DEIB Tech: A Market Maturing to Meet the Moment
January 19th, 2021
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:
- Help leaders understand the role of DEIB tech
- Provide insights on the state of the DEIB tech market
- Highlight the talent areas focused on by vendors
- Guide leaders who may be looking to make tech investments
- 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.
- 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.
- 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.
- 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).
- 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:
- Clarify their purpose or reason for doing it
- Establish goals
- Develop a strategy to meet those goals
- Identify critical levers and activities that impact those goals
- Leverage technology
- 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:
- Experiencing 3 big shifts in its approach to DEIB
- Hot and growing with more vendors offering DEIB capabilities than ever before
- Largely comprised of customers from small orgs and knowledge sector industries
- 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:
- Focus shift from gender to race
- Stronger spotlight on inclusion
- 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.
Ph.Creative is a U.K.-based employer brand agency. When the company hired its current Chief People Officer, Cher Murphy, there was no official DE&I strategy in place. Being a brand agency, the company truly believes that inclusion and belonging are an outcome of the employer brand and the experiences of the employees with the brand.
Hence, one of the first things Cher did was establish an engaging onboarding experience, called “Meet the Phamily." The objective, which includes a buddy program, is to get new talent to engage as soon as they join. There's a “meet the family” interview with the new employee which gives everyone a chance to connect. The buddy program also enables new talent to connect with others on things outside of work, such as what they're currently watching and what their creative feed is like. These efforts help people coming in from different backgrounds and experiences to connect and feel included.
This greater focus on inclusion is evident in how a solution’s success is measured. In our survey, we asked vendors how their customers measure the success of their DEIB tech. In 2019, the top success measure was the increase in diversity of talent pipeline. In 2021, it was very different though: the increase in level of inclusion within the organization (see Figure 6).
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.
- In general, small businesses comprise a greater percentage of DEIB tech than large orgs
- Customers from technology, financial, and healthcare / life science industries have increased
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:
- 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
- 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.
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
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.
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.
Postmates, a food delivery company, leveraged Eightfold’s Talent Experience Module to improve its candidates’ application experience.
As a result, candidates now simply give Postmates their resumes, which are then used to match their skills with jobs—instead of requiring each candidate to scroll through the company’s career site and identify the roles that fit them. This not only provides a more improved application process for candidates, but also opens up the candidate pool for Postmates. The solution can match candidates to roles that they might not have selected for themselves or missed out on. The company can also develop targeted and job-specific content that applicants can access on the career site.
As a result of improving the overall candidate experience, Postmates experienced an increase of more than 33% in Hispanic / Latino applications, and more than 12% growth in Black / African-American applications between Q2-Q3 2020. In addition, the company noticed a rise of more than 91% in female applications in September 2020, as compared with the same period in 2019.
This last result is especially remarkable: We know that women are less likely to apply for a job unless they feel 100% qualified for it, as compared with men24 and, on average, apply for fewer jobs.25 The job-matching and personalized content significantly increased the chances of women applying for roles that they otherwise would not have applied for.
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.
McKesson initially offered a solution, Cultivate, as a tool for people leaders with distributed teams to better understand their digital relationships. Once the pandemic hit, McKesson underwent greater rapid digital transformation due to the dramatic shift to a remote workforce, which further increased employee reliance on digital communications. As a result, the solution became a vital resource as people leaders looked to understand how that change impacts team relationships.
The results by McKesson have thus far been a resounding success. Managers that actively use the solution give 90% more recognition to their direct reports, and more than 80% of users report better self-awareness of how they treat team members. This includes insights on observed behaviors, such as after-hour messages, responsiveness, sharing opinions, and more. This is important as leaders work to understand their role in giving recognition, requesting feedback, or fostering a psychologically safe place.26
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.
For Southern New Hampshire University (SNHU), diversity is a strategic priority. To better serve the needs of its learners, SNHU is focused on supporting a diverse, inclusive culture from within. The university transformed its strategy—concentrating on the differing experiences of its employees and fostering a culture of belonging for all.
To understand the experiences of its employees, as well as attract and retain a workforce that reflects the diversity of its society and, consequently, its learners, the university leveraged Peakon. This solution provides them with real-time optics into the employee experience, engagement, and inclusion.
The solution allows them to slice and dice their data by various dimensions of diversity, such as gender, generation, race, or location, which has allowed the university to see what stories the data relates.
The initial data revealed that setting measurable goals for developing, retaining, and advancing the growth of the underrepresented employees is of paramount importance. Understanding the reasons behind employee turnover helped the university focus on the experiences of specific groups at SNHU and what it needed to keep in mind to better support them in the future.
As a result, the university experienced the following increases in Net Promoter Scores™ (NPS):
- +33 NPS in overall engagement between 2018 and 2020
- +62 NPS in the Freedom of Opinions driver
- +40 NPS in Growth driver since implementation
Since the university implemented the technology in 2017, it has received 185,000+ comments from employees, which has helped the university better understand its employee experience.
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.
A leading industrial manufacturer, committed to achieving a workforce that reflects the communities in which it works and serves, identified 2 goals to ensure it realizes that commitment to:
- Achieve 50% female parity in leadership roles by 2030
- Create a globally diverse workforce with inclusive leaders and teams
The company leveraged Visier to measure retention and promotion rates of women leaders to see how it’s changing and where areas of opportunity may exist. The company also looked at its recruiting pipeline to better understand how women and underrepresented people move through the full pipeline from recruiter review to meetings with the hiring manager to offer extension.
This manufacturer found that women perform as well as men—and occasionally outperform them. Women also tend to stay longer with the company. However, a review of the TA process uncovered the number of women applicants has been disproportionately lower than their male counterparts. Further, as women move through the hiring process, more are dropped during the interview process.
While taking action to mitigate bias, the number of women and underrepresented people who move through the full hiring process has increased. Programs implemented for hiring managers include unconscious bias training, as well as workshops on inclusive conversations—enabling a better hiring experience for women and underrepresented candidates.
The company is continuing to make progress to meet its 2030 goals, which include achieving gender parity in leadership roles.
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.
Questions to consider: Determining your org’s DEIB tech needs
Understand your organization’s DEIB journey
☐ To what extent does your org understand the nuances and complexities related to DEIB tech?
☐ Where is your org in its DEIB journey? Have you planned where this journey will take your org? Are your stakeholders aligned with it?
☐ What, if any, DEIB-focused actions have you taken to date?
Identify if the vendor can meet your needs
☐ What specific activities do you need the solution to target?
☐ Does your org have multiple offices in different locations? What’s the extent of support needed by each?
Determine what additional services may be required
☐ What level of customer support will your org need to implement and use the solution?
☐ How much support will your org need from the vendor to manage DEIB efforts for the entire organization?
☐ How much support, if any, will your org need in measuring and assessing your current state of DEIB efforts?
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.
Questions to consider: Auditing your org’s in-house tech
☐ Do you have the in-house expertise and resources to conduct and analyze your audit of existing tech?
☐ Should you research and secure the services of external consultants to handle this?
☐ What’s your timeline for conducting this audit?
☐ What deliverables are expected?
☐ What tech do you currently have in-house that can be leveraged for DEIB purposes?
☐ To what extent do those technologies have DEIB features? What's the level of sophistication of those features?
☐ Where are the existing gaps in your DEIB strategy? Which of those can a DEIB solution help with?
☐ What are the additional costs associated with adding new DEIB features?
☐ How would you measure the success of these new features?
☐ What additional tech do you need to help execute your strategy / meet your goals?
☐ How would this new tech fit in with your existing tech ecosystem?
☐ Which part(s) of the business are willing to experiment with new DEIB tech?
☐ Which specific capabilities do you require new tech to have?
☐ How would you measure the success of this new DEIB tech?
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.
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.
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).
- As S&P Companies Rethink D&I Policies, ESG Funds Attract Record Flows, Sara Mahaffy, RBC, August 2020, https://www.rbccm.com/en/insights/story.page?dcr=templatedata/article/insights/data/2020/08/as_sp_companies_rethink_di_policies_esg_funds_attract_record_flows
- Diversity Now: How Companies and Workers Are Bringing Nationwide Social Justice Protests to the Workplace, Amanda Stansell and Daniel Zhao, Glassdoor, July 15, 2020, https://www.glassdoor.com/research/diversity-jobs-reviews/#
- 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
- Edelman Trust Barometer Special Report: Brand Trust in 2020, June 2020, https://www.edelman.com/research/brand-trust-2020
- 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
- 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
- The Learning Tech Landscape: More – Just More, Dani Johnson, RedThread Research, December 2020, https://redthreadresearch.com/the-learning-tech-landscape-more-just-more/
- Black workers face two of the most lethal preexisting conditions for coronavirus—racism and economic inequality, Elise Gould and Valerie Wilson, Economic Policy Institute, June 2020, https://www.epi.org/publication/black-workers-covid/
- Laid Off More, Hired Less: Black Workers in the COVID-19 Recession, Jhacova Williams, RAND Blog, September 2020, https://www.rand.org/blog/2020/09/laid-off-more-hired-less-black-workers-in-the-covid.html
- Companies Try a New Approach to Diversity, Equity and Inclusion: Honest Conversations, Theresa Agovino, SHRM, August 2020, https://www.shrm.org/hr-today/news/hr-news/pages/a-new-approach-to-diversity-equity-and-inclusion.aspx
- Diversity, Equity, Inclusion & Belonging: Creating A Holistic Approach For 2021, Stacia Garr and Priyanka Mehrotra, RedThread Research, December 2020
- Edelman Trust Barometer Special Report: Brand Trust in 2020, June 2020, https://www.edelman.com/research/brand-trust-2020
- How companies can make Black employees feel like they belong, Jeanne Sahadi, July 2020, https://www.cnn.com/2020/07/08/success/sense-of-belonging-at-work-black-employees/index.html
- Americans Agree On Something: They Don’t Like Big Corporations, Ben Schiller, November 2017, Fast Company, https://www.fastcompany.com/40495233/americans-agree-on-something-they-dont-like-big-corporations
- Big British Bank Barclays Accused Of Spying On Employees—This May Be The New Trend, Jack Kelly, Aug 2020, https://www.forbes.com/sites/jackkelly/2020/08/13/big-british-bank-barclays-accused-of-spying-on-employees-this-may-be-the-new-trend/?sh=62da644a43a0
- How My Boss Monitors Me While I Work From Home, Adam Satriano, May 2020 https://www.nytimes.com/2020/05/06/technology/employee-monitoring-work-from-home-virus.html
- Systemic Racism: The Existential Challenge for Businesses, September 2020, https://www.edelman.com/research/systemic-racism
- U.S. Nurses in 2020: Who We Are and Where We Work, Myrna B. Schnur, MSN, RN, May 2020, https://www.nursingcenter.com/ncblog/may-2020/u-s-nurses-in-2020
- “Information: the currency of the digital age,” Carly Fiorina, former CEO of Hewlett-Packard, December 2004, https://www.hp.com/hpinfo/execteam/speeches/fiorina/04openworld.html
- Workday launches VIBE Central, VIBE Index to measure diversity and inclusion efforts, Larry Dignan , ZDNet, September 2020, https://www.zdnet.com/article/workday-launches-vibe-central-vibe-index-to-measure-diversity-and-inclusion-efforts/
- The Human Impact of Business Transformation, Insider, https://www.insider.com/human-impact-of-business-transformation