AI and Analytics: Employers Explore New Strategies for Diverse Talent

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August 10, 2022


Over the last tumultuous years, many companies have increased their focus on embedding diversity, equity and inclusion (DEI) in their business practices.

But even as a growing number of businesses report having a DEI policy in place, 21 percent of U.S. companies say one of their biggest challenges remains translating their DEI objectives into actions to reach diverse candidates.

At the same time as employers search to gain a competitive edge to identify, attract and retain diverse talent, job candidates are demanding more from hiring organizations. “Applicants are judging companies more holistically,” explains Ashton Holt, associate partner, Human Capital Solutions at Aon. “They’re getting a good feel for a company’s moral compass through the communication that is shared externally.”

Signaling values is no longer enough: a successful DEI hiring plan involves thoughtful messaging, a robust set of assessment tools to drive strategic recruitment and an analytical approach to data.

In Depth

DEI is not only a critical part of internal workforce operations — it’s also a vital part of an organization’s identity and expression of values.

“DEI should be an integral part of your whole human capital strategy,” says Kate Cramer, lead of global performance and analytics at Aon. Cramer adds that DEI staffing is not a standalone effort, but a critical part of aligning people management with overall business objectives. “It’s an important part of your workforce strategy, but it can be a risk to just view DEI as a strategy in its own right. It’s interlinked with your whole employee life cycle.”

Job seekers have become aware and savvy at locating data sources to research companies before deciding whether or not to apply or accept an offer. As a result, it’s even more imperative that employers not only express their commitment to diversity, but also demonstrate how the company successfully cultivates an inclusive workforce underpinned by a culture that fosters belonging.

More companies are publicizing their environmental, social and governance (ESG) commitments, and potential talent can easily find this information online and make informed decisions about employers.

Leading with a Meaningful Message

To attract the best and most diverse talent, employers must be mindful of their public image and how they express their DEI commitments. “Tone from the top is critical,” Cramer says. “You need that sponsorship to activate your entire organization around these goals.” Cramer explains that to show how DEI values are embedded throughout a company, leaders must consider their business’s governance practices and board disclosures, and apply a DEI lens to all their human capital.

Today’s applicants are looking for this level of specific commitment, including company DEI metrics and proof of progress. Even ESG reports and public information about a company’s DEI practices don’t address all of a potential hire’s needs. Cramer notes that candidates are asking for evidence of a company’s actions, diversity in leadership and a supportive workplace culture. “It goes beyond the sourcing and the recruitment process into the realm of your reputation,” Cramer says.

Driving Change with Data

Artificial intelligence (AI) and data science is transforming staffing — and giving employers new ways to identify key data that can help them improve their people strategies. “They’re using high-end analytics to try to whittle down the pool of applicants to get the right sort of candidate,” Holt says.

Though employers must abide by regional policies — such as the EU’s General Data Protection Regulation — they can still use workforce data to improve approaches to diversity recruitment. “Getting the right data is really the important foundation,” Cramer says. “Using it in the most effective way and applying the best analytical tools to derive the correct insights is where the real power comes.”

Some companies and candidates may have reservations about the potential for bias in AI-assisted staffing. Holt explains that AI can parse many elements of data — if provided by the applicant — including factors that should be relied upon such as race, ethnicity, gender, sexual orientation, disability and veteran status. “There’s constantly a focus on ensuring that decisioning technology is not designed or deployed in a manner that could lead to inequitable use or produce adverse outcomes for diverse candidates.” Holt also notes the importance of an objective and impartial review of algorithms, parameters and data by experts who don’t actively participate in staffing. “You need someone that’s outside of the recruitment process and selection decision to assess applicant funnels and provide guidance.”

AI and analytics may help companies build more diverse, equitable and inclusive workplaces by identifying areas for improvement in employment policies and recruiting practices. “AI-enabled interviewing tools are proven to be far less biased than humans,” Cramer says. For example, applicant tracking systems can help companies identify gaps in their recruiting strategies related to DEI. Employers can also use analytics to identify where diverse candidates may fall out of the staffing process, in addition to getting more detail about other employment practices creating unintended barriers such as advancement, attrition and retention. “This is an even more effective way of ensuring that the process is fair.”

Recruiting in a Remote Environment

The move to hybrid work environments or full-time remote positions has changed the geographical scope of the recruitment process. “More emphasis on things like location and labor market analytics to really understand where the talent is across the U.S.,” Holt says, adding that companies are changing their search criteria to reach a larger pool of diverse job seekers. Some employers are also hiring diversity-focused search firms and considering transferable skills for applicants who may not have industry or job-specific experience.

To attract diverse talent, companies are also letting applicants know that they’re flexible when it comes to location. “It’s really giving those in different circumstances an opportunity to find work somewhere progressive that allows a more flexible work schedule or for the employee just to work from home,” Holt says, noting that industries that previously did not encourage work-from-home arrangements — such as retail, oil and gas and construction — are rethinking their policies so they can draw top talent in a competitive hiring environment.

Though remote work options can be an asset in recruiting, Cramer notes the potential for employees to feel disconnected in remote environments. Companies are beginning to assess the effect of this in terms of DEI initiatives to ensure certain groups are not disadvantaged by remote work.

Taking a Unified Approach

Companies can benefit from a variety of resources when it comes to embedding DEI commitments in their human capital practices. Combining analytics with insights and guidance can help organizations build a framework for understanding DEI data and implementing change. Holt explains that not all companies know how to find the right comparative data within their fields. “That kind of information is not just floating out there. Although the government has data, but very limited.” An outside organization may be able to help businesses identify and make sense of DEI data.

Not only do companies need to access data, they also need data to support their ESG narratives and strengthen their external messaging. “Communication again is absolutely critical: it’s important for firms to position their message appropriately as they’re responding to pressure from regulators and other stakeholders, including investors, employees, clients & their communities,” Cramer says, adding that creating appropriate DEI messaging can help companies clarify their stances and protect their reputations.

Turning Strategies into Action

To attract and retain skilled, diverse talent, organizations must make an ongoing commitment to supporting DEI at all levels of their people strategy. This requires a forward-thinking approach to hiring, retention and progression in the age of remote work, including awareness of the ways offsite or hybrid work can impact the size and success of a diverse talent pool.

Companies can also leverage developing technology — including AI and applicant tracking systems — to reduce bias in hiring. Effective messaging can help to align these strategies with specific DEI goals, giving businesses the insight required to communicate their values effectively and accurately to diverse, highly skilled applicants. “You want to make sure that you control the narrative at the end of the day and not let others control it for you,” Holt says.