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How much money do US companies spend (individually) on diversity & equity training, software, management, etc. each year?
To tackle gender bias, ethnicity and other types of workplace bias, many companies in the US, are investing in an array of new software options and diversity programs. With research bodies like McKinsey & Company stating that organizations that are ethnically and gender diverse overtake those that aren’t by 50%, it is no wonder that most seek outside help to make their workplace more inclusive. This has led to the emergence of bias-neutralizing software to use in managing workplace diversity. However, after an extensive research, we confirm that there are no preexisting sources with quantitative data on the money a US company spends on diversity software. On the other hand, last year, Intel set aside $300 million to manage diversity and inclusion in its workplace. As requested, we also undertook to find statistics on how much money individual US companies spend on SaaS software and on HR software. The short answer is that there are no precompiled sources to address this, so we have triangulated figures instead, as available.
DIVERSITY SOFTWARE AND MANAGEMENT
There are no precompiled sources online that discuss the price per user that companies would be willing to pay for diversity software. According to Workforce Management, companies in the US spent roughly 8 billion on diversity, but none of that money went to diversity software. For example, in 2016, Intel set aside $300 million to support diversity and inclusion in the workplace.
Findings from the job site Glassdoor states that 35 percent of hiring decision-makers in the U.S. expects to spend more on diversity and inclusion programs in 2018, while the remainder will continue to invest at the same level. These statistics illustrates the need to manage diversity and inclusion in the workplace.
SOFTWARE AS A SERVICE (SAAS)
In 2017, the worldwide spending on enterprise cloud services was $128 billion. The U.S. accounted for 60 percent of this spending globally. Two-thirds (Sixty percent) of cloud spending by companies in the U.S. came from Software as a Service (SaaS). In addition, Gartner records that companies in the U.S. spend 19 percent of their IT budgets for analytic Software as a Service (SaaS) applications.
Cleanshelf.com estimates that in 2017, a 200-person start-up spent around $2,036,000 on Software as a Service (SaaS) in the U.S.
Calculation:
Companies in the US are collectively spending $76.8 billion (60 percent by $128 billion) on cloud services, but only $46.08 billion (76.8 billion by 60 percent) on Software as a Service (SaaS). This is because the US accounts for 60 percent of enterprise cloud services spending globally, with two-thirds (60%) of cloud spending coming from SaaS.
However, this does not give us the money individual companies spend on Software as a Service per employee. An important finding from ROI consultancy, Alinean Inc. states that a midsize company and a large company in the U.S. spends $13,100 and $11,580 per employee on IT. As earlier indicated, companies in the U.S. spend 19 percent of their IT budgets on analytic Software as a Service (SaaS). Therefore, a midsize company will spend $2,489 (19 percent by $13,100) on SaaS per employee while a large company will spend $2,200 (19 percent by $11,580).
We can, therefore, deduce that an individual company in the US would be willing to pay approximately $2,200 to $2,489 per employee for diversity (analytic) software.
HR SOFTWARE
Deloitte’s most recent report found that nationally, companies spent between 5 – 8 percent of their HR budget on HR software. But, because there are no sources online to enable us to triangulate the money individual companies spend on HR software per employee we availed helpful insights as below.
Prices for human resource software vary so much; however, there are three pricing models to help you determine a range of prices to charge for analytic software:
• Pay per employee/per month pricing model: In this model, you charge based on the number of employees in an organization, “whether they use the software or not.” Prices range from “$1-$10 per employee per month.”
• Pay per user/month: In this model, only the users of the software are charged. Prices range from “$5-$20 per user per month.”
• One-time payment: In this model, you charge a lump sum payment upfront based on the required features. Prices range from around $500 to $100,000.
Lastly, there are no preexisting sources that show the price per user that companies would be willing to pay for diversity software. So we used triangulated data from sources addressing SaaS to deduce that an individual company in the US would be willing to pay approximately $2,200 to $2,489 per employee for diversity software. These are only estimates and not actual figures based on the data we found.