How AI in HR Will Close the Gender Pay Gap
In our global economy, the path to pay equality between women and men is crawling, but AI-powered technology may be the answer to closing the gender wage gap.
Despite the female charge for equality throughout the last few years, the last decade showed the slowest rate of progress in reducing the gender pay gap since 1979. In fact, according to the World Economic Forum, at this rate, the pay gap will take another 202 years to equalize. While this data is valid in many ways, there is a major factor not included in these estimates: the advancement and implementation of technology that has the power to close the gap by removing human bias from the process. **Technology isn’t the most obvious tactic to help close the gender pay gap, but it is the practical answer that both CHROs and employees are looking for.**
While women in the workplace must still fight for equal pay, AI may be the factor that pushes employers toward actually creating equilibrium. As of 2019, there’s no country, state or industry in the world that has achieved complete gender pay equality, and AI can provide a global solution. Let’s take a look at few ways that AI-powered technology will help eliminate the gender pay gap and create a more equal society.
Eliminate Unconscious Bias
Nearly half (48% percent) of US workers believe men get paid more than women at their company. This is a startling number showing just how little faith employees have in their employers to create a fair compensation program. There have been increasing state regulations that have attempted to take unconscious bias out of the pay equation—for example, 11 states have adopted laws prohibiting an employer from asking for a candidate’s pay history to use as a base for his or her salary. While this is a step in the right direction from lawmakers, there are still many areas of unconscious bias that must be addressed, and AI can contribute vastly in this area. AI-powered tech can assist hiring managers and CHROs in creating pay equality through data: measuring trends and predicting employee performance metrics through various stats including education, experience, and certifications, but omitting gender (and other factors such as age, race, and more). This allows employers to treat compensation as a formula, rather than using emotions, and likely unconscious bias, to make decisions.
Also Read: 8 Ways AI will Enable the Future of Work in 2019
Create Transparency in Compensation Through Reporting
When it comes to pay equality, it’s important to understand that simply paying female employees more money isn’t a fully satisfying conclusion. Workers, both female and male, want to understand that their compensation is fair, and one way HR leaders can initiate that change is through payment reporting. More than ever, employees are comfortable talking to their colleagues about their salaries— 46% of workers say they have shared their salaries with colleagues— and are creating this transparency among their cohorts. However, this version of transparency can lead to more upheaval and hearsay without the involvement of HR managers to provide the knowledge and data necessary to show workers where their pay structures come from.
AI-powered technology is an answer to creating pay transparency that comes directly from the employer rather than from colleagues. Leveraging predictive analysis to publish corporation-wide reports detailing the salary and cost of living benchmarks allows employees to have another level of visibility into the company’s compensation strategy based on organizational goals and outside economic factors. This transparency not only helps to alleviate the gender pay gap by providing a basis for what an employee should be paid but also creates a greater sense of trust and fairness between the employee and the company, resulting in higher retention and productivity.
Also Read: 3 Ways Workforce Analytics Can Help Improve Diversity
Personalize Compensation Packages
With the current workforce spanning five generations, according to Pew Research, there is a wide variety of desires when it comes to compensation packages; even between men and women of the same generation, there is often a discrepancy in values. AI and predictive analytics gives businesses information that better aligns with specific employees’ values and expectations. For example, women may place a greater emphasis on workplace flexibility; according to Werk, 70% of women who dropped out of the workplace said they would still be working if they had flexibility. AI-powered technology can help identify employees who may need an incentive boost and match them with the benefits that provide the highest individual value. For a millennial worker that value might be time (e.g., flexibility such as work from home or flex hours), and for a baby boomer that value may be a higher 401K match.
These unique compensation methods predicted by AI aren’t traditionally thought of as a way to equalize the gender pay gap, but when coupled with transparency and the elimination of unconscious bias, they help set a precedence of formulaic fairness that will continually help close the gap. With these tactics in mind, how will you and your organization change your policies and compensation processes to help close the gender pay gap?
