Over the past few decades, human resources and business leaders have come to understand that greater diversity, equity, and inclusion (DEI) positively affects their corporate culture, their brand perception, their ability to attract and retain talent, and the performance of the business.
In fact, the justification for diversity and inclusion in terms of business performance is stronger than ever, according to the 2020 McKinsey & Co. report “Diversity wins: How inclusion matters.” The company has been collecting data on corporate diversity and inclusion since 2014 and has noted an increasing disparity between the financial performance of more diverse organizations and that of less diverse companies.
“For diverse companies, the likelihood of outperforming industry peers on profitability has increased over time, while the penalties are getting steeper for those lacking diversity,” the report noted.
But while business leaders generally understand the need for more diverse, equitable, and inclusive workplaces, “most [organizations] have made little progress, are stalled or even slipping backward,” according to the report, which surveyed more than 1,000 large companies across 15 countries. The organizations that are succeeding have adopted systematic, business-led approaches to DEI, the report said.
As part of those efforts, organizations are increasingly turning to digital tools aimed at improving DEI. These tools can help equalize pay, root out unconscious bias, level the playing field for promotions, give those in the majority culture a better understanding of the discrimination some of their co-workers face, and more. They can be an important part of a companywide effort to not only boost diversity among employees but create an inclusive and equitable workplace.
Here are four ways DEI tools can drive meaningful change across the organization.
Help identify bias blind spots
While many organizations think they’re addressing diversity and inclusion head on, there may be discriminatory aspects of the corporate culture and/or policies that executives aren’t aware of.
“This phenomenon is known as a bias blind spot, where individuals or companies are not even aware that bias or discrimination is even a problem,” said Calvin Lai, assistant professor, Dept. of Psychological & Brain Sciences at Washington University in St. Louis. For example, a diversity blind spot for IT might be an onboarding software system that doesn’t take into consideration that a new worker identifies as a gender that is not the same as the gender noted on their identification documents.
A way to get around bias blind spots is by using DEI tools to collect organizational data, Lai said.
“If you or your company are the kind of egalitarian folks that you think you are, then presumably the data should bear that out,” he said. “However, if the data finds that there are inequalities in your organization, whether it’s in recruitment or evaluation or whatever, then you have to justify it or actually do something to reduce those inequalities. That’s why I think any organization is going to benefit from just tracking diversity and inclusion metrics.”
Using this data to identify bias blind spots can help companies determine where they’re coming up short, evaluate the experiences of various employee groups, and take the necessary steps to prevent employees from resigning because of these inequities. UnBiasIt, Flair, Diversio, and Workhuman are among the analytics tools that can help detect bias blind spots in the workplace.
Remove subjectivity from performance assessments
To realize the competitive advantages of a diverse workforce, companies need diversity at all levels of the business, not just the lower ranks. When it comes to profitability, McKinsey’s “Diversity wins” report found that the greater the gender and ethnic diversity an executive team has, the more likely the company is to lead in profitability. The firm’s advice is clear: “Companies should focus on advancing diverse talent into executive, management, technical, and board roles.”
To do that, managers must not favor one group over others when it comes to promotions. But unconscious biases often affect managers’ perception of employees’ performance and potential. Using DEI tools can help companies circumvent those biases in their performance review processes.
Although performance reviews should be based solely on merit, all too often managers let gender, race, and other biases creep into those evaluations, according to a 2020 study “Inside the Black Box of Organizational Life: The Gendered Language of Performance Assessment,” published in the American Sociological Review. For example, “some behaviors, such as ‘taking charge,’ are more valued for men than for women: ‘taking charge’ is associated with the highest performance ratings for men but not for women,” the study’s authors wrote.
Thus, a manager might assess the same level of performance more negatively for one worker than for another. And without reliable, unbiased information on the performance of their employees, it’s not possible for managers to set meaningful professional development goals. This in turn prevents workers from realizing their full potential and often means they are passed over for promotions down the line.
In addition, when it comes to self-evaluations, people from some cultures and backgrounds are often reluctant to talk up their own work, according to Jonathan Roberts, senior analyst at Forrester. “If you think about the different types of people at work, you have people who are extroverts, people who can really advocate for themselves, people who don’t mind tooting their own horns,” he said. “And then you have people from certain cultures and regions where it’s actually really rude to promote your good work and to advocate for yourself. Other people are supposed to do that for you.”
Consequently, when it comes to a performance review process based on self-evaluations, some employees are going to do better than others just because of their internal makeup, Roberts said.
DEI tools can help level the playing field, according to Roberts. “There are tools such as Eightfold.ai that eliminate self-evaluations by using artificial intelligence and some analytics to predict employees’ future capabilities,” he said. “These tools put actual performance and skills into the mix to help [decision makers] decide who gets promoted and what bonuses should look like.”
Other HR vendors that offer AI-driven performance management tools include Lattice, Phenom, and peopleHum. IBM uses its own Watson Analytics platform to predict the future performance of its employees to determine their promotions and pay.
When such tools remove the subjectivity from the performance assessment process, managers can make decisions based on merit, Roberts said. “When you do that, you have more people in appropriate roles.”
Improve learning and development
Traditionally, companies have provided unconscious bias and sexual harassment training as part of their DEI initiatives. But while traditional training techniques can seem stale, some DEI tools, such as Equal Reality, Mursion, and Strivr, offer virtual reality training that enables any employee to learn what it’s like to be someone who faces discrimination in the workplace. These tools help employees identify bias by experiencing situations as others of a different gender, sexual orientation, race, or ethnicity or with varying abilities experience them.
“Sometimes it’s about implicit or unconscious bias and sometimes it’s about microaggressions,” Lai said.
Companies should also include DEI awareness in every aspect of their learning and development efforts. For example, tools such as Paradigm, Hackerly, and Edflex offer personalized career development, targeted skill development, and executive coaching for women and minorities to help them advance within their companies.
“When you think about learning and development, do employees have access to stretch assignments?” asked Chandra Robinson, director analyst in the Gartner HR practice, referring to assignments beyond the employee’s current skills or expertise. “There could [also] be a targeted [development] program to [promote] women within the organization.”
Analyze pay equity
Pay equity means compensating workers with similar jobs with equal pay, regardless of ethnicity, race, gender, or other status. A pay equity analysis helps companies fight against unconscious bias and a lack of diversity in the workplace.
Pay equity begins with employees’ starting salaries and continues throughout every stage of their employment, according to the IDC report “Defining Diversity, Equity, and Inclusion: Assessing Adoption Levels and Drivers.” In addition, recognition and periodic rewards must also be equitable, the report noted.
“There are DEI tools that can help identify pay gaps to ensure equal pay for equal work,” Forrester’s Roberts said. “That’s kind of hard to do manually. But these tools point out the areas in which you might have a problem, and then you can make more equitable and inclusive decisions around employee salary.”
One such tool is PayEQ, Syndio’s pay equity solution, said Lisa Rowan, vice president, HR services research at IDC. PayEQ enables organizations to analyze, resolve, and prevent pay disparities. Other pay equity products include Payscale, Pihr, Gapsquare, and Parity Software.
“They will review all your [employees’ salaries] and help you find where you might have inequities,” she said. “Then in terms of moving forward from there, it’s really about total rewards — using [these tools] to make sure that you’re not biased in any way and that you’re offering comparable benefits to everyone.”
Copyright © 2023 IDG Communications, Inc.