Businesses must prioritise fostering an inclusive company culture in order to improve the professional experiences of young tech workers from underrepresented groups, according to Wiley Edge’s second annual ‘Diversity in Tech’ report.

The report is based on a survey that asked UK respondents about their perceptions of the technology industry, to establish what is currently being done to actively improve diversity in tech teams, and where more work is still required.

The report comprises responses from 2,000 18-to-24 year-olds—44% of whom were already working in tech roles—and 200 senior business leaders in key industries, including financial services, insurance and pharmaceuticals.  to establish what is currently being done to actively improve diversity in their tech teams, and where more work is still required.

When asked to describe their experience of the industry so far, 50% of respondents rated it as either ‘entirely positive’ or ‘mostly positive’, with 30% having mixed experiences and 11% describing their time in the tech industry so far as ‘mostly negative’.

Uninteresting and difficult work were cited by 10% and 13% of respondents, respectively, as factoring into their negative experience. For those who have had a more positive experience, 28% said they have enjoyed the work, with the same figure having found the work interesting. Twenty percent of those surveyed said that they like their company’s culture, while another 20% said they have felt welcomed by their colleagues.

However, one of the key takeaways from the survey was that the benefits of pursuing a career in technology remains low amongst 18–24-year-olds. Of those surveyed for the report, only 26% of respondents who are not currently working in tech said that they believe it offers excellent career opportunities, while 29% said that they think that it offers a wide range of career choices, and 24% believe tech careers are likely to be among the most futureproof.

What is driving the racial and gender talent gap?

The survey shows there is still a lot more work to be done to hire and retain diverse talent.

In comments published alongside the report, Tom Seymour, senior director of HR at Wiley Edge, said that while it’s great that half of young tech workers have enjoyed their time in the industry so far, it’s concerning that a significant proportion have encountered some challenges.

“Our findings seem to indicate that it’s not the nature of the work itself that is an issue for most unhappy young tech employees,” he said. “Instead, the research suggests that many businesses are still struggling to establish an inclusive, welcoming environment which is having a negative impact on the wellbeing of their tech teams.”

Nearly half of the young tech workers polled, 48%, have felt uncomfortable in a job because of their gender, ethnicity, socio-economic background or neurodevelopmental condition.

The report also found that women were 22% less likely to say they have felt welcomed by their colleagues than men, and 22% less likely to say they like their company’s culture. They were also 45% more likely to say they had not had enough personal support.

Eleven percent of those surveyed said that they believe the tech industry is too male dominated, rising to 19% of women.

With regards to ethnic minority employees, white respondents were more likely to say they liked their company’s culture than any other ethnic group, 23% compared to an average of 20%, respectively. Black African respondents were the most likely to say they do not feel welcomed by their colleagues, to say that they actively do not like their company’s culture, and were also the most likely to highlight the issue of a lack of role models.

In addition to creating a potentially hostile company culture, the less diverse an organisation, the bigger the gender and ethnicity pay gaps at that organisation will be, the research suggests.

However, the survey found that only 31% of UK business leaders believe they have a gender pay gap problem, despite the latest ONS data showing that about 78% of reporting employers are paying their male employees a higher median hourly wage.

And while employment rates have been rising across all ethnic groups across the last two decades, a 2021 report by PwC found that white British people earn more on average than people from almost all other ethnic groups.

Furthermore, the report found that while only 25% of businesses admitted to having a race and ethnicity pay gap problem, more than a quarter (26%) of businesses are still failing to collect data on the demographic composition of their workforce.

What should businesses be doing better?

The lack of diversity in the technology industry is not a new talking point and while recent statistics show that the dial is moving the right direction, reports such as that from Wiley Edge show there is still more that needs to be done.

The report found employers are not unaware of  diversity and inclusion issues, with 87% of businesses acknowledging the continued lack of diversity in their tech teams. According to the survey, 42% of those polled have noticed a lack of gender diversity, 44% a lack of ethnic diversity, 35% a lack of neurodiversity, and 35% a lack of socio-economic diversity.

Having a diverse workforce is not something that will happen without organisations taking active steps to reduce bias and address some of the long-standing issues that have become pervasive in the tech industry, according to the report. But when it comes to improving the hiring process and developing a more diverse talent pipeline, only 40% of businesses surveyed currently invest in anti-bias training for hiring managers, while 61% of respondents do not use deliberately neutral job descriptions. Even fewer businesses, 32% of those surveyed, currently anonymise CVs and only 38% said that they request diverse shortlists from recruiters.

However, there has been some progress. Only 4% said that they have no anti-bias hiring practices in place at all, compared with 9% in 2021, and of those that do, 88% have noticed an improvement to some extent.

Diversity and Inclusion, Hiring

Only a minority of companies who are either current SAP customers, or plan to become SAP ERP users, have completed their migration to the company’s S/4HANA system, even though support for its ECC on-premises suite will end in 2030, according to a report from digital transformation services provider LeanIX.

Just 12% of current and intended SAP ERP users responding to a LeanIX survey have completed the transition to S/4HANA, SAP’s cloud-based ERP suite that runs on the HANA in-memory database. The survey polled 100 enterprise architects, IT managers and other IT practitioners across US and Europe.

Another 12% of those surveyed said they intend to migrate, but have postponed the start of their S/4HANA transformation, and 74% of enterprises that were polled are just at the  evaluation and planning phase of their ERP transformation journey, LeanIX reports.

SAP introduced S/4HANA in 2015, expecting its existing base of 35,000 customers (as estimated by Gartner) to convert to the new ERP system.

However, SAP’s earnings disclosure show that S/4HANA has been attracting more new users rather than existing SAP ERP customers. In the last quarter of 2021, about half of all S/4HANA were new users, and for the last two quarters, 60% of S/4HANA users were new SAP customers.

Alignment among teams the biggest challenge

Almost 66% of respondents said that alignment, especially among IT teams, is the biggest challenge when it comes to S/4HANA mirgation.

“This may be due to the size of internal SAP teams: In 63% of the companies, these teams are often made up by more than 50 people,” the report reads.

Further, it states that only very few SAP teams work closely with enterprise architects, who can provide clarity about complex ERP landscapes and their dependencies within the whole software environment in an enterprise.

Only 33% of respondents termed the collaboration between the SAP and enterprise architecture teams in their enterprise as close, and 22% of respondents said that there is no collaboration between the teams at all.

Out of all of the enterprise architects surveyed, only 38% feel sufficiently involved with a transformation project, the report shows.

ERP, software dependencies pose challenges

And due to the lack of collaboration with enterprise architecture teams, almost 50% of respondents say that they see both the definition of the target architecture or roadmap and the identification of dependencies between ERP systems and the surrounding software landscape as challenging for SAP S/4HANA migration.

When asked about the level of transparency into these landscapes, only 20% of respondents said they always have a comprehensive overview or can achieve it in under one month, with 47% of respondents saying that they would need more than three months to provide an overview of all applications and systems, including all ERP solutions and dependencies, used by an enterprise.

Uncertainty over HANA transition period

Despite time for support for SAP ECC coming to an end, there is still uncertainty over the time needed for an enterprise to move to S/4HANA, according to the report.

While Gartner estimates or prescribes a three-to-five-year period as ideal for S/4HANA transition, almost 36% of respondents said that it could take more than three years, followed by 33% respondents estimating that it would take less than two years to upgrade.

However, when asked if the time currently planned for S/4HANA transition would be enough, 37% of respondents say that they would not be able to give an estimate, with 29% saying that they have not adhered to the time planned and overshot it.

Only 33% of respondents estimate that they will be able to complete the ERP transformation according to their planned schedule, the report shows.

Business IT Alignment, Digital Transformation, ERP Systems, IT Management