19 January 2021

DEIB Tech 2021 Overview

Stacia Garr
Co-founder & Principal Analyst
Priyanka Mehrotra
Research Lead

TL;DR

  • This is an excerpt of the full study, DEIB Tech 2021: A Market Maturing to Meet the Moment and a compliment to the DEIB Tech tool
  • Currently there are at least 196 DEIB tech vendors on the market; 1-year market growth rate was 36%, 2-year CAGR was 59%, current market estimate is $313 million
  • The broader HR tech world is responding to these market shifts, with a growth of 136% of vendors who offer features or functionalities that cater to DEIB since 2019
  • The percentage of DEIB solutions focused on people analytics increased 87% since 2019

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. Shown 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 has 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 and why the number of DEIB job openings has skyrocketed. The thing is this: organizations cannot just talk about DEIB and hire people to lead it. That is 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.

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.1 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 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.

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

Many companies have responded by making pledges or promises in support of the #BLM movement.2 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 2 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.3

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 by vendors
  4. Guide leaders who may be looking to make tech investments

Key Findings

The study covers three major areas and how they have changed since 2019: the DEIB tech market, talent areas vendors focus on, and what buyers should consider before investing. We also address what we see coming next. Some of the key findings from the study include the following:

  1. Three major shifts punctuate the current DEIB tech market
    • In previous years, leaders were especially focused on gender; in 2020-21, the emphasis has evolved to include a focus on race and ethnicity.
    • Social justice movements and conversations around discriminatory workplace practices and behaviors have led to greater attention to inclusion than ever before.
    • The role of AI in mitigating bias to enhance DEIB has come front and center, and more approaches have been introduced to address this issue.
  2. The DEIB tech market is hotter than ever
    • The global market size is estimated to be $313 million and growing, up from $100 million in 2019.
    • 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.
    • The total number of DEIB tech vendors increased by 87%, with a total of 196 vendors in the market for 2021, compared with 105 in 2019.
  3. People analytics for DEIB has arrived
    • Lack of analytics and insights on DEIB is the primary challenge the majority of vendors help their customers solve, hence the growing number of solutions. providing DEIB analytics in 2021 compared to 2019 (28% vs 26%, respectively).
  4. Small-sized organizations and knowledge industries remain the main customers of DEIB tech
    • The largest customer category is small-sized organizations (those with less than 1000 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 range.
    • The industries most likely to be DEIB tech customers are concentrated in knowledge industries, namely technology, financial, banking, and insurance.

Check Out the Full Study and Tool

The full study (available to members) has lots more information than what we’ve detailed here, including many more details on the market, customer quotes and feedback, and checklists for leaders interested in DEIB tech.

In addition, we encourage you to check out the brand new, fully redesigned DEIB Tech tool, which is available both to members and non-members. You can look at the 196 vendors in each of the four talent areas and their relevant sub-categories. RedThread members can click through and see details on individual vendors.

Figure 1: DEIB Tech Market Tool | Source: RedThread Research, 2021.

 

 

Figure 2: DEIB Tech Market Tool, Categories Selected | Source: RedThread Research, 2021.

RedThread members can see the areas of talent vendors focus on, the top industries served, vendor capabilities, strengths, challenges addressed, and customer feedback (see Figure 3). We provide the maximum amount of information we can, based on what vendors shared with us or what we were able to find publicly available. This tool is designed to be evergreen, so it will be updated continuously as we conduct briefings throughout the year.

Figure 3: DEIB Tech Market Tool, Example of Vendor Detail Page | Source: RedThread Research, 2021.

 

A Thank You

This study involves a significant time investment from everyone who participated in its development. We want to thank all of the vendors and customers who gave their time, energy, and expertise to make this such a robust study and tool.

If you have any questions about this research or about becoming a RedThread member, please contact us at hello@redthreadresearch.com.

 

 

Footnotes

  1. Google pledges to overhaul its sexual harassment policy after global protests, Sam Levin, The Guardian, November 2018, https://www.theguardian.com/technology/2018/nov/08/google-sexual-harassment-policy-overhaul-walkout-protest
  2. Here’s What Companies Are Promising to Do to Fight Racism, Gillian Friedman, The New York Times, August 2020, https://www.nytimes.com/article/companies-racism-george-floyd-protests.html
  3. The Next Big Breakthrough in AI Will Be Around Language, H. James Wilson and Paul R. Daugherty, Harvard Business Review, September 2020, https://hbr.org/2020/09/the-next-big-breakthrough-in-ai-will-be-around-language

Written by

Stacia Garr Redthread Research
Stacia Garr
Co-Founder & Principal Analyst

Stacia is a Co-founder and Principal Analyst for RedThread Research and focuses on employee engagement/experience, leadership, DE&I, people analytics, and HR technology. A frequent speaker and writer, her work has been featured in Fortune, Forbes, The New York Times, and The Wall Street Journal as well as in numerous HR trade publications. She has been listed as a Top 100 influencer in HR Technology and in D&I. Stacia has an MBA from the University of California, Berkeley, and a master’s degree from the London School of Economics.

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