Diversity Hiring: Companies Look To Startups For Help

Companies are now looking to startups for support in diversity hiring initiatives. Like the American power tools company Stanley Black & Decker, which started to look for ways to improve the pipeline of diverse candidates for various potential roles, turned to Talenya (an Israeli based startup) for help.

Pipeline problem

There has been a lack of diversity in the tech industry among employees, executives, venture capital firms and board members. And even after the recent efforts to improve diversity, there are still not enough women and people of colour in the tech industry. Previously people have said that lack of diversity is due to the pipeline problem, which means that there are not enough qualified candidates from diverse backgrounds. Now there is well established data that the lack of diversity is not due to the pipeline problem.

Many companies have come to the realization that the hiring tools they have been using so far to simplify the process of recruiting and promoting talent are not capturing the most diverse and capable applicants. It could also be a recruiting process challenge rather than a pipeline problem according to some. That’s where startups like Talenya, Textio, WayUp, SeekOut, JumpStart and The Mom Project have come into play, who have raised more than 200 million dollars over the past few years to increase diversity and inclusion in the tech industry.

You might also be interested to read: Does Workforce Diversity And Inclusion Influence Organization’s Growth?

Diversity and inclusion are two interconnected topics but they are not interchangeable. Diversity is about how an entity is represented i.e. how many different groups of people are present in that entity. Inclusion is about how well the contributions, perspectives and presence of those different groups are valued within that entity. An environment where many genders, races, nationalities are present but the perspectives of only certain groups are valued or have any authority, that group might be diverse but it is not inclusive.

A diverse and inclusive workplace is one that makes everyone, regardless of their gender, nationality or physical appearance feel equally involved and supported in all areas at the workplace. The presence of even physical diversity results in better performance. Greater overall diversity in the workforce results in higher profitability and value creation. According to 2018 research from Mckinsey, companies in the top quartile for ethnic diversity at the executive level are 33% more likely for an above average profitability than companies in bottom quartile. And companies who are in the top quartile for gender diversity are 21% more likely to have an above average profitability than ones in the bottom quartile.

Importance of diversity in the workplace

Increased chances of hiring the best talent: When you are hiring a diverse set of people, it increases your overall talent pool and improves the chances of you hiring the best talent that is available in the market. According to a Glassdoor survey, 72% women, 89% of black respondents, 80% of Asians, and 70% of Latinos have said that diversity is important to them. A significant majority of white respondents have also said that diversity is important to them. Diversity hiring is important to attract more interested and qualified candidates.

 Creativity and innovation: The companies with greater diversity are more likely to come up with fresh ideas. The most diverse enterprises in terms of migration, industry, career path, gender, education and age are the most innovative. All of these six dimensions of diversity are positively correlated with innovation, which means an increase in any of the dimensions of diversity will cause an increase in innovation and vice versa. Diverse teams are also better at identifying the products and services that will better fit the needs of the customers.

Decision making: Diverse teams are better at making decisions. According to a study conducted by Cloverpop, an online decision making platform, which examined business decisions made by 200 teams found that gender diverse teams outperformed the individual team 73% of the time and teams that were diverse in geography, gender and age made better decisions than individual teams 87% of the time.

Xerox is another firm that is using Talenya’s Artificial Intelligence software to increase diversity and inclusion in their company.  It seems that women and minorities use fewer keywords when they describe themselves in profiles or on job applications. They put in 20% to 30% less skills on their profiles. That is why startups like Talenya and Textio try to highlight the use of broader language in the job description and in the filters used to screen the potential candidates. They have also added an algorithm that can predict and add missing skills. Similar functionalities are offered by another startup called SeekOut which has raised 65 million dollars from investors which include Tiger Global, Madrona group and Mayfield. Their focus is on diversity hiring and they have a unique approach to finding talented candidates which has attracted a lot of attention.

Another startup by the name of WayUp is helping companies understand how after the screening process the funnel of candidates is narrowed into a group that is far less diverse. They have found that the pool of candidates is significantly narrowed after the technical assessment and programming tests. They believe that these tests have a high correlation to Socioeconomic status like the SATs.

Some startups like Flockjay and The Mom Project are focusing on diversity specific jobs or recruiting from a particular group of people to increase diversity in the tech industry. Flockjay helps talented people who have never considered a job in tech because of lack of network to get into the industry. It allows the non coders who have different sets of soft skills which they have developed in other industries like retail and food services to get into the tech industry. And it allows the tech industry to hire a more diverse set of employees who have different sets of skills and perspectives. The Mom project focuses on connecting women with jobs in the tech industry specifically open to employing people who meet that profile. Which is very important as a lot of women have lost their jobs during the pandemic. It’s important to fill that gap to maintain gender diversity in the industry, hence the step is to embrace diversity hiring.


  • As companies prioritize diversity, startups are trying to productize diverse hiring | TechCrunch | Jonathan Shieber | May 3, 2021
  • Why Is Diversity & Inclusion in the Workplace Important? | Great Place To Work | Matt Bush | 13 April 2021

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