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DEI tools arrive at critical time for HR

Employers are being held accountable for meeting diversity, equity and inclusion goals, especially executives. HR vendors are responding with new tools, including ADP.

ADP Inc. unveiled new diversity, equity and inclusion tools to help firms measure and monitor their social progress. The tools from ADP and other vendors arrive at a pressing time. Diversity metrics are becoming a high priority for many employers, some of which are tying them to compensation.

Interest in diversity, equity and inclusion (DEI) tools accelerated with the Black Lives Matter protests last year. ADP's DEI Dashboard product, which was released Monday, arrives when some executives are seeing their compensation tied to progress on social goals, said Laura Becker, an analyst at IDC.

Measuring and monitoring diversity, equity and inclusion at many firms "has become a high priority," Becker said. "Companies are being held more and more accountable for their diversity and inclusion targets, and measuring them and assessing them is becoming crucial."

For instance, in a January securities filing, Apple said its annual cash incentive would include "an environmental, social, and governance modifier."

Similarly, Starbucks CEO Kevin Johnson said in October that "we will hold ourselves accountable at the highest levels of the organization, connecting the building of inclusive and diverse teams to our executive compensation program."

DEI tools in demand

The data that makes up the ADP DEI Dashboard is already available in HR systems, said Brent Weiss, senior director of strategy at ADP DataCloud, a set of workforce analytics tools and benchmarking data. But its customers had to manually create views into this data as demand for DEI metrics increased. ADP has some 860,000 customers globally and about $14.6 billion in revenue.

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Corporate boards were suddenly becoming interested in this data and asked HR to update their work around diversity, Weiss said.

The analytics work includes the ability to answer questions such as: "Are you able to bring in minority groups to your organization and keep them?" Weiss said. The analysis work extends to managers and leaders, he said.

Along with providing demographic information, ADP's DEI Dashboard can link to data on employee terminations, performance scores and whether employees of one underrepresented group are leaving at higher rates than others.

If an employer wants to understand what explains an employee's pay, the system can look, for instance, at the interaction of performance and tenure, Weiss said.

ADP customers can also compare how their DEI practices stand against industry peers by using the vendor's DataCloud benchmarking services, a capability which may be of particular importance, said Trevor White, an analyst at Nucleus Research.

ADP Diversity, Equity and Inclusion Dashboard
ADP DEI Dashboard

The problem firms run into is that they want more diversity and equitable outcomes in their organizations, but they don't have a concrete idea of the next steps to take to achieve it, White said. Knowing how they compare to their peers may give them a framework for action -- they can see where they are behind or ahead, he said.

DEI tools market grows

ADP is far from alone in releasing new DEI tools.

In February, Qualtrics International Inc. announced DEI tools that include pre-built questions as well as a new partnership with Korn Ferry, a consulting firm, to work on diversity issues.

Last year, Workday announced new belonging and diversity tools, VIBE (Value Inclusion, Belonging and Equity) Central and VIBE Index to assess, measure and benchmark diversity, equity and inclusion.

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