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SAP, HR vendors turn inward, work to increase Black employees

HR vendors are paying attention to the Black Lives Matter protests roiling a nation. They are looking at their own demographics and reevaluating their internal practices.

The nationwide Black Lives Matter protests are prompting some HR vendors to look anew at their own workforces. One of the most specific actions comes from SAP America, which also includes HR software SuccessFactors.

Last month, SAP America, which employs more than 19,000 in the U.S. and is based in Newtown Square, Penn., released a little-noticed statement, "Taking Action Toward Social Justice," that set "a new goal to double the representation of African American talent in the U.S. over the next three years."

Black employees at the firm make up 3% of its U.S. workforce, below the 4.4% average for technology firms in Silicon Valley, according to a study by the Center for Employment Equity at the University of Massachusetts Amherst. SAP America's pledge means the firm will increase that percentage to 6% by 2023. SAP America represents its German parent, SAP, in the U.S. 

SAP is "also committed to removing insensitive language in SuccessFactors products," said a spokeswoman in an email. This includes, for example, replacing the terms "blacklist" and "whitelist" from products, which some argue are a form of racial stereotyping. 

SAP America's actions may be some of the most specific steps taken by any HR vendor. But others are also taking action by looking inward, evaluating their own demographics and making changes.  

Workday Inc., often seen as a darling of the HR software market, is developing a strategy to increase its Black employee workforce, currently at 2.4%, and promises future announcements. 

Ultimate Software/Kronos set study

Ultimate Software, which merged with Kronos Inc. earlier this year, has embarked on a multiyear mission to study diversity and inclusion. 

Ultimate may have one of the most diverse workforces in tech. Nearly half of its employees are women. Minority employees make up 44% of the workforce, and, of that, nearly 11% are Black, compared to Kronos, which reports 3.1% Black employees.

Kronos and Ultimate plan to announce a new name for the combined firm in the next several months. This new entity, with about 12,000 employees and around $3 billion in revenue, mirrors Workday both in earnings and combined headcount.

Last November, Kronos and Ultimate formed a new group, the Equity at Work Council, which brings together academic and business experts to study the science behind diversity and inclusion.

Jarik ConradJarik Conrad

The goal is to develop toolkits and best practices for achieving diversity and inclusion, said Jarik Conrad, executive director of the equity council.

HR tools that look at percentages of women and pay equity are plentiful. HR managers can also utilize qualitative measures, such as investigating, "How does it feel to be a person of color working in [a specific] organization? Do you feel engaged, do you feel like you have the same opportunity for growth?" Conrad said. But Ultimate Software and Kronos want to bring this qualitative and quantitative data together.

An organization may have won awards for diversity and inclusion, "but when you interview somebody who works there, they say they feel isolated, they don't feel necessarily included," Conrad said. The newly merged HR vendor wants to find ways to close that gap, he said. 

No vendor standards on workforce data

HR vendors vary in the amount of data they report. Some report the representation of minorities in management ranks; others do not. When Ultimate was asked for diversity data, it provided a link to Fortune's most recent "100 Best Companies to Work For," an annual ranking that includes a breakout of employee demographics. 

Conrad believes that HR organizations "ought to be as transparent as possible," but more than that, they need to show how they are making progress, he said. 

On its website, Oracle reports its workforce at 31% female and 3.7% Black. Earlier this month, R. Andre Klein, a shareholder, filed a lawsuit over the diversity of its board.

"The Board, as well as the Company's executive officers, remain devoid of Black people and other minorities," the lawsuit states. It seeks several changes, including the resignations of several Oracle board members prior to the firm's November annual meeting. Oracle declined to comment. 

ADP is evaluating its disclosures

ADP LLC publishes workforce demographics but doesn't break them out by race. It reported a U.S. minority workforce at 37% in 2018. The way it reports its data could change, the firm said.

"We fully agree that transparency in reporting is critical to an organization's diversity and inclusion programs, in addition to utilizing HCM solutions to drive successful implementation of these programs," said Dana Casalino, a spokeswoman, in a statement. The company continues to assess its "Corporate Social Responsibility" report. "We are currently in the process of evaluating the evolution of our disclosure," she said. A new report is due this fall. 

Even HR vendors that cite a need to improve their Black employee representation can still make Fortune's "100 Best Companies to Work For" list as well as its "100 Best Places Workplaces for Diversity." Workday and SAP America are two examples of that.

Michael BushMichael Bush

Data analysis for both lists is done by the Great Place to Work Institute, Inc. In April, Michael Bush, CEO of the people analytics firm, was appointed to Workday's board of directors. Workday is ranked fifth in Fortune's "Best Companies to Work For" list, but the firm said, at the time of Bush's appointment, it will no longer participate in the Fortune rankings. 

The representation of minority and gender is only one factor in the Great Place to Work Institute's measures. The firm analyzes the experiences employees are having, including financial performance, leadership effectiveness and other metrics. 

We measure whether you enjoy the people that you work with.
Michael BushCEO, Great Place to Work Institute, Inc.

"We measure whether you enjoy the people that you work with," Bush said. "Whether you have pride in the workplace, which comes from whether the people that you work with care about you and you care about them." 

Bush sees its metrics as a catalyst for change that continues to evolve. It changed its methodology in 2016 to consider whether all demographic groups at a firm had the same experience. That change prompted some firms to exit the "Best Places" ranking process due to issues around promotions and salary, mainly among female employees, he said.

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