Startups sell tech giants recruitment software to help solve Silicon Valley’s diversity problem

Startups sell tech giants recruitment software to help solve Silicon Valley’s diversity problem

Silicon Valley’s engineers are using homegrown technology to fix their industry’s lack of diversity, honing software to find, recruit and retain women and minorities.

Entelo Inc., Gild Inc., Piazza Technologies Inc., and newer startups such as Textio and PowerToFly Inc. are collecting data, analyzing information and sifting through social networks to find and target diverse candidates.

Like many other ventures in the industry, one company’s challenge is another’s opportunity to make money with new technology. While Google Inc., Facebook Inc., Apple Inc. and Microsoft Corp. have long touted their meritocracies, data from the companies this year showed less than a third of their employees are women, and that white or Asian staff make up, on average, 85% of their workforces. The startups are now aiming to sell services to bigger companies that are pushing to diversify their ranks.

“Everyone expects that a year from now Google will release new numbers, and people are going to expect to see improvement,” said Jon Bischke, chief executive of San Francisco-based Entelo, which has sold recruiting tools to Yelp Inc. “If they release numbers and they get worse, there are going to be a lot of ‘what the hecks?’ thrown around.”

Yelp, where only 10% of engineers are women, is using Entelo’s software to find a more diverse group of job applicants, said Arthur Yamamoto, a recruiting manager for engineering positions at Yelp in San Francisco.

“We are actively tracking down diversity candidates — whether it’s women, African Americans or Latinos,” he said. “Without a tool like Entelo it’s very difficult to find that out. We aren’t going to lower the bar, but — if we can find the best diversity candidates that meet our bar of excellence — they exist. It’s just a matter of tracking them down.”

Entelo, Gild, Piazza and PowerToFly have raised more than US$50-million from venture firms and other investors as they seek to bring more advanced technology to tackle human-resources challenges. While the startups don’t disclose sales data, Entelo said revenue has more than tripled as the company gained 40 new corporate customers in the second quarter. Pricing for access to Gild’s products start at $10,000 a year, while Entelo’s fees start at US$15,000 a year.

“Smart companies understand that if they don’t think about this pretty soon their products will be obsolete,” said Nicole Sanchez, CEO at Vaya Consulting LLC. “It used to be a moral and altruistic thing, but now it’s tied to the performance of their business.”

Entelo lets hiring managers run searches such as, “show me female Seattle-based software developers who know Ruby on Rails” (a programming language). The software sifts through sites such as GitHub, which lets coders share and store code, and uses publicly available information to determine gender, ethnicity and experience level.

San Francisco-based Gild uses public data to find candidates with compelling experience who may not have an impressive set of degrees from prestigious schools or work experience at the hottest firms, said Sheeroy Desai, chief executive of Gild.

“Everyone is fixating on gender and race and that’s important, but it is equally important to look at backgrounds because what isn’t really being talked about is socioeconomic backgrounds,” Mr. Desai said.

While many companies are focusing on the supply of candidates, changes are also necessary in the hiring process, said Virginia Clarke, a partner at Chicago-based headhunting firm Knightsbridge Human Capital Management Inc. Simply increasing the number of women and minorities who walk through the door for an interview won’t help if hiring managers don’t select them or if they are poorly managed or denied promotions after they join, she said.

San Francisco-based Get Empath Inc. makes software that tracks employees and managers, collecting data on who is doing well and who needs more help. It’s like Inc.’s customer relationship management software for a workforce, said Lola Soto, who co- founded the company with former Uber Technologies Inc. software developer Jason Roberts. While Empath isn’t focused on diversity specifically, Ms. Soto said the tool will help minorities, a cause that she says is near and dear to her as a Latina in technology.

“We will play a role in equalizing and providing more opportunities for people who are marginalized,” Ms. Soto said. “The issue is human bias and we are trying to create a tool that removes that bias.”

Textio, co-founded by Microsoft and Inc. veteran Kieran Snyder, advises companies on how to tweak and tailor job listings to increase the number of women who apply. Businesses have also asked Textio to look at issues such as performance review bias and whether interviewers select employees who succeed, said Ms. Snyder, who has a Ph.D. in linguistics. Textio has discussed a possible investment with Bloomberg Beta, an investment firm run by Bloomberg LP, the parent of Bloomberg News.

PowerToFly, which debuted in August, is betting that companies will use its services to find talent outside of Silicon Valley. The startup connects female candidates with companies, seeking out recruits in places with skilled female engineers and few job opportunities. About 2,000 women are registered on the network and the number is growing 10% each week, Milena Berry, PowerToFly’s co-founder and CEO, said.

“Companies say they want more women, but then they say we need them in our offices in New York, in Silicon Valley,” Ms. Berry said. “But supply in those areas has already been tapped out.”

Katharine Zaleski, PowerToFly’s co-founder and president, spent the U.S. Thanksgiving holiday last month in the West Bank city of Ramallah at a women’s conference, trying to sign up Palestinian women. In a photo posted on the company’s website, the blond-haired Zaleski stands amid hijab-clad women of varying ages.

Theo Burry, Hearst Corp.’s vice-president of engineering, said he used PowerToFly to hire developers for digital video apps based on Hearst’s magazine properties. He prefers a workforce operating in multiple time zones, contending that it lets the team get more work done. So Mr. Burry hired nine women through PowerToFly from places such as Bangladesh.

While technology can help address some of the diversity challenges, “all the software in the world can’t change employee and management attitudes and biases that impair diversity,” Knightsbridge’s Ms. Clarke said.

“It’s done in small steps,” she added. “There’s not some wand-waving or sprinkling of fairy dust that makes the problem go away.”

Dina Bass, Bloomberg News

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