12 Benefits And Risks Of D&I Technology
New research reveals a new and transformative technology market
Posted on 02-22-2019, Read Time: Min
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Over the last 18 months, the focus on diversity and inclusion (D&I) has gone from a slow burn to more of a flashpoint. In 2017, #MeToo thrust D&I into the spotlight—introducing Boards of Directors, CEOs, business and HR leaders to the dangers of turning a blind eye to bad behavior or an unhealthy culture. Before #MeToo, what you didn’t know was unlikely to hurt you. Now, what you don’t know can hurt you, your brand, and your stock price.
Leaders across organizations have been stepping back and reflecting on this changed landscape, asking, “How do we manage risk?” and “How do we build a culture that does not tolerate discriminatory or inequitable behavior?”
In the past, many of our organizational solutions for diversity, inclusion, and equity-focused solely on the individual: comprising things like unconscious bias training, mentoring, or sponsorship. But the individual approach alone has proven inadequate. Organizations are still struggling to bring diversity into their organizations—especially at leadership levels. Companies now are looking for system-wide solutions to address their D&I challenges. That means a combination of strategy, processes, policies, technology, culture, and individual behaviors, purposely designed to address individual and structural biases that are barriers to fair and respectful treatment in the workplace.
For many companies, the answers lie in technology. Companies are looking to software to give them tools to address D&I challenges, and in response, scores of new solutions have entered the diversity and inclusion market—full of energy and optimism for changing the way we work.
RedThread Research and Mercer recently partnered on a comprehensive study of D&I technology, both to inform organizational leaders of these innovative solutions now available in the marketplace, and to help technology vendors identify new opportunities.
We define D&I technology as “enterprise software that provides insights or alters processes or practices, at the individual or organizational level, in support of organizations’ efforts to become more diverse and inclusive.” We have found that many of the new D&I technologies we have uncovered to date can be categorized similarly to how we categorize talent management activities. These technologies are typically targeted at either candidates or employees and can be grouped into four overarching categories with numerous subcategories:
- Talent Acquisition—Includes candidate sourcing and selection
- Development/Advancement—Includes learning and development, mentorship and career management, performance management, high-potential selection, and leadership development
- Engagement/Retention—Includes employee experience, employee communications, and employee voice
- Analytics—Includes D&I analysis (e.g., D&I dashboards and pay equity), D&I business case analysis (e.g., data that shows the return on diversity and inclusion investments), and employee resource group (ERG) management and analysis
Our research found that the D&I technology market is still fragmented, but substantial and growing rapidly. Of the 105 vendors we identified for the study, the majority were small but in rapid growth mode, less than four years old, with customers mostly from knowledge industries (finance/banking, technology, professional services). We estimate the overall market size to be approximately $100 million.
While there are many potential benefits of these D&I technology solutions, we found the most apparent one is the opportunity to create consistent, scalable practices that can identify or mitigate biases across organizations, often in real-time.
Many people-related decisions leave a lot of room for bias, particularly when it comes to an assessment of a person’s skills, behaviors, or value (e.g., for hiring, performance evaluation, promotion, or compensation). Much of the technology on the market today is designed to change the processes that enable bias or identify that bias exists. Another benefit customers see in D&I technology is the increased understanding of the current state of diversity and inclusion throughout the organization. With greater visibility, leaders can better measure and monitor the impact of D&I initiatives.
On the other hand, there also are latent risks associated with the use of technology to address D&I issues, such as the potential for bias in artificial intelligence (AI) algorithms. Research shows people often misunderstand AI and overestimate the power of using such technology in their decision-making. There are other risks, too. For example, organizations that identify diversity and inclusion problems but fail to act are at greater risk for legal repercussions. There is also a common perception that D&I technology will solve bias problems and that people are not responsible for solving them. These risks— and plenty of others—could impact the effectiveness of these new technologies.
Here's a breakdown, from our report, of some of the benefits and risks associated with implementing D&I technology:
Benefits:
While there are many potential benefits of these D&I technology solutions, we found the most apparent one is the opportunity to create consistent, scalable practices that can identify or mitigate biases across organizations, often in real-time.
Many people-related decisions leave a lot of room for bias, particularly when it comes to an assessment of a person’s skills, behaviors, or value (e.g., for hiring, performance evaluation, promotion, or compensation). Much of the technology on the market today is designed to change the processes that enable bias or identify that bias exists. Another benefit customers see in D&I technology is the increased understanding of the current state of diversity and inclusion throughout the organization. With greater visibility, leaders can better measure and monitor the impact of D&I initiatives.
On the other hand, there also are latent risks associated with the use of technology to address D&I issues, such as the potential for bias in artificial intelligence (AI) algorithms. Research shows people often misunderstand AI and overestimate the power of using such technology in their decision-making. There are other risks, too. For example, organizations that identify diversity and inclusion problems but fail to act are at greater risk for legal repercussions. There is also a common perception that D&I technology will solve bias problems and that people are not responsible for solving them. These risks— and plenty of others—could impact the effectiveness of these new technologies.
Here's a breakdown, from our report, of some of the benefits and risks associated with implementing D&I technology:
Benefits:
- Implementing more consistent, less-biased, and scalable people decision-making process.
- Increasing the understanding of the current state of diversity & inclusion across the entire organization, using both traditional and new metrics.
- Measuring and monitoring the impact of efforts designed to improve D&I outcomes
- Raising awareness of bias occurring in real-time and at the individual level and enabling a range of people to act on it.
- Enabling action at individual levels by making new, appropriate information available to employees at different levels of the organization.
- Signaling broadly the importance of a diverse and inclusive culture to the organization.
Risks:
- Implementing technology that itself may have bias due to the data sets on which the algorithms are trained or the lack of diversity of technologists creating it.
- Creating legal risk if problems are identified and the organization fails to act.
- Enabling the perception that the technology will solve bias problems, not that people are responsible for solving them.
- Reducing people’s sense of empowerment to make critical people decisions
- Implementing technology or processes that are disconnected from other people processes or technology.
- Enabling employee perceptions of big-brother monitoring, an overfocus on “political correctness,” or “reverse-discrimination.”
Ultimately, we see a lot of reason to feel optimistic about the potential of this new market. In the short term, it will be important to focus on understanding the intersection between technology and human dynamics—especially in complex situations. And as the market continues to evolve, we will want to focus even more on understanding success stories, failures, and lessons-learned when using D&I technologies.
Are you looking to technology to help solve your D&I challenges? Share your story with us in the comments! To read the full Diversity & Inclusion Technology: The Rise of a Transformative Market report, including more information on each technology category, case studies and predictions, download a free copy at https://info.mercer.com/DandITech.
Author Bios
| Stacia Sherman Garr is the Co-founder & Principal Analyst at RedThread Research. Stacia is a researcher and thought leader on talent management, leadership, D&I, people analytics, and HR Technology. A frequent speaker and writer, her work has been featured in Fortune, Forbes, and The New York Times, among others. Stacia co-founded RedThread Research in 2018, after leading talent and workforce research for eight years at Bersin by Deloitte. Before Bersin, Stacia spent nearly five years conducting research and creating learning content for the Corporate Leadership Council, part of CEB/Gartner. She has an MBA from the University of California, Berkeley, and a master’s degree from the London School of Economics. Connect Stacia Garr Visit https://redthreadresearch.com |
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| Carole Jackson is a Senior Principal in Mercer’s Diversity & Inclusion practice, responsible for their research and consulting solutions. Carole has more than 15 years of experience in Human Resources consulting, with a strong background in industrial organizational psychology, technology solutions, employee research, leadership development, and diversity & inclusion. Prior to joining Mercer in 2014, Carole held business development and consulting roles at Bersin& Associates (now Bersin by Deloitte) and TalentKeepers. Carole has an undergraduate degree from the University of Florida and a Master’s degree in Industrial Organizational Psychology from the University of Central Florida. Connect Carole Jackson Visit www.mercer.com |
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