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How the Fourth Industrial Revolution Can Address Gender Pay Equity

This is part one of a two-part series. Read part two here

There is an unprecedented technological transformation taking place today.

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It’s a period of exponential change labeled the “Fourth Industrial Revolution” (4IR) with technologies, such as artificial intelligence, augmented reality, robotics, neurolinguistic programming (NLP), sentiment analysis and 3-D printing changing the way that humans create, exchange and distribute value. Some commentators anticipate this period could present a timely opportunity for a rebalance of the inequity that exists in our societies, moving toward a more inclusive, human-centered future together.

When considering gender pay gaps that exist globally and the slow pace at which we are progressing to earnings parity, is there also an opportunity in this new era to address the way work is structured? Specifically, along the gender boundaries and systemic issues that drive pay inequity?

New Technologies Can Drive Cultural Change
As they are in other areas of business, progressive leaders are looking to harness the converging technologies of 4IR to help drive the cultural change required to eradicate bias. These leaders recognize that a strong record on equality and inclusion converts to increased employee engagement, improved customer orientation, more innovative decision making and ultimately, enhanced business performance. At the same time, a new diversity and inclusion (D&I) technology market is emerging to help address diversity challenges across the employee lifecycle by creating consistent practices, simplifying complex decisions (particularly at scale) and tracking outcomes more effectively.  

In fact, analysts are now starting to focus on D&I solutions as a discrete category within the HR tech space. A report from Mercer and Red Thread Research currently estimates the overall market size to be approximately $100 million. In the post #MeToo era, Vantage Point is a prime example of leveraging new technology to address D&I challenges —  it provides an anti-sexual harassment training approach for corporations using virtual reality. It solution works on the premise that you don’t need to explain what it’s like to be the elephant in the room, but rather feel the elephant in the room, and tie that to an action your employees can take at that moment.

But there is a darker side to this innovation, particularly around the risk of bias in AI, which often relies on data collected and algorithms created by humans. So, in today’s male-dominated IT sector, where according to a World Economic Forum’s report less than a quarter of AI professionals are women, this remains a real risk. We saw this play out with Amazon’s gender-biased recruiting algorithms, which discarded competitive female candidates for roles after learning that the percentage of women in those positions was lower. 

Similarly, in the book Invisible Women: Exposing Data Bias in a World Designed for Men, Caroline Criado Perez highlights the presence of widespread male bias in science, technology, engineering and math (STEM). Through her work, we learn that most offices are five degrees too cold for women because the 1960s formula to determine temperature used the metabolic resting rate of a 40-year-old, 154-pound man, without accounting for women’s slower metabolisms. Likewise, women in Britain are 50% more likely to be misdiagnosed following a heart attack because heart failure trials generally use male participants. Even cars are designed around the body of “Reference Man,” so although men are more likely to crash, women involved in collisions are nearly 50% more likely to be seriously hurt.

So, while technology is associated with innovation, as the people interacting with it, we need to take positive steps to address any inherent bias within. And to fully understand the opportunity and impact 4IR’s technology might provide, we need to consider what factors drive the gender pay gap.

Tackling Female Representation in the Workforce
The United Kingdom introduced compulsory gender pay gap reporting in 2017, and the second year of the regulation revealed that in 78% of reporting companies, the median hourly pay gap favored men. The most compelling metric of the six statutory calculations required by the Gender Pay Gap Regulations was gender representation by pay quartile; here, 82% of employers reported they had more women than men in their lowest 25% of earners, while only 17% said they had more women than men in their highest 25% of earners. This trend is not unique to the UK and plays out across all locales, but UK employers are now actively starting to analyze blockages or leaks in their talent pipeline that may inhibit female progression to senior levels.  

In the paper, “The Role of AI in Mitigating Bias to Enhance Diversity and Inclusion,IBM’s Smarter Workforce Institute states that bias can adversely influence decision making across the entire employee lifecycle, including in talent attraction, hiring, promotion, training, performance appraisal, compensation and even termination. This is likely why many of the vendors in the D&I market are tackling bias at these critical decision points. At present, 43% of this market is focused on talent acquisition solutions helping to source diverse pools of candidates, changing job advertisements and descriptions to reduce bias and provide technology that can standardize the criteria on which people are screened out during background checking.

Leveraging this new bias-free technology to address these issues is a must.

Another more nuanced effect that may favor women’s representation in leadership roles is the human vs. robot skills trade-off predicted to take place. Deloitte in its “Tech Trend Predictions for 2018 predicted, “intelligent automation solutions may be able to augment human performance by automating certain parts of a task, thus freeing individuals to focus on more ‘human’ aspects that require empathic problem-solving abilities, strong social skills, and emotional intelligence.” It is these more human, or softer, skills traditionally attributed as female competencies that may become more valued leadership characteristics: a suitable counter to the current gender stereotypes in leadership that endorse stereotypically masculine attributes like assertiveness, ambition and competition.

About the Author

Ruth Thomas is an industry principal and co-founder at Curo Compensation.


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