As companies prioritize diversity, startups are trying to productize diverse hiring

When the iconic American power tools company Stanley Black & Decker began looking for ways to improve the pipeline of diverse candidates that the company was reviewing for potential roles, it turned to an Israeli-based startup called Talenya for help.

The company wasn’t alone in looking to startups for support in new hiring initiatives. Last year’s social reckoning that occurred in the wake of nationwide protests against systemic racism triggered by the murder of George Floyd pushed companies around the country to reassess their own role in perpetuating inequality.

As part of that assessment, companies came to the realization that the hiring tools they’d been using to simplify the process of recruiting, cultivating and promoting talent weren’t capturing the broadest and most capable applicants.

“If we want to claim that it’s a pipeline issue, we would first have to claim that we’ve hired what is available in the pipeline,” Uber Chief Diversity Officer Bo Young Lee told TechCrunch. “It’s not a pipeline issue as much as it is a recruiting process challenge.”

That’s where tools like Talenya, Textio, TalVista, WayUp, Handshake, The Mom Project, Flockjay, Kanarys, JumpStart and SeekOut have come in. All told, these companies have raised more than $200 million in financing over the past few years to increase diversity and inclusion and help solve tech’s diversity problem.

“Part of our diversity, inclusion and belonging strategy focuses on having a diverse pipeline to ensure incoming talent better reflects the markets and communities we serve. To accelerate our progress, we started using Talenya’s AI software in 2020 to help increase the candidate pool of women and people of color,” said Suzan Morno-Wade, EVP and chief human resources officer at Xerox, another company using Talenya’s software, in a statement.

It seems that women and people of color use fewer keywords and are less effusive when they describe themselves in profiles or on job applications, according to a recent study published by Talenya.

That’s why startups like Talenya and Textio try to highlight how to improve the screening process for candidates by using broader language in both the text of the job description (Textio) and in the filters used to select qualified candidates (Talenya).

“Keyword search is highly discriminatory to everyone,” said Talenya chief executive and co-founder Gal Almog. “Minorities and women tend to put 20% to 30% less skills on their profiles. That applies not only to women and to minorities. We added an algorithm that can predict and add missing skills.”

In some ways, that functionality seems a lot like tools on offer from companies like SeekOut, the recruiting startup that just landed a whopping $65 million round from investors including Tiger Global, Madrona Group and Mayfield.

“The focus on diversity hiring and our unique approach to finding the talent and offering blind hiring features has super charged the adoption,” chief executive Anoop Gupta said in an interview earlier this year. That same toolkit is something that Talenya pitches its own customers.

Meanwhile, businesses like WayUp are attempting to give employers a window into how the funnel narrows after the screening process. The company’s new tool provides an assessment for how diverse applicant pools are slowly winnowed down to a group of candidates that is far less diverse through the testing process.

WayUp co-founder and chief executive Liz Wessel said that the pool of applicants often narrows significantly after a battery of technical assessment and programming tests.

“Similar to the SATs, many technical assessments have high correlation to socioeconomics status,” Wessel told TechCrunch.

While some startups focus on the hiring process itself, other companies are taking approaches to diversify-specific jobs or to try to recruit from particular talent pools to help increase diversity in the tech industry.

That’s the mission that companies like Flockjay and The Mom Project have set for themselves.

“Most people don’t even know that a job in tech sales is even a possibility,” Shaan Hathiramani, the founder and chief executive of Flockjay, a company offering a tech sales training curriculum to the masses, said earlier this year.

Hathiramani said his startup could be an on-ramp to the tech industry for legions of workers who have the skill sets to work in tech, but lack the network to see themselves in the business. Just like coding bootcamps have enabled thousands to get jobs as programmers in the tech business, Flockjay helps talented people who had never considered a job in tech get into the industry.

It’s a way for non-coders to leverage soft-skills they’d developed in other industries, including retail and food services, to jump into the higher paid world of tech companies. And it’s a way for those tech companies to find a more diverse pool of workers who can bring different skill sets and perspectives to the table.

A few hundred students have gone through the program so far, Hathiramani said, and the goal is to train 1,000 people over the course of 2021. The average income of a student before they go through Flockjay’s training program is $30,000 to $35,000 typically, Hathiramani said.

Upon graduation, those students can expect to make between $75,000 and $85,000, he said.

It’s obvious that tech needs to “do better” on inclusion, and The Mom Project — a Chicago startup that focuses on connecting women, including parents, with jobs from organizations specifically open to employing people who meet that profile — is one company tackling an aspect of the problem that’s become acute in the pandemic.

“Sixty percent of the job losses in the pandemic have been women, and the statistics have been even worse for women of color,” said Mom Project chief executive Allison Robinson. “It’s like a canary in the coal mine.”

While The Mom Project doesn’t have any tools today to surface candidates that meet more diverse profiles on that front, Robinson told TechCrunch that they are considering it and how to approach that in a way that works.

Ultimately these are considerations that matter for companies of any size, according to Bain Capital Ventures managing director, Sarah Smith.

“No matter what, it’s important that from day one [that] you have an eye on how to build an inclusive culture, where in an ideal world, even that first person you’re bringing onto the team could walk in and feel fairly welcomed. And… you really want people to bring their best selves and they bring their perspectives and their ideas,” Smith told the audience at TechCrunch’s Early Stage Conference. “I think it’s pretty common that a team might grow to like four or five from within the network, including the founders, [but] I think once you get to like number six, if you don’t have some type of gender or racial diversity yet… it’s gonna start to get really tough.”