Predictions 2021: Diversity, Equity, and Inclusion

Demands for data transparency will drive new accountability in diversity, equity, and inclusion

Organizations have been talking about diversity for years, and many have implemented diversity programs, business councils, resource groups, and similar initiatives to facilitate compliance and branding—with varying degrees of success. Recent disruptions, however, from the pandemic to social injustice, have highlighted inequities that continue to tarnish the workplace. In addition, data generated from the continued proliferation of workplace technologies has brought an increased focus on conscious and unconscious bias. Workforces, markets, and regulators know this data exists, and they’re demanding transparency and action from organizations to bring about wholesale and lasting change.

In 2021, we predict more and more workforce-related data will be forced on display and scrutinized in an increasingly transparent fashion, and organizations must prepare to be transparent and accountable in their decisions and practices around diversity, equity, and inclusion (DEI).

A More Equitable Workplace

As workplace technologies continue to generate and capture data points to help achieve outcomes, organizations are turning this data into insights that drive guidance, recommendations, and actions to shape hiring, development, and management practices. Amid calls for increased justice and equity in our society, organizations have an opportunity to use this data transparently to identify and address bias—and its consequences—in their workforce practices.

Perhaps one of the most acute examples of the need for transparency is in compensation. Multiple studies draw a connection between perceptions of fairness around pay and critical workforce-related topics like employer brand, employee engagement, and workforce wellbeing. In terms of median hourly earnings, Black men with a college degree earn 78 percent of what similarly-educated white men earn for the same work. Black women earn 92 percent of the wages of similarly-educated white women.¹

Research also identifies a correlation between women experiencing compensation inequity and serious health issues such as anxiety and depression. As a result, stakeholders and workforces around the world are demanding more transparency around compensation to drive increased equity and fairness.²

Hiring, succession, promotions, performance management, and employee-experience data are also subject to calls for disclosure. Employers are seeking more and more data insights on the racial and cultural demographics of their workforce, accounting for a significant increase in searches related to racial, cultural, and gender-based demographics.³ In addition, data held in enterprise IT systems, such as employee case management and various communications technologies, are discoverable in employee relations, legal, or regulatory contexts, adding pressure to focus on organizational ethics and transparency.

The Accountability Demand

The pressure for accountability is not a reason to find ways to protect against transparency and disclosure. In fact, the evolving demand should motivate organizations to increase focus on transparent and ethical leadership and data management. Transparency will likely become unavoidable, and organizations will accelerate the use of AI, data and behavioral science tools, and nudges to help their people make and demonstrate more informed talent decisions. 

AI should be embraced as part of the talent equation, or “superteam,” but not without caution.⁴ The algorithms that drive AI—including the parameters for machine-learning applications—are created by humans and thus are also subject to conscious and unconscious biases. The majority of these AI solutions are based on these “supervised learning” algorithms—and must be continually audited and managed by their human super team members. Without a deliberate and continuous effort to remove bias from AI and the algorithms that drive it, new biases can emerge unchecked that may lead to unforeseen problems. Organizations should examine their end-to-end talent lifecycles to identify the areas most prone to bias (e.g., resume screenings, performance management, internal mobility, promotions) with predetermined goals to use as audit parameters for the algorithms.⁵

Looking Ahead

Inertia is not an option. In the coming year, organizations will face more pressure to be transparent regarding their DEI practices. Leadership must make progression and pay-equity analytics public—and make the case to CEOs and investors to make any necessary adjustments. To start, organizations should:  

• Evaluate pay gaps. Assess pay inequities to understand why they occurred in the first place and employ a holistic strategy to address their root causes (e.g., systemic underemployment and discrimination differences in underrepresented minorities, especially people of color, that have resulted in issues around compensation including variable, promotion-related pay increases).
• Reflect workforce demographics. Examine hiring decisions and processes to help improve the recruitment of diverse candidates. Take steps to retain diverse employees within the existing workforce, such as reducing bias in promotion decisions, providing mentorship and sponsorship efforts that strengthen networks, and increasing representation of women, people of color, and other underrepresented minorities through development and promotion.
• Explore behavioral-science opportunities. Nudge decision-makers at the right times with the right information to inform decisions (e.g., examining a full review period rather than only recent actions when measuring performance; leveraging equitable hiring and developmental assessment approaches to improve the identification of diverse, high-potential talent).

Systemic transformation in any form can address old problems, but it almost always generates new or different work and challenges. Value propositions, needs, disruptions, and demands will continue to evolve. Organizations should ask the following questions:

• What might the workplace look like when this prediction comes true?
• Do we have the sensing and scenario-planning in place to anticipate and prepare for what comes with this kind of transparency and accountability?

Authors:

Chris Havrilla - Vice President, HR Technology & Solution Provider Strategy Research Leader

Erin Spencer - Senior Research Analyst, Solution Provider Market

Janet Clarey -  Manager, Lead Advisor

Jeff Mike, EdD - Vice President, Head of Research & Insights

Endnotes

¹ Support your Black workforce, now: Practical ideas for organizations and leaders to take action, Deloitte Consulting LLP, 2020.

² 2020 Global Human Capital Trends: The social enterprise at work—Paradox as a path forward, Deloitte Insights, 2020.

³ “People-Centered Initiatives, Business Agility Take Center Stage in 2021 Workforce Trends,” ADP, November 19, 2020.

⁴ 2019 Global Human Capital Trends: Leading the social enterprise—Reinvent with a human focus, Deloitte Insights, 2019.

⁵ Demystifying Artificial Intelligence in HR: A Primer, Deloitte Consulting LLP / Chris Havrilla and Charu Ratnu, 2019.