How data analytics can drive workforce diversity

Many companies are struggling to make their IT teams more inclusive. Is it time for data analytics to take over the job?

Combating the Diversity Dearth illustration, by Daniel Hertzberg [SINGLE USE]
Daniel Hertzberg

From controversies like Gamergate, which sparked death threats against female game developers, to headlines like Newsweek magazine's recent "What Silicon Valley Thinks of Women," it's questionable whether things are better for female techies today than they were 20 years ago.

While women make up 57% of the overall workforce, they account for less than a quarter of all technology professionals. And among higher-ranking positions, women represent only 20% of CIOs at Fortune 250 companies.

And Silicon Valley is notorious for its poor representation of minority groups. Google recently released data on the diversity of its workforce. A meager 2% is African-American while 3% is Hispanic. Yet 30% of Google's workforce is Asian; 61% white. "We're not where we want to be when it comes to diversity," says the report, which is posted on Google's site.

Even corporations known for their progressive policies and sophisticated technologies seem stuck in the Dark Ages when it comes to diversity. Only 15% of Facebook's techies are women; at LinkedIn, women make up a dismal 17% of the tech team.

Fortunately, there are some signs of progress. High-profile female executives like Yahoo CEO Marissa Mayer, Facebook COO Sheryl Sandberg and Hewlett-Packard CEO Meg Whitman are now household names. Female CIOs lead IT at Wal-Mart, Symantec and GE.

And formal initiatives are underway to inspire future generations of women and minorities to pursue jobs in the high-tech industry. Facebook and LinkedIn recently announced plans to jointly launch mentoring and support programs at colleges that would lure more female talent to Silicon Valley. In January, Intel earmarked $300 million to improve the diversity of its workforce and make the tech industry more enticing to women and minorities.

Yet many argue that talk of the importance of diversifying IT teams is more lip service than conviction. "Most people, when you ask them how they think they're doing in improving diversity, would say, ‘Pretty good,'" says John Reed, senior executive director of IT staffing firm Robert Half Technology. "But when you actually see the data, it can be very disappointing. They rarely have made as much progress as they think."

Banking on bytes

Faced with discouraging statistics and quickly losing faith in well-meaning policies and programs, many corporations are turning to data analytics to diversify their IT teams.

Best known for driving hiring decisions and identifying skills gaps, the reality is data analytics can deliver the visibility, workforce intelligence and employee engagement needed to improve gender and minority group ratios.

Using tools from vendors such as Visier, PeopleFluent and Workday, organizations can compare their data against national benchmarks, identify gaps in leadership diversity and measure how their recruitment, retention and career development strategies directly impact the makeup of their IT teams.

The payoff for investing in such highly sophisticated software extends far beyond meeting quotas or ensuring compliance. Rather, a diverse workforce can boost the bottom line, because diversity can foster innovation, drive creativity and lead to improved market share, according to the Center for American Progress.

Brian Levine, innovation leader for workforce strategy and analytics, Mercer [2015]

Brian Levine

"Over the last decade, there's been a lot more focus on diversity to provide for differences in points of view, differences in opinion and differences in experience -- all of which can be linked to driving innovation and driving improvements to the bottom line," says Brian Levine, innovation leader for workforce strategy and analytics at Mercer, a global consultancy.

Melding people of disparate racial, generational, ethnic and cultural backgrounds can also contribute to smarter problem solving. And a more diverse workforce can stave off costly discrimination claims that can cost tens of thousands of dollars in legal fees to defend. Other ancillary costs include bad press, the inability to recruit talent, high turnover and poor morale. In fact, the U.S. Equal Employment Opportunity Commission received 88,778 complaints alleging workplace discrimination in 2014.

But Charlie Judy, chief human resources officer at Chicago-based accounting firm Baker Tilly Virchow Krause, says the fact that "our clients are diverse" is the most obvious reason for leveraging data to achieve diversity. "Whether measured by diversity of ethnicity or gender, they expect the people who work for them to complement that diversity," he notes.

Analytics in action

To fulfill that expectation, Baker Tilly launched a program called GROW, for "Growth and Retention of Women," to improve career opportunities for female employees. GROW has four main components: career advancement, flexible work arrangements, mentoring and benefits. At its core is a proprietary analytics tool that gathers bits and bytes from the accounting firm's HR information system and aggregates that data with other key statistics to create a comprehensive two-page dashboard.

The dashboard illustrates staff composition, turnover trends, average tenure and promotions. Along with detailed graphs and pie charts is a color-coded table indicating whether the performance in each of these categories exceeds expectations, meets expectations or needs improvement.

"If we start to see a blip up or down in a gender-specific turnover, that immediately raises our awareness," says Judy.

For example, Baker Tilly's data analytics system recently revealed a noticeable uptick in turnover among female workers just as they were approaching the five- or six-year mark of their employment.

"We saw a real marked increase -- 5.6% -- in total voluntary turnover consistently across geography and service line," Judy recalls.

Charlie Judy, chief human resources officer, Baker Tilly Virchow Krause [2015]

Charlie Judy

In response, he and his team studied the "whys," including the life events -- such as marriage or children -- that coincide with that juncture in a woman's career. Next, they examined whether certain benefits, such as expanded flextime or the support of a mentor, could curb attrition.

Today, Baker Tilly's record for gender diversity would make a Silicon Valley startup jealous. As of January, 41% of its overall workforce was female, and nearly 40% of those women are IT managers or directors, or hold other high-level positions.

Due diligence required

Despite all the good that data analytics can do to diversify IT, it's hardly a magic bullet. For one thing, "there is certainly a legal hot-button issue with implications around the types of data people are willing to share," says Stacia Garr, vice president of talent and HR research at Bersin by Deloitte. To avoid privacy violations, some HR experts recommend that organizations first have their data collection and parsing practices vetted by legal counsel.

Then there's the thorny issue of racial and ethnic identification. Rocky Beach is the director of partnerships and development at Code2040, a nonprofit organization that creates opportunities for black and Latino engineering professionals in the tech sector. The organization's flagship Fellows Program has placed more than 48 students in summer internship programs with tech companies including Airbnb, Intuit, Pandora and GitHub. This year, more than 40 students will participate in the program, which draws as many as 400 applicants.

Beach recognizes the value of data analytics as "useful" and "a whole new angle to determine whether implicit bias is happening" in the recruiting process. But he cautions that "the data points should be the beginning of the conversation and not the ultimate deciding point."

"One of the complicated issues with race and ethnicity is that it's always been focused on self-identification," says Beach. "But it gets really complex when we ask people to self-identify. Some people have very complicated relationships to their own race. Upbringing, social construct and geography all have an influence on how people identify themselves."

What's more, no amount of information can improve gender and minority ratios if the data is inaccurate, outdated or siloed in disparate systems. "Like with anything else, if you don't have clarity with what's happening within your organization with regard to the data, it's very hard to make change," says Garr.

Stacia Garr, vice president of talent and HR research, Bersin by Deloitte [2015]

Stacia Garr

Another potential pitfall: the skill required to store confidential data securely, and translate raw data into actionable insights. No longer are HR professionals simply résumé-slinging talent scouts. Rather, big data has completely revolutionized the role of HR so that statistical aptitude and business acumen are now prerequisites for the job.

Legal and data management challenges aside, data analytics also has its limitations. How easily women rise through the ranks, what programs prepare minorities for senior management, how tenure affects promotions and compensation -- those are all metrics that can be used to assess how effectively an organization is diversifying. Less quantifiable is an employee's cultural fit and the role it plays in his or her success.

Behind the numbers

Another way data facilitates diversity is by revealing the hidden factors that are standing in the way of hiring minority groups. Color-coded pie charts are powerful tools, but sometimes it's the narrative -- not the numbers -- that reveals a more compelling and accurate story.

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