The HR process is filled with bias, and SAP is selling tech to change that

When everyone looks the same, it’s bad for business.
When everyone looks the same, it’s bad for business.
Image: Camay Sungu/Reuters
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In an effort to recruit more diverse workforces, companies have hired chief diversity officers, set solid goals, and installed new policies that aim to curb bias. One of the largest enterprise software companies in the world is making a case that technology can help, too.

SAP last year committed to building software capabilities that “improve workplace diversity.” Within the coming months, it plans to add two new anti-bias features as options in its HR software suite, which is used at 6,200 companies to manage processes such as recruitment, performance reviews, and payroll. 

One of the new features, which will pilot with a small number of customers starting in August, scans job descriptions for words that are more likely to appeal to men, such as “competitive,” “hero,” and “we want only the best,” and recommends words to replace them.

The other new feature, which SAP plans to pilot by the end of the year, will alert managers when they make potentially biased decisions. Companies will have the option to set rules for their organizations, such as triggering a notification when a woman who has previously been rated highly gets down-rated after they take a leave of absence (which could be indicative of bias against women who take maternity leave) or if someone who has been rated highly consistently for years has been overlooked for promotions. 

SAP has also added optional tweaks that aim to reduce bias, such as a photo-less view of employees within a performance review feature and has published instructions for how to use currently available features in a way that promotes diversity and inclusion. 

By marketing HR software as a tool for fighting bias, SAP is making a bet that diversity and inclusion features will become bigger decision-making criteria for its customers. “We’re talking to a new potential customer here, a chief diversity officer, whose money tends to go to education, not software,” says Patricia Fletcher, a solutions manager at SAP, adding that today, “[chief diversity officers] are still not really at the table [for the decision of purchasing HR software], and if they are, they will be an influencer, not the decision-maker.”

Some believe the influence of diversity and inclusion goals in purchasing decisions will grow. Analysts at Gartner predicted in a March 2017 research note that by 2020, more than 75% of large enterprises will include features that promote diversity and inclusion in their selection process for HR software.

John Kostoulas, a co-author of the report, told Quartz that companies have historically monitored diversity mainly to avoid breaking anti-discrimination laws, but he believes that they will take a more holistic approach as evidence continues to build for the case that diversity contributes to businesses in other ways.

Research has shown that the vast majority of CEOs at companies with formal diversity and inclusion programs believe those programs add to the bottom line, that business success positively correlates with diversity, and that positive changes in diversity have corresponded with increases in sales. ”More diverse companies, we believe, are better able to win top talent and improve their customer orientation, employee satisfaction, and decision making,” wrote McKinsey while presenting research that shows companies in the top quartile for racial and ethnic diversity are 35% more likely to have financial returns above their respective industry median.

“When the issue is compliance,” Kostoulas says, “the CEO is not getting involved. If it is about business performance, then it’s something a CEOs would like to get right.” While some HR software companies have developed diversity and inclusion features focused on specific areas, such as recruitment, he says that no HR software company has created “a horizontal proposition to say, look guys, diversity and inclusion spans across all of the business processes–performance, compensation, so on.”

This is the hole SAP is trying to fill, though at the moment the effort amounts to little more than an ebook about how to reduce bias using SAP tools and a handful of features on a product roadmap. SAP executives said they planned to add features across the entire suite of products. “This project doesn’t have an end date, so to speak,” says Fletcher. “We really believe that this is the new way of doing HR. This is how we plan to develop our solutions from here on out.”