training happens because most corporate training doesn't work. We know that doesn't actually impart skills and then it's particularly unhelpful for learners who are neuro diverse. And thanks to my colleague, Nicole Radziwill, who in addition to running large scale engineering teams and being a data scientist is professor data sciences is near divergent and she's been sort of authoring an architecting, our approach to learning. We call it designed for neuro diversity. It has a few very specific principles, and we apply that to how we create curriculum and learning experiences. And so that's table stakes, but most organizations just put up, you know, a one hour video when you're supposed to learn something. You know, you've got to create learning experiences that are self-paced that are actually designed for engagement.

Rajesh Anandan:
You've got to have hands-on practical exercises coupled with the content in micro modules versus like study this thing for, hours and hours and hours, and then you have one exercise at the end. Like that's not how learning happens. And those activities need to actually tie back to your day job. So it's relevant. So you can actually ingest internalize it. And then some very specific things around how we design for accessibility and kind of different learners. But everybody, you know, on our delivery teams has a learning path that they're on. They know what they're going to do next. And this is framed around what we call a launch pad. It's acute, you know, we're Ultranaut, so everybody's a launchpad, but it's your personalized learning path. And we're at startup, right? We don't have a lot of resources and yet we've made this important enough because it's mission critical that we create this environment around continuous learning. And so everybody who comes in you know, as part of their onboarding has a launch pad that ties to like, where do you want to go? Like, what is the aspiration? What is the role you're trying to work towards and then work backwards from there to where you today, what is the learning path you need to take now? And what's the one you need to take next?

Stacia Garr:
Yeah, that's great. Question that came in was round just, you know, there's obviously a lot of technical skills that people need to develop and use. But what about the non-technical skills? So are you, is there kind of a specific thought and effort that you put around your learning and development efforts to enable people to focus on you know, potentially things like active listening or communicating more effectively or something like that that you think is, you know, important so that all of the audiences, all of the diversity in your team can be affect, you know, feel included.

Rajesh Anandan:
So to us, that's not a question of training, it's more a question of systems because, you know, it's like you can have all the workshops you want people go back to their desk and behave exactly the same that they did before. And so, as we think about aligning on the way in which we work and communicate and treat each other we think in systems and tools, right? So very organically from one of our projects emerged a different way of implementing agile and scrum because it turns out while agile was designed to be inclusive. In fact, it is not. And so because on our teams, right, we're running agile scrum teams where we'll be brought in by fortune 500 firms to build test automation, frameworks, or do data quality audits across the enterprise. It's complex technical work, it's moving fast, we've got a wide range of communication preferences.

Rajesh Anandan:
You know, we've got a significant portion of the team with selective mutism and don't speak. We have a significant portion of the team who have auditory processing challenges. We have a significant portion of the team who have severe anxiety or workplace PTSD. And so we're running teams that have all of that stuff going on. And so it's important that the way in which we run and manage teams and manage work and communicate allows everyone to be able to contribute and participate. So very basic things like, you know whenever we have a interaction like a standup meeting or a town hall meeting you can always participate in chat. You can send in your questions or suggestions beforehand. So you don't have to think on the spot, things are transcribed. So if you're having trouble hearing and following along, you don't have to text your brain for that. You can just consume the information in a way that works for you. That's the simple stuff, and it's surprising that this isn't universal, right?

Feedback- My Biodex

Rajesh Anandan:
The more interesting stuff is around things like feedback, you know? So it turns out that the way, most managers are taught actually doesn't really work for most people. So like, you're always taught when you're giving critical feedback, give it in the moment in a live conversation, sandwiched by positive affirming comments. Well, it turns out for our team and I would guess for most people, most teams that's not optimal, you know, it really depends. But then how do you have an effective way to give feedback? If it depends? It depends. It's not an announcement. So we've built in the ability to very quickly look up someone's feedback preferences. So that it's a one single command in Slack to pull up someone's feedback references. If you're about to have a conversation where you're going to share some feedback as a peer or a manager and we've made, you know, we productize that into what we call the Biodex, which came out of a simple kind of thought from a team member a few years ago, who said something like, you know, like it never really figured out how to work with some of the members of my team. I wish humans came with a user manual. And so we said, yes, wouldn't that be nice? And so that's evolved into what we now call the Biodex. It's got 20 odd fields, and these are all things you should know about me about how to work productively together, including my preferences around receiving critical feedback.

Stacia Garr:
I think we have a screenshot of that. Don't we in the deck?

Rajesh Anandan:
Yes. I think if you click maybe to the next.

Rajesh Anandan:
The slide after that.

Stacia Garr:
Yeah.

Rajesh Anandan:
Yeah. So you know, that's the simple bot screen that you can look up if you want to look up someone's feedback preferences. And I would say, you know because of the way in which we work and having these systems and tools and process it also allows us to really surface the strengths people bring. It doesn't constrain us, you know, all of the systems and process and tools simply take away a lot of the stuff that might otherwise be really taxing or alienating, which then frees up a lot more brain cycles in bandwidth for the real work to add value to clients and to innovate in our own practice. And so there's an example of that, certainly the Biodex which is now a bot, and we released it to a group of alpha users because anytime we described this, every team says, Oh my gosh, I want the Biodex.

Rajesh Anandan:
I'm like, yes, yes, we'll get around to it. You know, we're not a software developer, we're not a product firm, but we can cobble together a product. And, another kind of example of just taking what we're doing for ourselves and you know, making that useful to others. And in this case, as an actual service, is a service we launched last year that we call talent bias detection, which essentially is taking all of our capabilities and techniques around auditing data and understanding data called, usually a chief data officer or chief digital officer might bring us in to do an enterprise data quality audit or to build kind of automated quality checks into their information supply chain so you can trust what you're getting on the other side and all of this, the same sort of skills and techniques applied to interrogating the data exhaust being generated throughout the employee life cycle turns out can be incredibly helpful to surface patterns of bias and actually bring a data driven point of view to the conversation around, great you want to improve equity in the workplace? Where do you start? Where do you actually make those investments?

Stacia Garr:
Yeah. Yeah. And we've talked a lot about that type of work in the DEIB tech research that we've done in and how you that can both help us understand what's happened in the past, but potentially be able to flag when that bias is happening in the moment for folks.

Rajesh Anandan:
Absolutely. And so, you know, simple use case of that is performance reviews. So we're, you know, a couple of engagements we're doing are around essentially building bias detection and running just you know, normally you might run some simple word association and well, we've got 20 different sort of techniques to do that, to really go deep in a much more precise way. And once we do that audit because we're engineers, we're building those quality checks so that they can run automatically every time there's a review cycle and go from sort of surfacing patterns of bias into being able to raise a red flag or an individual performance review that has sort of a high likelihood of bias. So it's much more actionable and kind of real time.

Stacia Garr:
Yeah. Great. Well, I know we are just about at time, so I'm going to move as just here to the end and want to encourage folks to get in touch either with, with me or with Rajesh. I guess just a final thing you mentioned with this bias, bias identification that you're now doing some work helping other companies, do you want to spend just a moment kind of wrapping us up and telling us about what you're doing there before we let folks go?

Rajesh Anandan:
Sure. You know as you might imagine, it's very sensitive work. And so there's not a lot I can share other than to say, the core problem that we're helping companies with is that, you know, most companies have made very serious commitments to tackling inequity in the workplace across different dimensions, including race. There are a lot of sort of hypotheses around how to do that. And no shortage of advice you can get. But very little evidence in terms of, you know, what actions can have the greatest impact. And so we've narrowed in on a few different aspects of the employee life cycle, like performance reviews, or kind of these employee practices, talent practices, performance review is being one kind of leadership, potential identification being another succession. So, and we're able to go in understand sort of the processes that contribute to that outcome of like a performance review or promotion decision, and then apply a whole range of different techniques, including analyze the actual text looking for over a dozen different types of bias in helping companies build essentially a lexicon of biased words.

Rajesh Anandan:
And, and the reason this is hard to do with sort of an automatic ML tool is it's so company specific, right? And so there's a bit of work to be done in the context of the company taking the time to actually understand the specific processes and nuances in order to start kind of building that talent bias audit of a performance review process. And then from there, honestly, it's fairly straightforward to automate that audit or those bias checks, so that every time you have a review process or every time you've got a, you know, leadership potential discussion, that's got an output of documentation that you can run the same sort of analysis and just spot the red flags. It's never going to answer the question in a yes or no way, but it certainly helps you figure out where to focus.

Stacia Garr:
Yeah, definitely. Well, wonderful. Thank you so much for coming on and sharing your story with us and with folks who are listening today and who will listen on recording as well. We really appreciate it and good luck to you and your journey of continuing this work and in sharing it with others. Thank you so much.

Rajesh Anandan:
Stacia thanks so much for having me.

Stacia Garr:
Thank you. Bye-Bye.

 

We read a lot at RedThread—both to directly inform our research and because we’re reading junkies. We also listen to a lot of podcasts. (In fact, in this piece, we use “reading” as shorthand for “consuming content,” regardless of whether we’re consuming a podcast, book, audiobook, or article.)

Part of our mission at RedThread is to accelerate the flow of ideas through the marketplace—and one way we do that is by sharing what we’re doing / thinking as soon as we’re doing it. In that spirit, we want to share what our team members are reading these days.

We’ve divided the list into 4 sections:

• Reading that directly informs our research
• Reading that keeps us up to date in the field
• Reading that broadens our horizons
• Reading that we plan to do

Throughout this post, all titles and images are hyperlinked to the source. Let’s dive in!

Reading That (Directly) Informs Our Research

These books, articles, and podcasts help drive our thinking on the specific topics we’re writing about currently—topics like purpose; diversity, equity, inclusion, and belonging (DEIB); people analytics; learning; and skills. Here are our top things to read in this category.

The Enlightened Capitalists

In this book, author James O’Toole gives a fantastic historical perspective on how businesses have approached purpose. We’ve been doing a lot of research on the topic of purpose—individual, team, and organizational—and found this book remarkably enlightening (pun intended). It helped us understand how our collective concept of purpose has changed over time and why purpose is such an important component of a business’s success, now more than ever before.

 

Reimagining Capitalism in a World on Fire

Also supporting our purpose research, this book’s author Rebecca Henderson describes how capitalism is on the verge of destroying the planet and destabilizing society. Capitalism is destabilizing the climate, driving human deaths and mass species extinctions. Wealth is increasingly unevenly distributed and many institutions that have historically provided stability—families, faith traditions, governments—are “crumbling or even vilified.”¹ What can org leaders can do to change the path we’re on? A lot—and this book offers a practical roadmap for how businesses can build a kind of capitalism that works for everyone.

 

Caste: The Origins of Our Discontents

A number of people recommended this book to us, including Deborah Quazzo, Managing Partner at GSV Ventures and one of the guests on our “Is Purpose Working?” podcast season. Isabel Wilkerson writes about the existence of a invisible caste system in America and how that system influences us all. She shows how a rigid hierarchy is embedded in our society and institutions, feeding racist policies and beliefs in ways we often do not see. The book supports the research we’re doing on DEIB.

 

How to Be an Antiracist

This powerful book reshapes the reader’s notions of what it means to be racist. Starting from the idea that there are very few people in the world who think, “Yes! I’m racist!”, author Ibram X. Kendi helps readers understand that racism is fundamentally a problem of systems, policies, and institutions that foster inequity and invite individuals to (sometimes unconsciously) hold beliefs and commit actions that also foster inequity. The book paints a compelling picture of how we can all be antiracist by actively and continuously pushing ourselves, our communities, and our institutions to promote equity. This book supports our research on DEIB.

 

Reading That Keeps Us Up to Date in the Field

We love these sources—none of which, you’ll notice, are books—because they reflect some of the most leading-edge thinking on the topics we care about. If you like RedThread’s research, then you’ll probably find these resources helpful, too.

Articles by Matthew Daniel

Matthew is a longtime learning leader who writes about skills, talent, and learning. One of our favorite quotes:

Ultimately, we in L&D may be robbing our organizations of some of the greatest potential in talent, because they sit in the frontline and they're non-exempt employees—and so they just don't get access to content, or the systems, or the programs, or the mentoring, or the class.²

Matthew is a very forward-leaning thinker in the talent and learning space. He’s a regular contributor to CLO Magazine and posts valuable content regularly to LinkedIn.

Learning Tech Talks

This podcast, hosted by Christopher Lind, gives one of the most comprehensive (and entertaining!) perspectives around on learning tech—vendors, challenges, opportunities, ecosystems, and more. Each episode features a learning tech vendor talking about the problems they’re trying to solve. We like it because it’s not salesy, it’s always informative, and Christopher has an amazing ability to synthesize what’s going on in the space.

 

David Green’s Monthly Roundup of People Analytics Articles

Every month, David Green posts on LinkedIn a summary of the top articles published that month on people analytics and related topics. Each post contains a dozen or more articles, each summarized in at least a paragraph, often with helpful charts and graphics. This single monthly post is a great way for us to keep up to date on what other people are saying in the field.

 

HRTech Weekly Podcast

Stacey Harris and John Sumser at the HR Examiner host a weekly podcast, “HRTech Weekly One Step Closer.” They cover topics ranging from HR tech trends to analysis of tech vendors, recent mergers and acquisitions, and the implications of senior leaders’ movements between orgs. This weekly show is another fantastic way we stay current on others’ thoughts in the field.

 

McKinsey & Company Research on the Future of Work

McKinsey has been publishing a lot on skills, reskilling, upskilling, and the future of work. The company’s findings are well-researched and highly informative. These articles help keep us current on others’ work on the topics of skills and learning—for example:

Learning itself is a skill. Unlocking the mindsets and skills to develop it can boost personal and professional lives and deliver a competitive edge.³

McKinsey Quarterly, August 2020

Reading That Broadens Our Horizons

Curiosity may have killed the cat…but it sure makes us better researchers! We read a lot of stuff that’s not directly related to our research projects or even our areas of focus. These books, podcasts, and Facebook groups (yep) help us stay on our intellectual toes and keep us growing, learning, and thinking.

More: A History of the World Economy from the Iron Age to the Information Age

Author Philip Coggan writes the weekly Bartleby column for The Economist. Here, he’s provided a sweeping history of trade, industry, and growth in the global economy from ancient Rome to the 21^st century. We enjoy his style of putting complex information about management and the world of work in an easy to comprehend and interesting format that’s very appealing.

 

 

Prediction Machines

We’ve been talking about how AI will disrupt our lives and work for some time now—but how, exactly, will that happen? Authors Ajay Agarwal, Joshua Gans, and Avi Goldfarb explore the economic implications of the price of AI, which is declining in a way that’s similar to how the price of computing declined in the 1980s and 1990s. The book was recommended to us to truly understand AI disruption.

 

 

Profiles in Courage

In 1954, then-Senator John F. Kennedy decided to write a book profiling 8 of his predecessors: Senators from history including John Quincy Adams and Daniel Webster. The book won a Pulitzer Prize in 1957 and became a classic on courage in the face of difficulty and pressure. It’s an exceptional view into leadership in different times—with real implications for today.

 

 

The Rise: Creativity, the Gift of Failure, and the Search for Mastery

This book is an amazing exploration of failure—what it is, what it isn’t, and how failures are part of the journey to successes. Author Dr. Sarah Lewis, an associate professor at Harvard, has a background in art and culture—and uses these lenses in her lyrical, insightful, and practical exploration of the true nature of failure. (Hint: It’s not what we tend to think.)

 

Raising Kids with a Growth Mindset

This resource isn’t a single article or book—it’s a private (though very large) Facebook group of parents learning to live and parent with a growth mindset. Although most of the discussions focus on how to help children, the lessons and insights that group members share are often equally—if not more so—relevant to adults. We’ve found it to be some of the most helpful self-awareness and growth content available anywhere.

Reading That We Plan to Do

You probably won’t be surprised that we have long lists of things we want to read, but haven’t yet. Here are the top few.

The Making of Asian America

Given current events, we think it’s tremendously important to better understand the history of Asian-Americans in our country. Asian immigrants and their descendants have played a major role in U.S. history, but much of this influence has been overlooked or forgotten. This book by Erika Lee, a professor, author, and historian at the University of Minnesota, was recommended to us as a comprehensive, engaging, and fascinating way to learn something we should already know: how Asian-Americans have shaped the history of the United States.

 

The Remote Work Revolution: Succeeding from Anywhere

Looking ahead to post-pandemic life, we’ve recognized that work—like life—will never look the same. In this new environment, employees want to know how to stay connected while maintaining work-life balance; managers want to know how to lead remote teams; and orgs want to know how to enable great work to be done. We’ve heard that this book by Tsedal Neely answers many of these questions. It’s a practical guide for leaders, managers, and teams as they figure out what works best for them and their organizations.

 

You Are Your Best Thing: Vulnerability, Shame Resilience, and the Black Experience

We are looking forward to reading this product of a collaboration between Tarana Burke and Brene Brown—something that combines Brown’s work on vulnerability with Burke’s work on shame resilience. They bring in Black authors, artists, activists, and more to share their stories—resulting in a “stark, potent collection of essays on Black shame and healing” within a space where we can “recognize and process the trauma of white supremacy…be vulnerable and affirm the fullness of Black love and Black life.”⁴

Brave New Work: Book & Podcast

This resource started as a book and has continued on as a podcast about the way we work. Author Aaron Dignan explores the “operating systems” of organizations—the things that comprise organizational culture—and how we can improve the ways we work.

 

 

The Making of a Manager: What to Do When Everyone Looks to You

There’s increasing research that, to improve performance, employee engagement, and other key metrics, orgs should focus on helping their managers become better managers and leaders. This book by Julie Zhuo is a practical guide designed to do just that. Each chapter focuses on a specific aspect of management—for example, holding effective meetings (and canceling unnecessary ones)—and offers specific advice to new managers learning the ropes.

 

 

More Reading

For more sources related to our current research agenda, check out these lit reviews:

• Learning Content in the 2020s: What the Literature Says
• Choosing Learning Tech: What the Literature Says
• The Changing Perspective on Mobility
• Competencies vs. Skills: What’s the Difference?
• Skilling: 5 Themes in the Conversation
• The Purpose-Driven Org: What the Literature Says

What Are You Reading?

You might have noticed from this article that we love reading. We want to hear from you: What are you reading these days? What questions are you trying to answer for yourself?

Share your favorites with us at [email protected]!

Why We Care

Tell us if this sounds familiar to you:

Company ABC: “We’re committed to ensuring diversity, equity, inclusion, and belonging (DEIB) at our organization and, to show that we mean it, we’ve recently implemented a new DEIB program. We also aim to increase our diversity numbers from X% to Y% in the next N years.”

News headlines a few months later: “A new report on Company ABC details new employee complaints about the conduct of executives and leaders. The report contains details of a “toxic and exclusionary culture” as described by many employees at the company and includes inappropriate remarks made by people at the company.”

We bet you’re able to name a company (if not 2 or 3) that would fit this scenario, especially given the social justice events of the last year.

Unfortunately, scenarios such as this are all too common. Even though a company might think it’s taking the right steps by implementing diversity, equity, inclusion and belonging (DEIB) policies and processes, it could still foster an environment in which people feel left out, discriminated against, and marginalized. A study conducted in 2019 revealed that 40% of people feel physically and emotionally isolated or excluded in the workplace.^1,2

At a minimum, a culture that alienates certain sections or groups of employees can make employees uncomfortable with and disengaged from their work, resulting in orgs losing untold hours of productivity. A recent 2020 study into inclusive workplaces found that 45% of the survey respondents didn’t feel included in their workplaces and three-quarters of those felt disengaged from their organization.³

And, at its worst, a toxic and hostile work environment can result in people leaving their jobs or taking legal action, and / or in orgs missing out on critical talent. The same 2020 study found that 39% of the survey respondents reported having turned down or deciding not to pursue a job because of a perceived lack of inclusion at an org.⁴

Skills: The Muscle We Need?

As we’ve previously written on this topic,⁵ a holistic DEIB system is one in which every organizational process, action, policy, or decision is reviewed through a DEIB lens. We believe a systemic approach to DEIB is extremely critical to driving equitable change in orgs today. Yet, such a system is comprised of individuals and it’s often the interactions between people that can cause DEIB challenges.

Unfortunately, though, the effectiveness of many orgs in encouraging change in the behaviors of individuals is poor: It’s been well-documented that most diversity training doesn’t work.⁶ Further, unconscious bias training—which has been the rage for the last 5 years or so—also has relatively little evidence⁷ to show that it can drive changes in behavior.⁸

We’ve, therefore, been scratching our heads, trying to identify what org leaders should be doing instead. After a lot of thinking, we’re wondering if by focusing so much on changing behaviors, orgs have been missing something else that matters.

What if, instead of focusing on DEIB-related behaviors, we should be focusing on DEIB-related skills?

Stepping back: What’s the difference between behaviors & skills?

You may wonder what the difference is between a skill and a behavior. Many perspectives exist on the distinctions and, to keep it simple, lets focus on 2 key differences:⁹

1. Skills transcend context (or circumstances) while behaviors are context specific. If people have mastered a skill, then they can apply that skill in different contexts, whereas a behavior can only be exhibited in a specific context.
2. Skills are applied, meaning they’re “how” you do something. Behaviors, by contrast, are exhibited, meaning they’re “what” you do.

For example, someone might behave erratically (the what—behavior) in a situation, by applying illogical reasoning or lack of thoughtfulness (the how—skills).

So, how does that apply to DEIB?

The distinction between skills and behaviors matters because it highlights the problem with a lot of DEIB training: It focuses more on the “what”—the kind of behaviors people should exhibit—instead of on the “how”—the skills they need to develop that then result in desired behaviors.

Another problem with a lot of DEIB training is the focus on helping people understand what their behaviors should be in certain DEIB situations (e.g., a situation that involves sexual harassment or blatant discrimination), instead of focusing on the skills needed to effectively respond to such situations. This issue arises because the same behavior might not be applicable in a different DEIB situation—but, if an employee has the necessary skills, then they’ll be prepared to respond more effectively in any DEIB situation.

DEIB-related skills

Because skills transcend context, they can be applied to different DEIB situations. For example, in an interview we conducted years ago, an enlightened D&I leader told us:

“Managing conflict is critical for D&I. You have to be open to different perspectives, know how to manage the discussion around those, and be able to help the team get to a better resolution. If you can do that, you can be both diverse and inclusive.”

Conflict management is one such critical skill that can be applied in various DEIB situations.

Recently, a number of articles have shown how skills, such as empathy, are increasingly seen as being crucial to fostering a culture of inclusion and belonging. For example, research shows that a combination of awareness around bias and high levels of empathy / perspective-taking can increase feelings of inclusion by up to 33%.¹⁰

Listening is another skill that can have a critical impact on feelings of inclusion. Growing evidence shows that leaders who listen to their employees are able to foster productivity, emotional connections, and reduce conflict or misunderstandings.¹¹

“When we listen and celebrate what is both common and different, we become wiser, more inclusive, and better as an organization.”¹²

—Pat Wadors, ex-CHRO, LinkedIn

In fact, listening became one of the most needed skills by orgs as a result of the changes in work environments brought about by the disruptive events of 2020. According to learning provider Udemy, listening was the most sought-after communication course topic offered by the platform in 2020, with a course consumption percentage growth of 1,650% from 2019 to 2020.

“In a year where we’re all searching for ways to relate to each other and feel connected during uncertainty, it’s completely understandable why listening would be one of the most sought-after skills.”¹³

—Shelley Osborne, Vice President of Learning, Udemy

Now that we’ve discussed the importance of skills for DEIB, let’s look at the status quo.

Skills & DEIB: Ready to be Understood

Focusing on developing DEIB-friendly skills as a way to increase DEIB in orgs seems like a very obvious solution. However, we haven’t seen much research on this topic.

Most of the articles we’ve seen so far seem to focus on a single skill—such as vulnerability¹⁴ or empathy¹⁵ or openness¹⁶—and how each can impact DEIB. Relatively little has been written on groups of skills that can impact DEIB. Of the articles we’ve seen, there seems to be a lot of anecdotes and opinions, and too little structured research, either quantitative or qualitative. (But if you’ve seen good articles, send them our way!)

Further, we haven’t seen research on how to holistically approach the identification and development of these skills, nor have we seen any focus on the role technology can play in supporting the development of these skills.

We believe this lack of data and insights results in orgs not focusing on improving DEIB-friendly skills. In some instances, orgs are providing one-off efforts—such as offering single-skill training sponsored by an employee resource group (ERG) or the learning team—but those are hardly comprehensive approaches to improving the DEIB skills of the entire org.

Our hunch is this: If organizations approached DEIB skills holistically, then we might see some meaningful movement on critical DEIB outcomes—plus a lot of others that we care about.

Our Hypotheses

We have the following hypotheses for this research:

• A subset of skills are critical to fostering an environment of DEIB
• Orgs in which such skills sets are present, along with a clear DEIB strategy,¹⁷ will have stronger DEIB, talent, and business outcomes than those that don’t
• Employees / managers and HR / DEIB leaders will have different opinions on what those skills sets are
• Orgs can build into their talent practices a focus on these skills, effectively weaving DEIB and talent efforts together
• Tech plays a role in scaling the development of these skills

What We’ll Research

Through this research, we seek to answer the following questions:

• What are the skills that contribute to DEIB, specifically fostering diversity, enabling people to feel included, and building a culture of belonging in the workplace?
• What can orgs do to develop these skills, including specific approaches, modalities, etc.?
• How can orgs leverage those skills to drive DEIB?
• What is the role of tech in enabling this to happen?

We plan to include the following groups of people in the research:

• DEIB leaders
• HR / learning leaders
• Operational business leaders
• Managers
• Employees (especially ERG leaders)
• HR tech vendors (focused on this topic)

How to Participate

We’ll be conducting this research over the next 3-5 months and invite you to participate in the study. Currently, we offer you 4 ways to participate:

1. Answer this short questionnaire. Help us understand which skills you think are most critical to fostering DEIB and what specific questions you think we should address in our study.
2. Let us interview you. We’re looking to interview 4 groups—if you're in one of them and are up for a 30-45 minute interview, reach out to us at [email protected] and we’ll schedule you at your convenience:
   • DEIB leaders
   • HR / learning leaders
   • ERG / BRG leaders / other business leaders involved in DEIB efforts
   • HR tech vendors (focused on this topic)
3. Join the conversation. We’ll be conducting roundtables on this subject starting in April. Keep your eyes open for information on the specific dates—or reach out to us at [email protected] and we’ll send you an invitation.
4. Share your thoughts. Read our research and tell us what you think! Shoot us a note at [email protected]. Your comments make us smarter and the research better.

Why We Care

Last year, in the aftermath of the social justice protests, many organizations made significant pledges to alter hiring and promotion practices to create greater equity and opportunity for people from diverse backgrounds. For example:

• Adidas said it would fill at least 30% of all open positions at Adidas and Reebok with Black or Latinx candidates
• Estee Lauder promised to reach U.S. population parity for Black employees for all levels in the next 5 years
• Facebook pledged to double the number of Black and Latinx employees by 2023

In the last few months, we’ve also seen an increasing number of diversity and inclusion reports published from firms, such as Deloitte, PWC and others, promising increased transparency and focus on this topic. There have also been announcements by companies such as Nike, Chipotle, McDonald’s, Google, and others, tying executive compensation to hitting diversity goals, underscoring the importance these firms are putting on DEIB.

This Might All Sound Familiar

As you might recall, in the mid-2010s we heard similar pledges (and saw the publishing of diversity reports) from Google, Facebook, and Apple, after women such as Tracy Chao and investor Ellen Pao brought attention to Silicon Valley’s diversity problems. And, to their credit, most of those companies (Apple being the exception) are continuing to publish those reports.

Those reports have revealed—surprise, surprise (or not)—that making progress on diversity representation is a slow and uneven business. For example, Facebook, which has one of the better public diversity reports, has improved its percentage of women from 31% to 37%—and from 15% to 24% for technical roles—from 2014 through 2020. However, they have only improved the percentage of Black employees from 2% to 4%—and from 1% to 1.7% in technical roles—across that same period.

This slow pace has not gone unnoticed, as commentators from all stripes (but most notably the mainstream press) have regularly flogged those companies for not making as much progress as we all want. As one commentator mentioned,

“These companies are data-driven, but if people are not hitting their diversity metrics, where’s the downside? You have metrics, but no consequences.” —Bari Williams, head of legal, at start-up Human Interest

It would be easy for leaders to conclude that they’re “damned if they do” track / publish data and “damned if they don’t” (because they don’t have data to understand what’s happening). When you combine this situation with the potential legal consequences of diversity (and inclusion) data, you end up with a whole lot of inaction—which is what we’ve generally seen to date.

This Time Is (Likely) Different

But this inaction is untenable for at least a few reasons:

1. Consumers want companies to take action—and will reward them if they do. According to the Edelman Trust Barometer, 80% of Americans want brands to help solve society’s problems and 64% want companies to set an example of diversity within their organizations. Further, corporations that take a stand on racism are shown as being 4.5 times more likely to earn / keep consumers’ trust and those doing well with addressing racial issues are 3 times more trusted. Brands’ responses to racism also influence purchase intent. 

To capture the potential goodwill of consumers, though, companies must show that they’ve acted or made progress on DEIB¹ —and the way to do that is through DEIB metrics and analytics.

2. Diverse employees left the workforce during the pandemic—and companies have to figure out how to get them back. Diverse people have borne the brunt of the pandemic:
   1. Women left the workplace at the steepest, most sustained level since World War II
   2. Black and Latinx workers suffered from higher levels of job losses, as reflected by their unemployment rates for February 2021 which were at 9.9% and 8.5%, respectively—as compared with 5.6% for White employees
   3. More than a million people with disabilities lost their jobs during the pandemic

As we all look to a post-pandemic world, there’s a good chance we will see at least two things: significant movement of talent (who may have stayed due to economic uncertainties, but now see a chance to jump) and a strong economy. To effectively take advantage of both of these changes, organizations will need to foster DEIB to both attract newly available talent (and retain existing talent) and to leverage the benefits DEIB brings, such as innovation, as they look to grow.

Beyond the potential business benefits, though, businesses have an opportunity to make a broader societal impact by redesigning work so that all employees can participate more equitably and inclusively.

Bringing back people who left the workforce will take intentionality, clear policies and practices, and data—lots of data—to understand what’s happening, what’s working, and what could be done differently.

3. New SEC human capital reporting guidelines are likely to result in more DEIB data disclosures. The Securities and Exchange Commission (SEC) revised its 10-K reporting requirements, effective 9 November 2020, requiring companies not just to report the number of employees, but also to provide:

“A description of the registrant’s human capital resources, including the number of persons employed by the registrant, and any human capital measures or objectives that the registrant focuses on in managing the business (such as, depending on the nature of the registrant’s business and workforce measures or objectives that address the development, attraction, and retention of personnel).”

While there’ve been a range of approaches to these new reporting requirements, it’s hard to imagine that DEIB metrics don’t count as “… measures or objectives that the registrant focuses on in managing the business,” especially when you consider the new ties for many companies between diversity metrics and executive compensation.

Further, given all the research that shows the connection between DEIB and business results, you would think that DEIB metrics would be an essential piece of information investors would want to know.

Or, viewed through a more cynical lens, investors might feel they are entitled to information that could result in potential future legal action, such as systemic (intentional or not) discrimination against a certain group, that would be revealed by DEIB representation numbers. If the company has at least disclosed this on its 10-K, then the company may be less likely to be open to legal recourse from investors. (At the same time, maybe it makes clear that potential discrimination exists? I dunno, there’s a reason I didn’t go to law school.)

In short, DEIB data is going to be more important than ever to investors, and companies must figure out how to provide it efficiently, consistently, and in an appropriate manner.

Recalibrating the System

Given all this, we think it’s safe to conclude that DEIB metrics and analytics are more important than ever. But, to our earlier point, it’s not as though DEIB metrics weren’t important before—it’s just that many orgs haven’t been terribly good at developing or using them. Why?

In short, we think it’s because organizational realities have resulted in a system that’s made identifying, tracking, and using DEIB metrics hard. Specifically:

1. A gulf exists between most DEIB leaders and analytics leaders
2. It’s unclear what data to use and how they should be used
3. New DEIB tech vendors offer solutions, but it’s unclear how these solutions fit in

A Gulf to Bridge

Unfortunately, in most orgs, the gulf couldn’t be larger between the groups leading the DEIB efforts and analytics. It’s true that DEIB and people analytics often report to different leaders—DEIB to the CEO or an operations leader at least half the time, and people analytics to the CHRO, talent acquisition or talent management leader, or a centralized analytics team.

But there’s more to it than that—and those differences include the following:

• Background:
  • The leaders of DEIB teams are often folks who hail from a social justice or diversity-focused background
  • Whereas people analytics leaders often have a data, computer science, machine learning, or math background
• Focus:
  • Many (certainly not all!!) DEIB leaders focus heavily on activities that have comparatively little to do with data (at least on the surface), such as setting up employee resource groups, managing DEIB events, collaborating with the local community, etc.
  • Many analytics leaders (again, certainly not all!!) are only involved in DEIB efforts from the perspective of participating in them—but have had little knowledge of any of the theories and approaches underlying those initiatives

• It’s the ultimate situation with “quants and poets” needing to work together—and in most orgs they haven’t yet.

  This situation has resulted in questions, such as:

  • How should DEIB and people analytics leaders partner on DEIB data and analytics?
  • When should people analytics be brought into DEIB discussions?
  • What is people analytics’ role in determining a DEIB strategy, especially as it relates to public proclamations of changes to representation numbers (i.e., doubling the representation of a certain group in 3 years)?

  Data Uncertainties

  Beyond these organizational and dispositional differences, there’s the question of the data itself. Diversity data have historically been treated with kid gloves, with a super select group of leaders being able to see them. Further, much of that data analysis has focused on satisfying Equal Employment Opportunity Commission (EEOC) requirements, without much additional analysis, for fear that the analysis could potentially end with the company in hot water from a legal perspective.

  In recent years, we’ve begun to see a seismic shift (we don’t say that lightly) around the thinking about DEIB data. Leaders are realizing that the potential reputational risk of NOT doing something about DEIB could be larger than the potential legal risk of uncovering something no one wants to see. As a result, they’re moving ahead with analyses.

  However, decades of inaction have resulted in orgs having a noticeable weakness when it comes to identifying, tracking, and using these data. Many leaders want to know things like:

  • What types of data can we use, who can see the data, and what precautions must be taken from a legal standpoint?
  • What are the basic metrics and analyses we should focus on initially? How does that change over time?
  • How should we “productize” DEIB analytics and metrics? To whom should that information be made available?

  Unclear Role for Vendors

  Finally, as we’ve written about for years, the DEIB tech market has grown substantially—and the biggest growth in that market has been around DEIB analytics. That said, in our interviews, we’ve heard things like:

  “I don’t know how DEIB tech vendors should fit into my overall DEIB strategy. When do I use their analytics versus our analytics and how do I integrate all this information?” —Chief Diversity Officer

   

  “If I had a dollar for every time another people analytics leader told me that the Chief D&I Officer brought in a new tech solution without understanding what people analytics could do to help them—I’d be a very rich man. It is so frustrating! We can do so much of this work, but they don’t ask!” —VP of People Analytics

  This lack of clarity on how to work together is causing friction in the adoption of new technologies and the effective use of internal people analytics teams. Some of the important questions here include:

  • Are there particular types of work that vendors are best-suited for—versus people analytics or DEIB practitioners building the tech themselves?
  • When should vendors be brought in?
  • Who should manage the DEIB vendor relationship?
  • Where does the budget typically lie for DEIB tech?

  What We’ll Research

  We’ve laid out our thinking above on the specific questions we think are critical to answer in this research. To summarize, though, the top questions we plan to address are:

  • How should DEIB and people analytics leaders partner to drive DEIB efforts?
  • What are the different types of data and analysis approaches organizations are using / can use to understand DEIB in their orgs?
  • What’s the role of vendors? When should they be engaged by DEIB and analytics leaders?

  That said, we know we’re just at the tip of the iceberg on this topic and realize there is plenty we don't know about. To that end, we’d be deeply grateful if you could take 2-3 minutes to tell us in the questionnaire below what you most want to know about this topic:

  How To Participate

  This study spans the next 3-6 months, so there are lots of opportunities for you to participate. At the moment, we invite you to be part of this research in 4 ways:

  How should DEIB and people analytics leaders partner on DEIB data and analytics?

  1. Answer the above questionnaire. Help us understand which of the 3 areas we’ve identified that you care to learn about the most and what other questions you hope we’ll address.
  2. Let us interview you. We’re looking to interview 3 groups — if you're in one of them and up for a 30-45 minute interview, reach out to [email protected] and we’ll schedule you at your convenience:
     • DEIB leaders
     • People analytics leaders
     • DEIB analytics tech vendors
  3. Join the conversation. We’ll be conducting roundtables on this subject, starting in April. Keep your eyes open for information on the specific dates—or reach out to us at [email protected] and we’ll get an invitation to you.
  4. Share your thoughts. Read our research and tell us what you think! Shoot us a note at [email protected]. Your comments make us smarter and the research better.

Q&A Call Video

TRANSCRIPT

Introduction

Stacia Garr:
All right. So we're going to go ahead and get started. We did have a smaller acceptance for today. So maybe just be us, but that's great. So really for the sake of the recording, cause I know most of you here I'm Stacia Garr, I'm co-founder of RedThread Research were a human capital research advisory membership, and we focus on a range of things, including most relevant for today, diversity, equity, inclusion, belonging, and HR technology. So what we're going to do today is to just give a few of the findings from the research, and then I'm going to let Priyanka do quite a bit of that. And then we're going to answer either the questions that you have here, or we also have a few questions that were submitted in advance. For folks who are maybe new to this conversation, this is a conversation. It is very informal. And the idea is really just to give a chance to to get your questions answered or to have a good discussion about this topic of DEIB technology. Okay. Priyanka, do you want to move on?

Defining DEIB

Priyanka:
Well, okay then I'll move ahead with just setting the stage up. So what I want you to do very quickly was just share a few definitions of how we define our concepts, these concepts of diversity, equity, inclusion, and belonging. And I'll just give everybody about 20 seconds to read them because they're slightly longer for me to read them on for everybody. So if you want to just stick a second and then we'll move ahead with this.

DEIB became a bigger priority in 2020

Priyanka Mehrotra:
And moving on. So just setting the stage of why you're talking about DEIB this year, of course we know DEIB became a very crucial topic in 2020 for various reasons. COVID-19, BLM movement, social justice movements, natural disasters, everything just kind of made the DEIB so crucial in 2020, and we have this data here from Glassdoor, which showed us that there's been such an immense rise in DEIB job openings in summer 2020 and 250%. That's crazy. And we can see the lines moving right after social justice movement gained momentum in the summer of 2020. And as we can see, like in December 2020, it's just completely shot up higher than it had ever been before. So when you think about the role of DEIB tech, there are a few things why we think it's so crucial and what is it that it can actually do.

The role and types of DEIB Tech

Priyanka Mehrotra:
So a few things that we wanted to highlight, what is it that it can do for us? And it can uncover bias in policies, practices, and programs. It can help us identify gaps between goals and actions. It can make recommendations on what are the steps that leaders and organizations should do next, and it can analyze data and information for greater insights. So keeping these things in mind and looking at the technology that vendors are offering in this market, there were a few things that we noticed about the types of tech that we typically tend to see in the market. We decided we divided them into three types that we majorly see. We have the DEIB focused vendors where their primary business is focusing on DEIB. That's how they go to market. Then we see the DEIB feature venders their primary business might not be DEIB.

DEIB Tech market in 2021

Priyanka Mehrotra:
They might be going to market with something else, but they do have features and additional capabilities that directly address DEIB. And then we have the DEIB friendly vendors who maybe going through market for totally different reasons, such as the recruiting software, but they, for example, they might have artificial intelligence that can be used for DEIB purposes as well. So looking at the DEIB market in 2020, 2021, what are the major trends that we saw during our study, one we saw an overall growth in the market. We saw a major increase in HR tech vendors in general offering DEIB features that part of the solution. So the DEIB feature vendors that I just mentioned before. We saw a major increase in the number of vendors who are offering these capabilities as opposed to DEIB friendly or DEIB focused vendors.

Priyanka Mehrotra:
We saw greater focus on inclusion and the impact of AI on mitigating bias. So we've traditionally focused on diversity for so long, but inclusion really came into being in 2020 and 2021. Last, we saw evolution of emphasis from gender to race and ethnicity. So during hashtag me too movement, that was a lot of focus on gender. In 2020 we saw that shift towards race and ethnicity really come into its own. And people analytics for DEIB has arrived that's what we saw in a big way in our findings. And so I'm just going to touch on all these points at a very high level.

Stacia Garr:
Sorry. Do we want to ask if anybody has a high level question on any of those five before we dive in?

Priyanka Mehrotra:
Yes. Thank you Staica.

Speaker 1:
Not for me. Very straightforward.

A more steady evolution

Speaker 2:
Question Priyanka. So you say there was a shift from gender to ethnicity and race. You refer to the, me too, as a, as a, let's say a movement or a trend. We have the Black Lives Matter. Is, is this like really sensitive to societal evolutions? Is that what you see and might change again? I mean next year, if another topic comes on the political agenda or is it a more steady evolution?

Priyanka Mehrotra:
I think I would say it's been a more steady evolution. We definitely continue seeing gender as a very important part of what DEIB tech vendors are providing as part of their offerings. But we also started seeing some Venders include race and ethnicity as part of, for example, the service that they're providing for that customer. So race becomes a part of it and intersectionality became quite important and became quite common. We started to see more and more vendors offering that in the way that the customers can slice the data and see how they can create groups. So for example, I know Visier offers a cohort analysis in which you can create any type of groups, right. And you can create groups that have different attributes and you can compare them. So, so we started seeing more and more vendors really bringing those capabilities into their solutions. Stacia, did you want to add anything?

Stacia Garr:
Yeah, so I think I mean gender has been a common focus largely because it's something that is you can focus on globally. There aren't as many differences in terms of what you can study or look at as race. I would say though that this, the movements of this summer, and I wouldn't call them political movements. I mean, I think they're very much social movements, at least in the United States. They were response to what was happening. That doesn't mean that there wasn't already, in there certainly is a deep problem that was existing. But I think, but it was a reaction. I will say though, and I've been kind of contemplating this and I don't have any data to prove it, but I, wonder if there was a greater willingness to focus on race, which has been a very difficult topic, certainly in the United States, a greater willingness to focus on it because it was immediately following the pandemic where we had kind of in, in some ways, softened ourselves up to say, we don't have all the answers and our executives, our leaders were saying we don't have all the answers.

Stacia Garr:
And they'd kind of gotten into a habit of, of saying that for three months. And then we have these massive protests in, in this movement. And so I think that there was just a greater willingness than we've ever seen for people to say, Hey, you know, maybe what we thought was happening, wasn't happening, maybe what we thought, you know, that we were more inclusive and yet it seems like maybe we weren't. And so I think there was that greater openness, but I think, you know, your, your question Speaker 2 kind of says, okay, well you, if we focus on race and ethnicity here in 2020 and 2021 and maybe 2022, is there going to be something else in 2023? I mean, I think potentially, but I think that that opening of the aperture to focus on more diverse groups and folks who haven't had that spotlight, if you will, on their experience is probably a good thing. I think we're going to see in general, more of that opening of the aperture.

Regulation

Speaker 1:
And actually on that topic. Can I ask a quick question in terms of the role that you see regulation playing in this, obviously in the UK with gender pay gap reporting, obviously, you know, drives a requirement and adoption and awareness in the market. We're starting to see, you know, the emergence of regulation taking place in some markets, but specifically in the US do you guys have a particular view on the likelihood of the emergence and proliferation of regulation?

Stacia Garr:
I would say don't have a particular point of view. I may think that we're, we have seen regulation in general it has, we have seen movement. So I think that, you know, that there's one aspect of it that can certainly be positive. Obviously though, you know, regulation can be a very heavy instrument to use for some of this. So I don't know that I have a particularly strong perspective. But I do think that the, the opposite in the regulation or, or, you know, fear of legal repercussions has had a chilling effect for decades on this space. And so I think that there's a way to think about that, that kind of cuts that way, too, in terms of, you know, how could we actually be encouraging these behaviors in a way that isn't, what's the carrot in this, as opposed to just the stick. But all that said, I think that a lot of this is just, is being driven by employees and, and by customer demand, you know, you look at Edelman Trust Barometer, and what they say in terms of what they expect of leaders to do. And, you know, they say, I think it's 67% of America, or maybe I think actually it's 72% of Americans expect their CEOs to take action on societal issues, particularly related to diversity. So I think that that represents just a bigger shift in, in the society.

Speaker 1:
Yeah. And actually you touched upon something which is going to be a follow-up question, which is really about the complexities of the US legal system, about a liability, once you identify a problem, and that is a hurdle or an obstacle to organizations wanting to better understand where they may have bias, let's describe it as that and the risk that, that creates legally around exposure and liability. I didn't know if you guys have a view on that, is that, that as a, stifling factor and adoption.

Stacia Garr:
Yeah, we do. And I'm going to let Speaker 3 go though, because I know he also a strong perspective here

Speaker 3:
I have a perspective, which is sort of changing the piece, which is around what you're suggesting Speaker 1, which is the SEC disclosure regulation change. The SEC disclosure regulation change means that a investor could sue a company if there is any material loss due to some kind of harassment social injustice element coming out. So, you know, we find out that X, Y, Z company has been underrepresenting or underpaying or in any way, shape or form disadvantages, a group their share price goes down. If an investor holds that and that, that hasn't been disclosed, that hasn't been kind of presented, then they can potentially say, you should have known this was a material problem. You didn't, you didn't disclose it. I'm going to sue you for nondisclosure. It hasn't happened yet.

Speaker 1:
It's almost like double stick. Then there's a stick waiting for you. If you identify a problem, there's a stick waiting for your, you died.

Speaker 3:
Yes. Yeah. And people are working at which side of that. They want to be on. It's a good thing.

Speaker 1:
The biggest stick. Okay. Thank you, Speaker 3. I appreciate it.

Stacia Garr:
Yeah. And then I think the other component of this is folks are weighing the reputational risk with the legal risk. So kind of beyond the risks that Speaker 4 was talking about, but, you know, there's so many organizations who have just been on the wrong side of it because consumers are now taking action. You know, we're, we're seeing broader social action against organizations who are not responding to this. So I, you know, I've been, I feel like I've been saying this for a few years, but I feel like there's almost a grace period right now in the eyes of the consumer where it's like, okay, you know, tech's probably not going to have a great balance of men and women. Right. Okay. Like, let's acknowledge that, but let's do something about it. And I mean, my guess is that if in five years, if we haven't done something about it, consumers will hold companies to much greater account. Whereas right now it's kind of an acknowledged reality that I think that maybe the consumer will be, or customer will be a little bit less likely to hold people account for it, if there's action.

Speaker 1:
Okay. Thank you.

Stacia Garr:
All right. Priyanka you want to keep going?

A growing market

Priyanka Mehrotra:
Yeah. Okay. So real quick, we can touch upon all these key findings that we have here? So a growing market, we saw the overall market size grow to over 300 million since 2019, the total number of vendors went up 296 from 106 that we had identified in 2019. Similarly, the compound growth rate grew by almost 60% since 2019. So a significant growth definitely more solutions with DEIB features.

Priyanka Mehrotra:
So like I mentioned, we saw more and more technology, HR tech vendors who had not traditionally been in the space or had been going to market with a different value proposition, adding DEIB features or capabilities to them. So we saw an increase of 10% of DEIB features, right? As DEIB friendly venders, we saw a decrease of almost 9% and similarly DEIB focused vendors, we saw barely a growth of 1%. So definitely there's, there's a shift in mindset of a lot of vendors who traditionally have not had not been thinking about DEIB in a very specific manner, but adding now DEIB specific feature capabilities and going to customers to allow them to meet these needs and challenges.

Priyanka Mehrotra:
So another key finding of course, was the growth the shift in focus towards inclusion. So in 2019, we know intrusion was still a priority for leaders, but very few were actually measuring it. And now as a researcher, I, when I looked back at the Sylvia, I wish that we had asked people how they were actually measuring inclusion, because I'm really curious to find that out, but it's still great to know that it used, the inclusion is the top measure of success. When we asked vendors how customers measure their success from, from using the solution they said that the increase in inclusion is the top measure. And this has gone from being fourth in rank in 2019. So that's, that's a significant shift that you're seeing.

People Analytics for DEIB has arrived

Priyanka Mehrotra:
The next key finding was of course, my favorite one, which is people analytics for DEIB has arrived. You know, we've been talking about analytics for DEIB for such a long time, and it was great to see an increase of almost 20% which as a, as a primary challenge in vendor, among vendors, who we're looking to solve DEIB related challenges to analytics for their customers. Again, I think this is a very significant finding. We saw a number of analytics, people, analytics vendors who have added DEIB features and capabilities. It goes back to our point of seeing a rise in the DEIB feature venders. So really coming into this field of providing analytics and using that for, for DEIB challenges. So with that, we've covered the key findings and we'll move on to the questions. Stacia, Ready?

Stacia Garr:
Yeah, let's do it.

What should users consider before buying new DEIB Tech?

Priyanka Mehrotra:
All right. So the first question we received was what should users consider before buying new DEIB tech?

Stacia Garr:
I think it's like any other tech, right? So, what is your overall goal that you're trying to achieve? What's your overall strategy, that you're working towards and, where does the technology potentially fit within it and how does it reinforce and enable other practices? So, you know, I think that is, that is always question number one. Question number two is around, I think the level of expertise of the vendor instead of supporting this type of work. So there are some vendors who've been focused on DEIB for a long time and can help guide folks through some of the legal intricacies. Like we just discussed in some other aspects. There's some who are relatively new to this and, and, you know, innovation is always welcome. But, but that may be what you're getting more than kind of the expertise.

Stacia Garr:
And so we think there needs to be a match between what the organization needs and the support it needs and what the vendor is able to provide. And then I think, you know, third is always kind of where what's the match between the vendor themselves and in the organization. He knows some organizations are smaller and, and thus, you know, maybe more nimble, other organizations are larger and perhaps it better able to scale. So again, what are your organization's needs? And what's the ability to absorb that type of culture and, really status of the vendor. So those would be my top three.

Benefits & risk of DEIB Tech

Priyanka Mehrotra:
Yeah. And I would add to it. So a few things that we had highlighted in our report is as with any technology, you really have to understand what are some of the benefits of using it, but also some at the same time, what are the risks that come with it? And of course DEIB technology being, being in the space that it plays, and it's really, really important that users before they adopt it, understand some of the benefits of doing that. So just at a very high level, just going through some of the benefits that we see of using DEIB technologies, of course, providing equal opportunities for everybody raising awareness and real time, enabling individual actions, as well as on a broader level, providing insights in critical decision-making moments, creating more consistent processes, measuring and monitoring impacts of efforts to analytics, of course, and signaling importance as well as building trust and confidence.

Priyanka:
So those are things, of course they're not exhaustive, but some of the really important benefits that somebody can reap out of DEIB technology provided it's done correctly and applied in a thoughtful manner. And of course, these come with their own sets of risks, such as legal and reputational risks, like Stacia talked about being seen bias and data. And now of course, people who create those technologies, the biases can creep in from that as well. They maybe don't end up being excused themselves. It may also lead to big brother fears, unintended consequences may in fact, end up damaging employee trust and creating a disconnect between people and processes. And again, similar to benefits, of course, that are additional risks, then I'm sure we haven't listed here, but just some key things to keep in mind before looking at purchasing such tech.

Priyanka Mehrotra:
I think Stacia already covered this, like really being thoughtful about where you are in your journey. What is your level of understanding of the DEIB issues? What are the specific goals that you're wanting to solve for and how much support will you need from the vendors similar to what Stacia said, whether it's big enough to support your organization needs, do you have international headquarters? Will they be able to provide you support at all hours of the day? So all those things, I just think that to keep in mind when going to the market, and of course, another thing that we really want to highlight is auditing in-house techs or a lot of companies, or a lot of vendors may already have DEIB tech features and capabilities like we mentioned, and your customers may be using them for something totally different. So for example, Workday and SAP, need to be that we piloted all have recently introduced really crucial DEIB features that people, the customers who are already leveraging these technologies for some other purpose, might be able to use for DEIB as well.

Speaker 1:
Well, ask a related question. And it's more about, you know, corporate adoption and who's championing adoption of those technologies within the organizations. So, you know, if you think about the range of DEIB technologies, whether it's a pay equity solution or whether it's a solution that deals with using AI to remove unconscious bias from, you know, the, the talent acquisition process, you know, it can obviously serve specific functions within HR broadly, right? So, you know, you could be serving a solution that takes out bias in the recruitment process to someone in the talent team, you know, pay equity could go to a reward specialist then obviously separately, you've got DNI specialists now come into organizations where we look, when we look at where organizations have truly champion and adopted these technologies, what's that pattern look like? Is it very fragmented based upon, you know, kind of specific functional focus or is it, HR departments taking a more broad view of how these technologies knit together to solve a problem? Does anyone have a view on that?

Stacia Garr:
I'll jump in and then I'd love to hear other folks' perspective as well, but in general, right now, it's still pretty highly fragmented. I would say generally speaking, the exception to that is when you have a CEO who, or, you know, C suite executive, who's very strongly driving this. And then in that instance, you may have, you know a DEIB council or some sort of centralized group, you know, basically often a kind of a tiger team that's been tasked with figuring out how do we solve this problem and what are the, all the different ways that we could approach it. So when that happens and that's when we'll just tend to see a centralized approach, but otherwise right now it does often tend to be, to be centralized. Priyanka and I actually next week are kicking off a report on DEIB and analytics.

Stacia Garr:
And, and one of our key questions there is kind of what does that partnership look like and who should be driving? What part of that focus, because, you know, there certainly is an onus on whoever's leading DEIB, but a lot of times they're just not in the, in the depth, in the weeds enough to kind of know where this tech sits, what it could do and how it could tie back. So I think that there really is a good question around ownership that that needs to be solved, but to your, to your direct questions cut. I think that it, it depends, but is mostly fragmented.

Speaker 1:
Do you know, what's really interesting about that. Of course, it's really about where the money is in the organization. So I asked the question because, you know, we ask ours have you know, an excellent DNI specialist. That's really helping drive awareness and a change in our practices across the organization. But, you know, she doesn't have much budget, right. Yet we've got large talent teams that do hold large budgets because they're out there working with recruiters. And, you know, so it's also about finding where the dollars are to support these initiatives within organizations. And I think that is also fragmented as well, right?

Stacia Garr:
Yeah, it is. Now I think the thing that's interesting is I think that there can be almost a immediate reaction to say, well, we should have kind of some centralized group that's driving this because that would create greater order, et cetera. But, you know, diversity is one of those things where, you know, if not everyone in the organization is participating where everyone is a part of the solution, you know, then, then it's not going to work. So that centralized model that we use in so many other things, I think doesn't necessarily work. So I think that part of the question is, is how do we heighten the overall awareness? So that the talent leaders who do own that budget are saying, Hey, wait, we have a role here. What could we be doing? And taking a lead, what do others think?

Speaker 2:
Yeah. Well, what I see here in the Benelux is that if it's centralized and it's because there's a clear nonfinancial risks for the company. So if the CEO or there's executive takes ownership or wants to be a sponsor, then it's because there's a real threat because there's value in it. And it's like Priyanka said, you know, in five years customers will hold companies accountable for that. And I see in some industries, companies moving faster, banks, I serve a lot of banks. They for instance, are very much aware of their nonfinancial risks and their reputation also due to the financial crisis, etc. So they're sort of heading that movement now quite unexpectedly, I would say. But it really depends on, I think the value they can see from it or the risks they see from not doing it.

Speaker 2:
And then whenever it becomes relevant, then all of a sudden it does get on the agenda of everyone. If I talk with, with companies about, you know, HR and a big serving, all of a sudden in every company, we get the DNI responsible on the table. All of a sudden this is a person with teeth, whereas before it was a person with posters, let's say, now it's become a person on your team. It's like the data protection officer, the DNI person. Yeah. It gets more and more powered.

Stacia Garr:
Think I might borrow that from posters to teeth.

Speaker 4:
I love that.

Stacia Garr:
Speaker 4, you're going to add something.

Speaker 4:
I love Speaker 1's questions. I think it's quite, it's quite fascinating and sharing something that we were seeing we're in the analytics space. So there's some element of centralized understanding of opportunities, scale challenge. So we have a lot of people, people like leaders working with the DEI leaders that kind of go, well, where are we? What do we need to do? What are the opportunities? And then one of the big things they're looking at is like, what can the CEO say as a forward looking statement, as somewhere we're going to try and hit. So you need analytics, horsepower, you need DEI sponsorship, you need the executive, but to your point, Speaker 1, that the DEI lead doesn't have the money to go and buy a technology that will help tell an acquisition.

Speaker 4:
They kind of need brought into the conversation to say, you know, our funnel is actually our biggest problem, or our attention is our biggest problem. Like the, the analytics is kind of at the hub of that, which problem piece of the problem space to be solved first, but DNI doesn't have the budget without analytics. People are often, you know, fixing different pieces of the bus with different technologies because they're trying to help.

Speaker 1:
And you know what, that's a really interesting point. Now, I, you know, this, this is almost like a, you know, you know, when you get told in school, there's no dumb question, but you know, that there really is. I worry that this is one of those. And I just, whenever I think about this topic, I think about cause and effect, and I think, you know, from what I've encountered, there's lots of solutions that are looking at analyzing the effect, but it's really about how do you then tackle the cause. And actually when you start,

Speaker 1:
And obviously that's a very complex answer because there's, it's multi-dimensional, but, and so of course you, there isn't one solution that helps you to drive that change. It's about culture is about process, about lots of different things. So, you know, the reality is you will probably string together a number of solutions that will help you tackle cores. But again, how do you knit those together? How do you measure the extent of that response as being effective or not effective? And so I just, you know, to me that that's an open area or an open question of how do we tie cause and effect together and how do we help organizations understand that better?

Stacia Garr:
Yeah. I don't think that's a silly question at all. I think, you know that's kinda the question at the, at the heart of all of this, you know when, before anyone implements one of these solutions, you know, one of the things that I talked to them about is, you know, what's success look like? You know, what's the needle you're trying to move. So is it, is it different behaviors? Is it actually representation? I actually tried to discourage the latter because it just takes so long to measure. You know, ultimately of course, that's, that's what most are focused on and hoping for, but but being, you know, clear what, what those measures are, and then you know, to the extent that you can being scientific about it. So, you know, adjusting the job descriptions. Let's say somebody wants to use tech steel or something like that.

Stacia Garr:
You know, do we see any meaningful impact on, on just, you know, the, the number of applicants? Okay, well, let's do it. That's kind of one thing that we, we can measure you know, then interviews, lights, you know, making sure that we have diverse candidates on there as well as diverse interviewers now. Okay. Measuring those behaviors, does that result in any, you know, higher percentage of, of hires, of diverse backgrounds, ect. So I think, you know, being purposeful about the way that you're approaching it, and then being very clear on, on the behavior or the kind of intermediary outcome that you are trying to drive long before you get to representation. I think that can be, can be helpful in understanding that cause and effect much better. But I think, you know, like so many of the things that we do in the analytics space, it's basically a series of ongoing experiments that we're running and trying to see which things are, are impacting what, and then continuing to stick with those things. Once we find some areas of success. But they're great questions, Speaker 1.

Stacia Garr:
Anybody else have questions? I know we've got some other folks on the line who haven't spoken up, want to make sure we give you an opportunity or you can put things in chat too, if you are in a non-talking mood or you know, for whatever reason. All right Priyanka. Why don't we move on? What other questions did we get?

How can analytics be leveraged as part of DEIB Tech?

Priyanka Mehrotra:
Yeah, so I was going to say it almost sounded like a perfect segue to our next question, which is about leveraging analytics as part of DEIB teck and how that can be done.

Stacia Garr:
Oh, well, I feel like I've kind of gave an answer just now. So I'd love to hear, I mean, we've got a couple of folks from analytics vendors on here. So maybe I'd love to hear a little bit of your guys's you know, quick view of how you've seen folks leveraging analytics and most effectively. So Speaker 3, do you want to maybe lead off?

Speaker 3:
I am on mute. My, my little microphone button was not paying attention to me. The thing that we've seen kind of consistently is that that analytics has driven the strategy. Just to share a story of a large food manufacturer you work with. They'd had a diversity program underway on the hiring side of things for a really long time, but their representation wasn't moving. And it was when they engage with the analytics team. They're like, well, that's because we're hiring people and they're leaving as fast. And then they dug underneath the data to find out as a, why are people leaving so fast? I mean, I've had like an, a subsequent question around the tech. I see a lot of focus going into, Oh, diversity is a problem. We just gotta hire differently. It will be fine, which I think is a natural instinctive reaction.

Speaker 3:
I also don't think it works. So I always think of an organization as an ecosystem. One thing that's true about ecosystem, there are new levers, there are shapes and influences. So the analytics helps by understanding if I move this, what else moves? It's not, I'll move this and only this, cause it's not an engine, it's an ecosystem. If I move this, what else moves do I end up with more exits? Do I end up with mobility? And so, you know, I think the analytics helps by really understanding where are the two or three places to Speaker 1's point? Like where do you put the technology and the dollars to actually move the needle? And that's, that's what we're seeing. And again, we've got a number of customer stories that are, they're doing some good stuff on that. That's, that's our perspective.

Stacia Garr:
Thanks Speaker 3. Anyone else have any other any other thoughts they want to share?

Speaker 4:
Hi, this is Speaker 4. Just a quick question, I guess, to the group. I recently read a report that I thought was really interesting. I've had a lot of conversations with clients about diversity equity inclusion, and oftentimes it's focused on hiring, Oh, we just need to hire more people. And that's probably the hardest way to move the needle. And recently saw a report that talks about internal labor market analysis. So to your point, Ian, looking at the impact that you will have from all three things, so hiring promotion and then, you know, retaining folks as well. Just curious if that's been a part of the conversation. So first doing the analysis of are you hemorrhaging people, are you promoting people and what's the effect there, and then also the impact of hiring so that companies are looking at it across the board, as they seek to have a more diversified workforce, how they're actually going to accomplish that. I feel like technology allows, you know, more companies to kind of pinpoint on each one of those things. And trust me, I understand that within my work, that information lives in four to five different systems. And that's usually the problem that none of these systems talk to each other. But just curious to hear from you all, if, if you've seen that come up now more than often than before?

Stacia Garr:
Yeah. I'll take a first whack and then let others jump in. So I think so as Priyanka had mentioned a little bit ago, the top success measure that we're hearing folks hold vendors accountable to now is inclusion. Whereas two years ago it was the hiring to the diversity of the talent pipeline. And I think that that's a, a reflection, two things. So one is to your point, that recognition and Speaker 3's point as well, that you can't only hire your way out of this problem. You have to actually be able to retain people. And, and that means that you need to be focusing on inclusion. The second thing is I think that with everything that happened in 2020, one, we saw a lot of organizations obviously pull back on hiring. And so it wouldn't have made sense for hiring to be in the pipeline to be the metric that folks were focusing on.

Stacia Garr:
And then too, with the social justice movements, I think the awareness that inclusion was not working for everyone in the way that maybe people thought it was a heightened people's awareness that they needed to be focusing on inclusion. So I think that we're seeing that shift. The question is though, and Priyanka also mentioned this, is how do you measure inclusion? You know, you mentioned internal talent markets, is…you know, people's or access to some of those opportunities and their ability to move within an organization, a measure of inclusion, potentially. You know, there is people's perception of their inclusion as measured by and engaged, you know, maybe on an engagement store or dedicated inclusion and belonging study. Yes. You know, so, I think that right now there's this grand exploration of all the different ways we might measure inclusion and think about holding ourselves accountable for it. And there's certainly no one definition of what it is, but there is a heightened awareness over two years ago, for sure that we need to be focused there. How about others?

Speaker 4:
It's a really interesting perspective because I do, I definitely agree, but working with clients, I'm hearing them talk about inclusion from the perspective of what's happening within our organization and less so as they're thinking about talent acquisition. And so trying to understand how we move the needle to get clients, to think about this from a technology standpoint, from an analytics, because I feel like that's the most positive impact that we can have. To say it's not necessarily for them, it still isn't necessarily about inclusion. It's how does the diversity landscape within the organization, how does our diverse workforce mean that we're actually hitting a marker? So for example, let's say that Dell has a 2030 initiative where they want to hire 40%. They want their workforce to be 40% women in senior leadership. That's still the kind of data points that you're seeing out in the sphere.

Speaker 4:
And so while they're having conversations about inclusion from a workforce perspective, there is still this idea of how do we diversify our workforce. And I feel like, yes, it's hiring, but it's also promotion. And it's also, what's the experience that's happening within your organization. So people aren't leaving because what I'm also hearing from a lot of clients is that their diverse workforce is leaving in droves. And as they are going through the talent acquisition process, they're having more diverse candidates decide to not move forward with the process. So in one case, a client said it's now 50% of their diverse candidates that are declining an offer at that stage.

Speaker 4:
I feel like the analytics is a part of it because I feel like there is a piece of not understanding what's happening in your organization. That then feeds the top of the funnel. Because if you understand how things aren't working for your people, then the way that you're talking to new audiences and how you're adjusting the culture of your organization, not just from a diversity perspective, but the entire culture then begins to shift and I'll get off my soap box.

Stacia Garr:
It's great. It's great. Yeah. I mean, I think that for the most progressive organizations from a DEI perspective I think they've figured this out. So in my head I'm thinking of like a General Mills, right? Like General Mills is kind of an, it isn't a non traditionally diverse location. But they've been focused on diversity for years and years and years. And it is part of their conversation when they're having people go through the interview process and then when they're onboarding new candidates, it's just kind of in, in the water, if you will. And so, you know, the folks like, General Mills understand this connection. I think that you're talking about, you know, we actually have to have an inclusive environment and we have to go talk about it to our candidates.

Stacia Garr:
And that has to be part of why they may want to join. I think, you know they are definitely in kind of the top level of maturity when it comes to this. And so I think that we're starting to see an awareness as I said, of, of the importance of inclusion broadly, I think that we're probably talking about the top 20%, 25% who are making that connection between, okay, we actually now have a much more inclusive culture. We at least can talk about inclusion in our culture in a meaningful way and tie that back to talent acquisition. So that would be my observation is, you know, we're still talking about probably 75% of companies who are not doing it, what do others think or have seen.

Speaker 4:
I have a couple of stories from clients are doing exactly what Speaker 4 is talking about. Again, it was driven by the same notion that Dell is putting out a number that, you know, they're making a public statement to Speaker 1's point around what's different now is that people are having to be transparent about their progress and then sort of validated on that progress. So, you know, the driver was, if we're going to put out a number, how do we know we're going to get there? So they looked at the internal path. They recognized that their representation overall was good, but it was not at managing, you know, supervisor managerial director levels. And so the very first decision they took was actually to change the opportunity for progress inside the business, before they look to do anything external, they recognize that if people coming in we're not seeing team lead supervisors that represented them, that was not likely to be a successful strategy. So they've actually chosen to change. And this is, this was three different organizations I talked to, they, they all focused on that internal mobility aspect first because they saw what was going on in their data. So I actually think there's, you know, potentially a very, very interesting study on like, how do you move the needle?

Stacia Garr:
That'll be after DEIB and analytics. Does anybody else have any questions on this one?

Speaker 5:
I do have a question around, have you done any work on sort of mapping the maturity of organizations, so on the client side, in terms of where they are on that journey and does it influence the type of vendors they're choosing, whether it's those that have got kind of completely focused on DEIB or those that have just got their established elsewhere in their organization, but have features and functionality?

Stacia Garr:
Hmm, that's a great question. We have not, when I was at Berson, I ran a big study on DNI maturity when we did a big maturity model. And did all of the things that you're supposed to do in terms of, you know, testing the impact on financial results in the like. What was kind of interesting at that time though, was that actually was the beginning of my interest in DNI tech, because when I asked people what tech they were using, they're like do you mean e-learning, it's like, no, that's not what I'm talking about. But so at that point, we certainly didn't see it. And I haven't run another maturity study to look at this, but I would say that, and this is just completely off the cuff. So excuse me, be the messiness of the thoughts, but I think that when we first see organizations looking into this, it's often a point solution.

Stacia Garr:
So, for instance, Textio is a, is a good example because it's a very clear use case. It's clear who the owner is. It's a, you know, a recruiter, a talent acquisition organization. Okay. We're going to fix our job descriptions. Okay, this is something we can pretty easily get our head around it's well scoped, etc. I would say that organizations who are newer to this space are more likely to buy something like that because it's very clear and the business case is clear. I think that the more sophisticated organizations, they're probably using that, and they're also, you know, looking at the more sophisticated beginning their, their analytics journey. So they may be looking at some of the more sophisticated analytics tools, like, like a Visier. But you know, they may not be doing some of the more sophisticated analytics.

Stacia Garr:
I think that then assuming that they've been able to use that technology to identify where their real challenges are, then we'll start to see kind of a more nuanced and sophisticated buyer of some of the other technologies. So they might be looking at you know, some things like organizational network analysis. So how are, you know, different populations connected within the organization, and how does that reflect inclusion? So you can kind of see how they would build in terms of their understanding and their willingness to go into some of the more nuanced aspects of the tech and what it can do. That's again, just kind of off the cuff of my thinking on what we would see. But I'm certainly curious to hear what others would think.

Priyanka Mehrotra:
I think maybe I can just add something to that point, is that one of the questions that we did ask in our survey of the vendors was, what is your customer organization size. And what we typically have tended to see, I don't have the numbers here, but I can share it with you later, is that more majority of our vendors reported customers who were smaller, had small number of employees. So under a thousand, I wanna say, so it doesn't necessarily reflect the majority, but of course, I think what it does show is maybe that smaller organizations are more open and willing to try these technologies for DEIB purposes than maybe more established and enterprise size organizations. So that might be something helpful.

Stacia Garr:
Yeah. But I think what's interesting about that. Priyanka is, is we saw an increase in what was it, the organizations that were five to 10,000 over a couple of years ago. And so I think that we're seeing an increase, in certainly size and I think that it reflects the maturity of the solutions and probably a maturity of some of these organizations as well.

Speaker 1:
Would you mind if I ask a related question? Obviously sitting here in the UK I have a little bit of a sort of restricted view generally from effort by country, you know, what are the markets that really adopting this? I get a sense. So US are significant adopters, as well as the UK. Are there other hotspots around the globe where certain markets are really gravitating towards deploying these types of technologies?

Stacia Garr:
Yeah. So I definitely say Canada Australia, New Zealand as well I would say Northern Europe. So Speaker 2 was here from, from Benelux. We're seeing, focus there. I'm just trying to think here.

Speaker 1:
That's a fairly typical pattern actually, isn't it. When we think about technology adoption, Scandinavian countries, Benelux countries, UK, US, and Australia is fairly typical. Okay, thank you.

Stacia Garr:
Yeah, I will say though, when we did a DEIB strategy report in one thing I was surprised in that research was the extent to which some Asian countries have been focused here. So you know, that is an area where I think that there is potential to their concerns are different. But there was more traction there than I would've guessed. Just kind of thinking about it without having done the research.

Stacia Garr:
I see, we've got just a couple of couple minutes left. Any other questions on this one? And Priyanka, do we have another question?

Priyanka Mehrotra:
Yeah, actually we did receive an interesting one. This is the final one.

Stacia Garr:

Okay.

Stand alone solution vs add-on to an existing HR Tech platform?

Priyanka Mehrotra:
So is it better to integrate a standalone solution with others, such as learning, ATS, etc. or find an add-on to an existing HR tech platform?

Stacia Garr:
We had the answer to this one. We could just call it a day and be all good.

Priyanka Mehrotra:
My instinct as a researcher is to say it depends.

Stacia Garr:
Yup. I agree. So do you want to give your thoughts Priyanka and then I can add on?

Priyanka Mehrotra:
Yeah, I think like touching on what I had said earlier, you know, you already may have DEIB technology in solutions that you're using for something else. So it very well depends on what your use cases, what are the challenges that you're specifically looking to solve for? And what technologies already exist in your ecosystem. So if you're a Workday user, you already have that in your organization, it probably makes sense to go ahead and use their DEIB features and capabilities similarly with ADP. So I think versus like, if you have something very specific, it was just like, we've been talking more Texio for a bit. If that's something that you need to add to your recruiting efforts, then you need to look at a point solution that meets those very, very specific niche needs that your organization might have. What do you think Stacia?

Stacia Garr:
Yeah, no, I completely agree. I think it just depends on where you are. And the other thing is you also may try something and find that it doesn't work. You know, you may try the, the Workday solution and find that that's not meeting your needs, and then you go and you find something else. So I think it just kinda depends on what those needs are and what you have available and the extent to which it meets,

Speaker 2:
If I may, I don't know how the situation is west, but here it looks, we don't even document more than gender. So I have these organizations now asking whether we can map, you know, all the different dimensions, necessity, sexual orientation, religion, etc., outside of an HCM, also due to GDPR issues. Because in the existing solutions, the best you get is a binary gender indication, even just binary. So there is nothing about the gender spectrum or whatever. So there is clearly a need, but I see organizations really being puzzled with finding solutions on how to satisfy the needs, because they were assuming that they had the data, but actually they don't

Stacia Garr:
Yeah, I think what we tend to see here in the US is, is folks asking for voluntarily, and if it's voluntarily given, then then being able to include it. But to be honest, I think that this is an area I need to understand more for, for GDPR, because I don't actually, I mean, to me, my gut, when I hear about mapping outside of the HRS, it's like, Ooh, I'm not sure, but I think that that is completely rooted in gut. Does anybody else know kind of about the legal implications of that?

Speaker 4:
Wherever you're, if you're holding it, you're holding it. It's like, if you're the owner, you're the owner a hundred GDPR, that's more a case of what's your standing relative to the data. So if, if you can't, you'd have to, yeah. You can't really hand off that to a third party and say like, Oh, we're no longer the owner that third party is acting as an owner for you. You would, you would have to, like, I don't really see loopholes in terms of a business not being designated the owner of that data, if it's about their people. What I have seen some people do is try and do aggregation. So it's not a record on the employee. It's a, it's a extrapolation from the data. So we get a percentage, female, a percentage of race, but I'm not putting female against this specific employee. So I'm not, it's not on the person, therefore you're not got that same level of liability for it. But it's awkward. It's just awkward. And then typically your right Speaker 2, typically in Europe they don't track race and ethnicity for many, many strong reasons, which is different in the US. In the US you have to categorize somebody into five different standardized buckets of, of race for EOC reporting. So there's actually really different reporting frameworks in both places.

Stacia Garr:
Cool. Well, I see we are at time. So I want to just say thank you all for a robust discussion. Really appreciate everybody's participation and thoughts, and obviously, you know, this is area, that we're continuing to research and to work on. And so, you know, if you have other areas of interest or things that you think, Hey, this is something that, that is really I'm hearing a lot from my clients or my customers, or whereas just top of mind for us as an organization we definitely would love to hear about it. So you can drop me an emali at [email protected] or Priyanka, just Priyanka at the same place, or if you can't remember either of those [email protected]. And and we would love to hear from you. So with that gonna say, thank you so much. And until the next time that we all come together, we hope that you do well and stay safe.

 

Events of 2020 – COVID-19, a social justice movement, and multiple natural disasters – have created a business imperative for orgs to address and rethink their orgs’ DEIB practices. Leaders looking to design a holistic DEIB approach for their orgs should focus on 6 key areas, one of which is technology.

Over the last few years, technology has grown and matured to meet the needs of the orgs by adding capabilities that specifically address DEIB and help customers solve their primary challenges. This infographic summarizes our report DEIB Tech: A Market Maturing To Meet The Moment.

Click on the image below to get the full infographic. As always, we would love your feedback, which you can provide in the comments section below the infographic.

DEIB Tech: Its Time Has Come

Global pandemic. Protests. Elections. Riots. (And whatever else happens between when we publish this article and you read it.)

Needless to say, the last year has been rough. It laid bare our differences in stark relief. Showed how events impact diverse people differently. Perhaps it caused you some measure of disgust, despair, or even depression. At a minimum, it likely contributed to exhaustion.

But, at the same time, the last year has also revealed our underlying humanity. The extent to which we care about other people. The depth at which we hold our beliefs about our country. The potential we have when we work together (hello, COVID-19 vaccine!).

Given all this, there's never been a greater need for a focus on diversity, equity, inclusion, and belonging (DEIB)—both in our society and in our organizations. We have a need to understand each other and to work together, more than ever before.

Organizations throughout the world have recognized this, from top leaders to DEIB leaders to managers and employees. It’s for this reason companies are talking about DEIB more in their earnings reports than ever before (see Figure 1¹) and why the number of DEIB job openings has skyrocketed (see Figure 2²).

The thing is this: Organizations can't just talk about DEIB and hire people to lead it. That's a good start, but it’s not enough. Organizations need to change their systems, practices, and behaviors. The change cannot just rely on individuals—it has to be baked into how the organization operates.

This is where DEIB technology can help, as it has the potential to build in practices, behaviors, insights, and recommendations that address bias. It can also provide insights about what is actually happening with people (versus relying on anecdote-based understanding) at the moment of critical decision-making about talent.

DEIB tech is no longer a brand new market—but still many have not heard of it. With that in mind, let’s do a quick review of where this market came from and why it's now ready to meet this moment.

Tripping down memory lane

When we first began studying the D&I tech market in 2018, the #MeToo movement had thrust diversity and inclusion in the workspace under a spotlight. Stories and accounts of workplace discrimination, harassment, and unethical behaviors toward women in the workplace led numerous businesses to pledge to change their policies and take action.³ As a result, organizations began to feel a greater need for systemwide solutions.

In 2018, we launched our first research study on this topic, and we published a comprehensive report, Diversity & Inclusion Technology: The Rise of a Transformative Market, in February 2019. The study included a list of all the D&I vendors (105) we identified and was accompanied by a detailed vendor landscape tool (with 2 updates since). As we shared in our initial report, tech can play a transformative role.

Today, we’ve expanded the topic’s breadth to now span diversity, equity, inclusion, and belonging—increasing our coverage to 196 vendors (and counting!). And while we cover the market trends and changes extensively in this report, the complete list of all the vendors and the details around their capabilities are included in our online tool.

We believed in 2019 that tech may be the missing link which—along with a combination of strategies, goals, practices, policies, and behaviors—could bring about systemic changes for DEIB.

Fast forward to today

We (still) find ourselves in the midst of health, social, and economic crises. 2020 was not an easy year for anyone, but it especially impacted diverse people in many significant ways, including:

• Women left the workforce in record numbers
• Lower-income earners saw their jobs evaporate
• The murders of George Floyd, Breonna Taylor, and others disproportionately impacted the Black community

The rise of the Black Lives Matter (#BLM) movement in the U.S. and around the world has forced people to pay greater attention to issues surrounding racial diversity, equity, inclusion, and belonging. As a result, businesses are increasingly expected to take a stand on social justice issues, remain true to their values, and treat their workforce in an equitable manner.⁴

Many companies have responded by making pledges or promises in support of the #BLM movement.⁵  A large number of them have focused on increasing diversity levels within the companies, both at the employee and leadership levels (for examples of such corporate pledges, see Diversity, Equity, Inclusion & Belonging: Creating a Holistic Approach for 2021).

As the pressure to follow through on these promises increases, leaders must develop strategies to achieve them—and we believe that DEIB tech represents one of the critical components of the process (see Figure 3 further down). Sophisticated tech—such as artificial intelligence (AI), deep machine learning, natural language processing (NLP), and organizational network analysis (ONA)—can help leaders manage DEIB better and more easily, and are increasingly becoming more accepted as essential tools for people practices.⁶

Orgs that are serious about implementing systemic change and seeking to achieve a lasting impact should look to DEIB tech for capabilities that enable them.

Specifically, DEIB tech can help:

• Improve the org’s understanding of and complexities surrounding DEIB
• Promote objective decision-making
• Flag and mitigate bias
• Ensure equal access to opportunities for all within the org
• Create transparency and accountability
• Scale DEIB efforts throughout the org

We believe that leaders must have a clear understanding of the DEIB tech available (internally and externally), and how it can help them achieve their business’s goals.

Through this report, we aim to achieve 4 things:

1. Help leaders understand the role of DEIB tech
2. Provide insights on the state of the DEIB tech market
3. Highlight the talent areas focused on by vendors
4. Guide leaders who may be looking to make tech investments

Key Findings

1. 3 major shifts punctuate the current DEIB tech market. To start, in 2017-2018, when the #MeToo movement was at its height, leaders were especially focused on gender; in 2020-21, the emphasis has evolved to include a focus on race and ethnicity. Next, and as a result of the first shift, the social justice movements and conversations around discriminatory workplace policies and behaviors have led to greater attention to inclusion than ever before. Finally, the role and impact of AI on mitigating bias to enhance DEIB has come front and center, and is being more readily addressed.
2. The broader HR tech world is responding to these market shifts. The number of HR tech vendors offering features or functionalities that cater to DEIB as part of their solutions has increased by 136% since 2019. We believe this reflects a growing need among organizations for HR tech solutions that incorporate a DEIB lens into all areas of talent.
3. The DEIB tech market is hotter than ever. The total number of vendors in the market increased by 87% as we identified a total of 196 vendors in the market for 2021, as compared with the 105 that we included in our research in 2019. The overall market size is $313 million, having grown at a CAGR of 59% since our last study in 2019.
4. People analytics for DEIB has arrived. Lack of analytics and insights on DEIB is the primary challenge that the majority of vendors are helping their customers solve for. Data and analytics are becoming more important for DEIB as organizations measure and track their efforts.⁷ As a result, a number of solutions providing DEIB analytics capabilities is growing (28% in 2021 vs 26% in 2019).
5. Smaller organizations and knowledge industries remain the main customers of DEIB tech. The largest customer category is small organizations (those with fewer than 1,000 employees), who represent almost 30% of all DEIB vendor customers. However, these small organizations represent a smaller percentage of DEIB vendor customers in 2021 than in 2019, and there was an increase in the percentage of customer organizations in the 10,000-50,000 employee range. As companies recover from the events of 2020, we expect to see orgs of all sizes increase their use of DEIB tech.

DEIB Tech: So Critical Now

Before we dive into the latest about DEIB tech, we need to establish a foundation here for some of the terms and concepts we use. We also offer a brief explanation of why DEIB tech is important to your organization.

Let’s take a step back and define our overall terms. Readers of our previous report will notice that we’ve evolved our terminology from “diversity and inclusion” (D&I) to “diversity, equity, inclusion, and belonging” (DEIB). The events of 2020 resulted in a focus on conversations around the workplace experiences of diverse and underrepresented people.

Specifically, they shed light on the uneven playing field that many individuals are faced with, as well as how it impacts their sense of belonging and being part of an organization. Due to this, we’ve seen a rise among both orgs and vendors that consider equity and belonging as part of their holistic understanding of this issue, and are including them as part of their programs and offerings.

What is DEIB?

Figure 3 features our definitions for the DEIB abbreviation—diversity, equity, inclusion, and belonging.

Now that we’ve defined the terms, it’s time to understand why DEIB is so important.

The great divide: Why is DEIB important NOW?

The events of 2020 have resulted in a sense of urgency and accelerated conversations about DEIB. And we’re seeing an unprecedented and greater willingness among leaders to engage and push for change. So, while cultural injustices have happened throughout our global history, why does there seem to be a greater push to change things now?

A key factor: Underrepresented people have been impacted disproportionately by the health and economic crises brought about by COVID-19—inequalities that have shined a discriminating spotlight on the many differences that continue to exist in our social structures.

For example: Job losses hit Black workers in far greater numbers than for Whites. Both Black men and women saw their unemployment rates go up to more than 16%, while White men saw theirs rise to a comparatively lower number of 12.8%, in April 2020.⁸ This gap didn’t improve once businesses reopened and companies began rehiring later in the year. While by August the unemployment rate for White workers was down to 7%, for Black workers it was much higher at 13% and the gap even larger.⁹

Additionally, as a result of the events of summer 2020, #BLM movement, and the following protests, many employees found themselves navigating difficult conversations around these issues at the workplace. Leaders, on their end, found themselves facing greater expectations to provide “safe spaces” for employees to do that, and have more open and honest discussions with them.¹⁰

Companies are under increasing pressure today to act on issues around discrimination and systemic racism. Leaders must seize this opportunity to make good on their claims and enable meaningful change to happen. And designing an overall approach to DEIB is a really good place to start.

Leveraging DEIB tech as part of an overall approach

Given the heightening expectations of DEIB that orgs are facing, leaders need to design a holistic approach to DEIB which includes all people practices and impacts all stakeholders. As we learned in our recent research,¹¹ when designing their new DEIB approach, orgs must do 6 key things:

1. Clarify their purpose or reason for doing it
2. Establish goals
3. Develop a strategy to meet those goals
4. Identify critical levers and activities that impact those goals
5. Leverage technology
6. Use data, analytics, and metrics to embed accountability and transparency

Technology forms a core part of a holistic DEIB approach. The next section explores what DEIB tech can offer. For more details on the other components of a holistic DEIB approach, please refer to our report, Diversity, Equity, Inclusion & Belonging: Creating A Holistic Approach For 2021.

What is DEIB tech?

When we talk about DEIB tech, we’re referring to …

… Enterprise software that provides insights, or alters processes or practices, at the individual or organizational level, in support of an organization’s efforts to become more diverse, equitable, and inclusive, and to enable belonging.

For the purpose of our ongoing research, we focus on tech that impacts decisions related to people. While there are other types of technology, such as those focusing on accessibility for people with a range of abilities and disabilities, these aren’t covered in our report as they don’t impact people decisions directly.

When we think about DEIB tech, we identify 3 types of vendors:

• DEIB focus vendors. The primary business for these vendors is helping orgs address their DEIB challenges. An example: a vendor whose product focuses only on reducing unconscious bias during hiring.
• DEIB feature vendors. These offer features or functionalities that cater specifically to DEIB needs, but their primary business focus includes more than DEIB. An example: a recruiting software vendor whose product can make all resume names / identifying info “blind” to minimize unconscious bias.
• DEIB friendly vendors. While these vendors neither address DEIB as their primary focus nor market themselves specifically as doing so, their included features or functionalities could positively impact such efforts in organizations. An example: a recruiting software vendor using AI to recommend appropriate candidates to hiring managers.

Essentially, DEIB tech should impact people decisions in a manner that helps orgs meet their DEIB goals. It should help transform fundamental and structural qualities of the systems that are in place in order to bring about lasting change. The key point here is that it must help drive systemic change in the organizations.

DEIB tech must impact people decisions by transforming fundamental and structural qualities of the systems in place in order to drive systemic change in the organization.

Some of the ways DEIB tech can do this is by:

• Uncovering existing policies, practices, and programs that may be biased, discriminatory (in reality, if not in design), or in conflict with the company strategy, and which need to be changed
• Identifying existing gaps between goals and the actions taken to meet them
• Measuring and tracking progress toward those goals
• Analyzing data and information for greater insights, and identifying areas of interest
• Making recommendations on next steps
• Scaling these efforts and the impact of these activities for the benefit of the entire organization

Now that we’ve covered the fundamentals around what DEIB tech is and why it’s important for orgs, let’s dive into this market.

State Of The DEIB TECH Market

Since we published our first report on the DEIB market, we’ve published 2 additional updates (here and here) that feature several new vendors as well as our overview on the market itself. In addition, regular conversations with vendors and users of these technologies allow us to keep a pulse on the DEIB tech market changes over time.

Four ongoing trends caught our attention and results from our recent vendor survey confirmed these findings. Overall, the DEIB tech market is:

1. Experiencing 3 big shifts in its approach to DEIB
2. Hot and growing with more vendors offering DEIB capabilities than ever before
3. Largely comprised of customers from small orgs and knowledge sector industries
4. Getting serious about analytics

Let’s examine these market trends in more detail.

3 big shifts

Our research and conversations reveal that the events of 2020 significantly impacted how organizations are thinking and approaching DEIB. Specifically, we find the following 3 big shifts that play a role in this market’s evolution:

1. Focus shift from gender to race
2. Stronger spotlight on inclusion
3. Impact and role of AI at the forefront

Focus shift from gender to race

The #MeToo movement in 2017-2018 brought conversations about sexual harassment and gender discrimination in the workplace under a spotlight. Similarly, the twin crises of COVID-19 and the social justice movements in 2020 highlighted discussions about workplace discrimination—with the focus now shifted from gender to race. The events of 2020 have had a disproportionately greater impact on diverse and underrepresented people. And, as conversations around DEIB have increased and demanded attention, there’s more emphasis around the issue of ending systemic racism.

Our interviews with DEIB leaders revealed a greater openness among orgs to have honest conversations about race than ever before: To a large extent, this is due to the expectations that people have. Eighty percent of the U.S. population want brands to help solve society’s problems, while 71% trust their employer to do what’s right on systemic racism and racial injustice.¹²

DEIB tech providers also noticed this shift. Our findings revealed that vendors:

• Added specific questions regarding race in their surveys and analytics
• Offer resources that cover issues about racial injustice
• Provide capabilities that allow users to measure and compare employee experiences through a race lens

A stronger spotlight on inclusion

As we mention in our report Diversity, Equity, Inclusion & Belonging: Creating A Holistic Approach For 2021, our research showed that the pandemic and #BLM movement led to an expansion of DEIB efforts by orgs. In particular, remote work, the disproportional effect of COVID-19 on certain populations, and uneven caregiving responsibilities all threatened to disrupt ongoing efforts to keep employees engaged and connected. Many organizations evolved their efforts to meet those challenges: Some revisited their policies and practices around employee lifecycles and updated them to meet these changing needs.

One such example comes from Ph.Creative, a brand agency that updated its strategy to better focus on inclusion.

Solution providers, too, have noticed this growing focus and are responding to it. For example, we’ve seen a significant rise in the number of vendors focused on employee engagement and development (43% in 2021 vs 31% in 2019). These activities, including employee experience, learning, career management, and wellbeing, drive and impact inclusion. Several vendors we spoke with shared that they’re offering products to help customers:

• Check the overall employee pulse and wellbeing
• Ensure continued engagement even in remote environments
• Enable flexibility to meet the differing needs of their workforce

Economic uncertainty caused by the pandemic also impacted this market. Budget cuts and low spending meant that talent acquisition (TA), and as a result diversity hiring, didn’t receive as much focus as it has in recent years. Organizations became more focused on retaining their existing workforce by ensuring they remain safe, engaged, and connected.

Finally, the racial injustice movements and conversations brought to the forefront that Black employees don’t feel a sense of inclusion or belonging at the workplace.¹³ People in general are more aware of a racial divide now as a result of the events of 2020: This has been instrumental in orgs realizing that they need to do more to ensure their diverse employees feel included.

Impact & role of AI at the forefront of DEIB

As the impact  and role of AI on DEIB has increasingly made news over the past few years,¹⁴ users as well as solution providers have been working to better understand the problems and address the resultant issues.

AI: The impact

While AI can identify and ferret out instances of existing bias in current systems and policies, it can also perpetuate it, for example, in job descriptions, hiring or promotion practices, or workplace communications. A main reason why: The data used to train algorithms is biased to begin with and, without correction, the algorithms simply replicate those biases. This can be due to such algorithms having been trained on a data sample that’s based on an over- or underrepresented population—thereby rewarding or penalizing other groups.

While AI can identify and ferret out instances of existing bias in current systems and policies, it can also perpetuate it.

Another big reason: The training data contains human biases and inequities reflective of those who created it. As a result, technology developers are increasingly adapting approaches that ensure the training data used for machine learning algorithms is free from human bias through stress testing and experimentation.¹⁵

AI: The role

While the impact of using biased algorithms has become clear, the role AI can play to mitigate existing biases has also received greater attention. The key point for users: The technology is used for the right problem and not seen as a cure-all.

For example, an AI interviewing software would be of little help to an org looking to increase its diverse candidate hiring if very few diverse candidates have been applying for roles to begin with. In this instance, the organization should consider why diverse candidates aren’t applying. It might be a sourcing problem. It might be a job description problem. It might be an employer brand problem. (There are tech solutions for all those problems.) Whatever the problem is, the AI interviewing software won’t help. The algorithm must be directed at the right problem.

In sum: 3 big shifts

These 3 shifts together can propose what may come as the DEIB tech market matures. They also offer hope that the words and pledges made by orgs in 2021 will be followed by respective actions as the understanding and focus around these 3 issues grow.

DEIB market growth

The market grew in 2 important ways in the last few years: both the number of vendors and market size as measured by revenue increased.

DEIB growth: Vendors

The overall number of vendors in the market (as identified by us) increased from 105 in 2019 to 196 in 2021. That’s an increase of 87%.

At first glance, you might think this increase may be due to the addition of new vendors. In fact, our research revealed, however, that many established vendors, not previously offering any DEIB functionality, have added new features / functionalities that customers can now use specifically for DEIB purposes. When we compared the total number of DEIB feature vendors in 2021 vs 2019, we saw an increase of 136%.

Our research revealed that 40% of vendors fall under our DEIB feature category in 2021, as compared with 30% in 2019. DEIB friendly vendors comprise a smaller percentage of the market than they did in 2019, while the percentage of DEIB focus vendors remained mostly unchanged at 32% (see Figure 7).

As shown in Figure 7, we believe these changes are a reflection of 2 interrelated developments.

• In the last few years, a large number of DEIB friendly vendors added or developed features that cater more specifically to DEIB needs—thus, they’re now counted as DEIB feature vendors.
• New vendors are finding more value in offering solutions with a DEIB lens embedded in their talent areas of focus, rather than only addressing specific DEIB challenges (i.e., an ONA or learning solution that’s able to provide insights on employee networks or learning, respectively, which can be broken down and analyzed by gender and race).

DEIB growth: Market

While many industries suffered setbacks with investments and contracts on hold during the pandemic, the DEIB tech market grew considerably. We had initially estimated the overall market size to be $100 million in 2018. However, our research this year turned up even more vendors that existed in 2018, so we have revised our 2018 overall market size to $124 million (see Figure 8). 

We estimate the overall market size to be $313 million, with a 2-year CAGR of 59% (and a 4-year CAGR of 82%) for the overall market. This growth is commendable, given 2020 was a year when almost all orgs looked to limit their spending and avoid unnecessary new investments.

We estimate the overall market size for DEIB technology market to be $313 million, with a 2-year CAGR of 59%.

Much of this growth was driven by the renewed calls for commitments to DEIB, once the #BLM movement gained momentum in the latter half of 2020. Given that we expect internal and external stakeholders to increasingly demand that orgs “walk the talk” in 2021, we expect demand (and thus market growth) to remain strong in the near future.

Customers of DEIB tech

When we looked at the customers of DEIB tech, two main findings caught our attention.

1. In general, small businesses comprise a greater percentage of DEIB tech than large orgs
2. Customers from technology, financial, and healthcare / life science industries have increased

Customer size

A real opportunity exists for the largest organizations to leverage DEIB tech. When we calculate the mean for customer sizes, we find that almost 30% of DEIB tech customers are small orgs with less than 1,000 employees. This is a lower number than in 2019 (see Figure 9) and likely represents a maturing of the market, since we see vendors increasingly selling to larger enterprises, notably organizations in the 10,000-50,000 employee range. That said, for the largest organizations—those with more than 50,000 employees—we haven't seen any notable movement in the percentage of them becoming DEIB customers.

This relatively low level of subscription to these technologies represents a real opportunity for the largest organizations because, as our research indicates, they're the ones which can use the help most, for 2 reasons:

1. Trust in large orgs is low. This is especially telling when compared with small businesses. A September 2020 Edelman study found that 43% of Americans trust large corporations to do the right thing in responding to issues of systemic racism and racial justice, as compared with 62% trusting small businesses. Corporations, in general, are believed to care less for their employees and share too little of their success with them.¹⁶ In addition, several recent instances of employers monitoring or tracking employee activity without their knowledge have appeared in the media.¹⁷ Employee fears of privacy invasion became more serious once the majority of the workforce shifted to remote work during the pandemic.¹⁸
2. High expectations exist for large orgs to do the right thing and take meaningful actions on DEIB. Seventy-seven percent of Americans state that it’s deeply important for companies to respond to racial injustice to earn or keep their trust.¹⁹ And while words matter, actions that lead to change matter even more. This was made clear when several leaders of large corporations received criticisms and backlash from consumers and media for their public stances in support of the #BLM movement: People saw them as stating empty words and pointed out the leaders’ failures to address discrimination within their own companies.

As the largest organizations look to put real money in 2021 behind the statements they made during #BLM, we expect to see them turn to tech more to help them address the systemic challenges they have with DEIB.

Industries

When we look at DEIB customers by industry, as expected, we see that technology and financial services / banking / insurance comprise an even larger portion of DEIB tech customers than they did in 2019 (see Figure 11). Also, customers from healthcare, pharmaceuticals, life science, and chemical industries increased by almost 3%. Although this may not seem like much, our conversations with vendors revealed a growing interest from these 4 industries.

Again, we believe the COVID-19 crisis played a role as it highlighted the need for organizations to support underrepresented and diverse groups, which comprise a significant percentage of healthcare workers.²⁰

Customers from the knowledge sector, including technology, financial, banking, and insurance industries, grew by almost 10% for each of them. This isn't too surprising as the technology industry tends to be more open to using tech to solve challenges. Also, given that the technology industry has been under the spotlight for its lack of progress when it comes to diversity in the recent years,^21,22 this is a welcome sign. Although DEIB tech is not a silver bullet, combined with a comprehensive strategy and practical goals, it can help enable continuous positive change.

Analytics takes centerstage

“ turn data into information, and information
into insight.”²³

This phrase is certainly gaining traction in the DEIB tech market. Over the past 2 years, we’ve noticed a growing emphasis on using analytics and insights to understand DEIB—and our survey findings confirm this. Fifty-two percent of vendors listed it as the primary challenge their solutions are helping customers solve in 2021, as compared with 33% in 2019 (see Figure 12).

52% of vendors listed analytics as the primary challenge their solutions are helping customers solve in 2021 (as compared with 33% in 2019).

As we mentioned in our recent report, Diversity, Equity, Inclusion & Belonging: Creating A Holistic Approach For 2021, identifying, analyzing, and democratizing DEIB data is becoming a critical focus among forward-thinking organizations. Leaders are now trying to:

• Understand the experiences of diverse populations
• Identify and understand networks among different groups
• Analyze these data for deeper insights
• Build greater accountability

In response, DEIB tech vendors are also building on their capabilities to help orgs enact and scale these efforts. Twenty-eight percent of vendors cater to analytics as a talent management area in 2021, as compared with 26% in 2019.

This brings us to our next section on the different areas of talent management that vendors target.

Talent Areas Vendors Focused On

The talent areas served by DEIB tech vendors have shifted considerably during the last 2 years (see Figure 13). As you may notice, the distribution is more evenly spread across the 4 talent categories today than it was previously. The biggest difference: The percentage of solutions that focus on talent acquisition, which declined to 29% in 2021 from 43% in 2019.

We believe this shift is due to at least 2 reasons:

• A significant number of (both new and old) vendors focused just on employees have introduced features that enable them to serve DEIB needs—thus, now making them a DEIB “feature” vendor, whereas, before, they may not have been in the market at all.
• The economic uncertainty brought on by COVID-19 has resulted in much lower levels of hiring, potentially decreasing the number of vendors focusing on DEIB in talent acquisition.

Let’s look at each of these talent areas in more detail.

Talent acquisition

About 30% of the 196 vendors identified in our research focus on talent acquisition (TA). Of those, 25 participated in our survey, with 60% of them offering solutions that help customers with candidate sourcing and selection (see Figure 14).

Readers of our previous report will note that we broadened our TA category this year to include new subcategories for onboarding, employment branding, and labor market analysis. This is because we noticed a rise in new capabilities and products among several vendors. Each of these subcategories have within them several areas that solutions focus on. For example, vendors under candidate selection offer capabilities that help customers create blind assessments, match diverse candidates to job descriptions, and / or help reduce bias during the selection processes. Similarly, a solution helping customers with sourcing candidates can do so by accessing diverse pools or changing job descriptions to reduce bias.

While we haven’t listed all of the different types of capabilities that vendors offer under each TA subcategory, readers can access a complete list of all TA vendors and find which capabilities they offer through our DEIB tech tool.

One of the ways DEIB technology can help customers improve their candidate selection process is by helping them match candidates to job descriptions, as we illustrate with the following story.

Development / advancement

The number of solutions that target development / advancement as a talent category significantly increased from 19% in 2019 to 26% in 2021. We believe this growth is due to the changing needs of the orgs. As we mentioned earlier, due to the shift to remote work and a slowdown in hiring new talent, orgs have shifted their focus to developing their existing workforce.

The largest subcategories within this area are leadership development (LD) and learning (L&D). Of the survey participant vendors that target development / advancement, 50% of them focus on these 2 subcategories (see Figure 16). New subcategories in this area for our 2021 study include recognition, talent mobility, and compensation / total rewards.

A significant finding this year is the number solutions that focus on LD. Readers of our previous report may recall this: Even though a big diversity challenge was representation at different levels of leadership, we identified only 16% of tech solutions that targeted this particular subcategory. In 2021, that number rose to 26%.

One of the ways DEIB tech vendors help organizations enable LD is by providing insights on leaders’ behaviors. The ability to provide insights on leadership behaviors and communication patterns became especially crucial once the pandemic hit and employees began working remotely. An example from McKesson, a healthcare company, provides an example of how important such insights can be.

Solutions can help customers in many ways under the different subcategories in this talent area, including:

• Orgs looking for vendors that help with L&D will find such capabilities as delivering training within existing employee workflows, offering virtual reality training, and helping design civil conversations.
• Vendors focused on mentorship and career management offer capabilities, such as enabling diverse talent to search for mentors, providing networking opportunities, or personalized career pathing.

For a full list of vendors that focus on development / advancement and the capabilities they offer, please visit our DEIB tech tool.

Engagement / retention

Seventeen percent of all DEIB tech vendors focus on engagement / retention. Of the survey participants that target this talent area, 75% are currently focused on 3 subcategories: employee experience, employee engagement, and employee voice. By employee voice, we mean how an employee communicates or speaks to the organization. (See Figure 17.)

New subcategories in this year’s study include employee wellbeing and employee engagement. We added employee engagement so that we could differentiate between solutions that help customers understand the unique experiences of employees and perceptions versus those that help customers with initiatives to improve employees’ engagement levels with their work.

Some of the newest additions in this category include:

• Capabilities that focus on employee voice, by allowing anonymous reporting and confidential conversations around sexual harassment.
• Vendors focused on employee experience to help customers understand diverse groups’ work experiences and to ask questions to better understand employee inclusion.

For a full list of vendors that focus on engagement / retention and the capabilities they offer, please visit our DEIB tech tool.

Analytics

As we mentioned earlier, analytics is a growing focus among DEIB tech providers. Of the survey participants which selected analytics as a talent area of focus, 57% offer capabilities for analysis and monitoring of DEIB activities by conducting representation / KPI analyses, enabling pay equity analyses, assessing network inclusion, analyzing TA processes, and providing DEIB dashboards (see Figure 18).

Our survey also revealed that the number of solutions helping customers calculate the business case for D&I initiatives rose significantly to 30% in 2021 from 17% in 2019. This is most likely due to a growing need for DEIB leaders to quantify the impact of DEIB on business, and show the value of their initiatives and investments by tying them clearly to business outcomes.

The number of solutions that conduct ERG management and analysis also increased slightly to 13% in 2021 from 10% in 2019.

The number of solutions helping customers calculate the business case for D&I initiatives rose 13%, from 17% in 2019 to 30% in 2021.

For a full list of vendors that focus on analytics and the capabilities they offer, please visit our DEIB tech tool.

Moving forward, we expect that DEIB tech vendors will continue to improve their capabilities while also growing and developing new ones—to meet the unique and changing needs of the market. Buyers and potential investors need to be aware of these capabilities and use the success stories from other forward-thinking organizations to understand how to leverage these technologies for their own purposes. Additionally, other equally important considerations exist for you to keep in mind before investing in DEIB tech.

In our next section, we cover some of the crucial considerations that potential buyers should be aware of.

What Buyers Should Consider Before Investing

While it’s important to understand the market and the different talent areas of focus, leaders interested in DEIB tech must keep a few critical considerations in mind before making any investments:

• Be aware of the benefits and the risks of using DEIB tech
• Be clear about your own needs
• Audit existing in-house tech that can potentially be leveraged for DEIB purposes

Understand the benefits & risks of using DEIB tech

Organizations must be aware of both the benefits and risks associated with DEIB tech before purchasing it (see Figure 20).

Identify your organization’s needs

Once the benefits and risks are understood, DEIB leaders must reflect on their organization’s needs. As a DEIB leader, you can do this by:

• Understanding your organization’s DEIB journey
• Identifying if the vendor can meet your needs for support
• Determining whether any additional services besides the tech may be required

Your organization’s need for a particular type of tech will depend to some extent on:

• Where you are in your DEIB journey
• What your level of understanding of DEIB issues is
• What your specific goals are

Different leaders and organizations are at various stages in their journey to understand and embrace DEIB. When it comes to selecting DEIB tech, orgs first need to be clear on what they want to accomplish, where they currently stand, and what remains to be done.

“The tool allows everyone to begin their DEIB’s learning journey from where they are—curated content is delivered in weekly snippets that don't feel overwhelming.”

A small technology company for a DEIB focus vendor

Another critical factor to take into account is the amount of support your organization might need from the vendor. One way to gauge if the vendor can meet your needs is by looking at the vendor’s size and whether it has the in-house expertise needed.

Currently, most vendors are relatively small, with almost 70% employing fewer than 50 people (see Figure 21). These small vendors might be better suited for organizations with less complex needs (e.g., smaller, limited number of locations / geographies). For orgs with global operations looking to roll out initiatives on a wider scale, larger vendors might be better able to meet your needs. That said, vendor size is clearly not a direct determinant of capability, so it's critical to fully understand the vendor’s offerings.

“ Still very small team—needs more manpower—is not a global solution.”

A midsize financial company for a DEIB focus vendor

Your organization may also require additional expertise or services beyond tech, such as consulting services, or access to resources or communities. From our survey, 42% of vendors offer additional services beyond their tech (see Figure 22). Orgs just starting on their DEIB journey can leverage such solutions to better understand the complexities of the issues around DEIB or to seek additional customer support if needed.

Of the 42% of vendors which provide additional services, about one-third offer services for the assessment and diagnosis of your current state and D&I maturity (see Figure 23). These solutions can be leveraged by orgs looking to expand or reenergize their DEIB efforts, and are in need of insights on where they currently stand.

Almost 30% of those which provide additional services, offer training and resources around D&I learning, which can be of particular use to those looking to solve challenges like unconscious bias. About 40% of vendors help customers manage companywide efforts around DEIB or can help you develop a strategy—ideal for orgs that are just beginning on their DEIB journey and need some extra support (See Figure 23).

“ is a great way to assess where a company stands in their D&I understanding, commitment and strategy, and provides the feature to track and measure D&I activities to develop a roadmap to achieve the desired outcomes to support the organization's goals and objectives.”

A small professional services company for a DEIB focus vendor

In the following checklist, we offer some key questions to help you better understand your organization’s needs. Use these questions as a checklist when beginning your DEIB tech selection to determine where you currently stand regarding your DEIB needs and to kick start your discussions on technology selection.

Auditing in-house tech

As we mentioned earlier, many vendors have added DEIB features to their products in the last 2 years. Given this development, your organization may already have some capability in this area. Thus, your org may already have a “feature” or “friendly” technology that can be leveraged for DEIB purposes.

Your organization may already have a “feature” or “friendly” technology in-house that can be leveraged for DEIB purposes.

For example, some of the new vendors in our study are people analytics tech solutions that have developed DEIB features—allowing users to analyze different cohorts, genders, or groups of employees to understand their levels of engagement, development, and overall experience. Orgs with existing people analytics solutions may find such capabilities embedded in the technology.

Another example of existing tech that has developed DEIB features is HRIS / HCM tech solutions, such as Workday, SAP, and ADP:

• In 2020, Workday launched its Value Inclusion, Belonging, and Equity (VIBE) Central, a dashboard that brings together a company's diversity and inclusion data, best practices content, and reporting. The company also launched the VIBE Index, a metric that allows users to gauge their performance.²⁷
• SAP (via SuccessFactors) offers users the capability to monitor recruitment and management position data for women and underrepresented people, attrition and retention rates, and supplier diversity statistics.
• ADP offers a pay equity tool within its HCM suites.

The following checklist includes a few key questions to consider when auditing existing in-house technology. Compare your results with the list of available tech in the market to help you narrow your choices.

What’s Next

Given the findings from our study, we offer a few trends that we expect to see in the coming 12-18 months.

1. Continued integration of DEIB tech into all areas of talent
We expect to see more HR tech vendors add DEIB features / functionalities to their solutions and, thus, address a wider range of talent areas. And, while we did see a shift away from a heavy focus on TA and toward more solutions addressing more areas, we expect to see this trend continue and grow. Moving forward, more orgs will be looking to address all talent management activities, such as recognition, performance management, and talent mobility, through a DEIB lens.

2. More focus on inclusion and belonging
Recent research reveals that 52% of people choose culture as the primary reason to work at a company.²⁸ The recent addition of D&I ratings and demographic information for companies on Glassdoor also reflects the growing importance that job seekers place on these issues when considering new roles. We expect to see more orgs leverage DEIB tech to measure and improve their inclusion and belonging.

3. Greater expectations to drive DEIB actions
As orgs feel the pressure to take a stand, and act against systemic racism and gender discrimination, they’ll no longer be satisfied with technologies that only go so far as providing data on the current state of DEIB and identifying gaps. DEIB tech must be able to:

• Make recommendations, and highlight and prioritize specific actions for leaders
• Connect these actions to business outcomes
• Offer scenarios for how it may impact the org if those actions aren’t implemented

4. More accountability and transparency at all levels
Related to the point on actionability, we also expect to see tech drive greater accountability and ownership for DEIB at both the individual and organizational levels. Democratization of insights on actions around DEIB can encourage individual employees and leaders to take greater responsibility and ownership to monitor and change their behaviors accordingly. Tech can help employees and leaders understand how their daily actions may affect DEIB outcomes and make appropriate recommendations.

Conclusion

The events of 2020 have shifted the emphasis for organizations to act on DEIB from “need to do in the near future” to “need to do it right now.” The call for orgs to act on these issues and the urgency to show results have never been greater. The tech market is responding to these changes, as is evident from the growing DEIB market and capabilities: It’s time for organizations to step up and do their part, too.

DEIB tech can play a crucial role in helping org move the needle, provided it's leveraged thoughtfully. Today's buyer has more tech choices than ever before, which also comes with greater associated risks. However, leaders must remember that DEIB tech is only one part of the entire process—and, without proper alignment with the overall purpose, a comprehensive strategy, and a degree of accountability and transparency, technology in itself won't be able to bring about any lasting or meaningful change.

Appendix 1: Methodology

We launched our study in summer 2020, with a vendor survey that ran from June-August 2020. A total of 45 vendors completed our survey: One vendor offers 2 DEIB-focused solutions and another vendor offers 3 solutions—thereby, bringing the total number of solutions in our study to 48.

Once we collected the data, we reached out to vendors for reviews, clarifications, and to collect any missing data. We combined this with publicly available data on vendors that we found through our own research, bringing the total number of identified vendors to 196. We conducted our analysis in November 2020 and the report was written during December 2020-January 2021.

For this report, we added a customer poll, so that we could better understand the challenges and areas that DEIB tech is being used for, and user satisfaction levels with the vendors. We also created a robust evergreen DEIB tech tool, which serves as the repository of vendor-specific information. This new tool includes updated data and info on every vendor that participated in the research, including their capabilities and customer NPS scores.

Vendor Demographics

The majority of vendors (80%) that participated in our study have their headquarters in North America. Of the remaining, 16% are based in Europe, and 4% in Asia-Pacific or Australia (see Figure 24).

In 2021, the majority of investments in DEIB tech came from 5 industries—technology, financial / banking / insurance, healthcare, professional services, and pharmaceutical / chemical / life sciences (see Figure 25).