By Elizabeth Coston McCluskey and Tasha Seitz
The nature of work is fundamentally changing as technology starts to displace jobs and traditional, linear career paths become a thing of the past. A 2017 McKinsey study estimated that 6 out of 10 occupations had at least 30% of activities that could be automated, and that 400–800 million workers could be displaced between now and 2030. The transition is happening rapidly, which means new tools are needed to effectively hire and manage talent. While education and work experience have historically been the primary indicators of potential success within a job, it is difficult to rely upon them to identify “best fit” jobs outside of traditional career paths, and they are prone to implicit bias.
Diversity matters to performance: another McKinsey study suggests that companies with strong gender diversity are 15% more likely to outperform their peers, and those with strong racial and ethnic diversity are 35% more likely to outperform. However, most companies struggle to increase the diversity of their workforce, and artificial intelligence-based tools that use existing hiring practices and patterns may exacerbate the problem by incorporating humans’ implicit biases into algorithms.
Solution
Plum provides an affordable, scalable technology-based platform to assess the potential of candidates and employees and match them to job opportunities where there is a strong fit, thus improving their likelihood to be successful in the role and increase their potential for future advancement. Unlike alternative solutions that may embed implicit bias into algorithms, Plum’s evidence-based assessment evaluates an individual’s talents based on the Big Five personality traits. Talents are not previously demonstrated skills, but innate strengths, which enable Plum to match individuals to the environments and job roles where those strengths will be highlighted and lead to greater success and realization of that individual’s potential.
In addition, Plum’s platform also enables hiring managers and teams to assess job roles on the platform, defining the types of strengths and talents that the roles require. This is an important element of Plum’s ability to create good matches, by collecting and reflecting the expectations and priorities of the hiring team and enabling the teams to reassess their needs dynamically as roles and business environments evolve. By providing a low-cost platform that can scale to every existing employee and job candidate, Plum has the potential to improve performance and retention as well as drive increasing diversity and open up career advancement opportunities to individuals that might not otherwise be considered.
Why We Invested
The opportunity for talent management is a large one, with the market approaching $8 billion and growing at 18% per year. Plum has proven its value both through validating its assessment tool and through deployment at several dozen employer customers that can point to improvement in retention and diversity. The company has been selected by SAP.io as one of two partners in talent assessment that they will sell through their North American sales channel, and by Deloitte, which will be incorporating Plum’s platform into its emerging leaders program to identify and develop rising talent at client organizations.
In evaluating companies that seek to increase diversity, equity and inclusion in the workplace, we often struggle with the self-selection bias: those companies that care most about DEI are the most likely purchasers, therefore the incremental impact is not as great as for companies that don’t recognize or prioritize the issue. Because Plum leads with with employee performance and retention as a primary business value proposition, we’re excited about their potential to drive increasing diversity at employers that might not otherwise purchase a DEI-specific platform.
Impact
We see two primary drivers of impact:
Economic empowerment: if individuals are matched with job roles that are best suited to their innate strengths and talents, this should lead to better performance, increased retention and improved career advancement, which should lead to greater earnings over time. As an initial proof point, one customer case study showed annual employee turnover decreased from 30% to 6%, which benefits both employer and employees. In this example, the Plum platform proved to be such a strong predictor that the company decided to eliminate resumes from the hiring process altogether.
Diversity: if Plum is used at the top of the funnel to identify best-fit candidates, it should reduce the negative impact of implicit bias in the hiring process and lead to an improvement in the diversity of candidate pool. The same is true in identifying and developing emerging, high potential leaders within a company. In another customer case study, the use of Plum in a company in the traditionally male-dominated construction industry led to the percentage of women increasing to 25%, as compared to an industry average of 9%.