How reward technology can tackle workplace bias and inequality
Diversity and inclusion (D&I) continues to be a topic at the forefront of discussion at the top levels of many organisations, and whilst much work has been done in the last 10 years, the pace of real change has been slow. But two key trigger points in 2017 forced diversity and inclusion onto the agendas of Boards globally.
2017 the year D&I issues went stratospheric
Firstly the #Metoo movement hit headlines around the world and highlighted not just issues of systemic sexual harassment in the workplace but broader issues affecting women, including fair pay. The Golden Globes activists reminded us that violence comes in many forms, from physical and the emotional to the economic. Their campaign asserted that failure to pay women fairly is another way of exacting violence on women workers by devaluing their worth and contributions.
Then in the UK, the Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 forced business leaders to publicly confront pay gaps prevailing in their organisations. Across all companies reporting under the legislation the data revealed that women were paid 14.3 per cent less than men on a mean basis and that as a woman in the UK today you’re most likely working at a company which pays men more than women on an average basis. Many CEO’s were genuinely surprised by these results, because their efforts on fair pay had been more focused on equal pay and legal requirement to have equal pay for work of comparable value. Understanding why pay gaps exist has forced organisations to address wider societal and cultural issues such as: stereotypical representations of men and women; occupational segregation; the lack of well-paid part-time/flexible work and the fact that women remain less likely to progress to senior levels. And of course this is all only addressing gender; we know ethnicity pay gap legislation is to follow shortly.
How technology can help D&I
Analysts are now starting to focus on the D&I technology market as a discrete category in the HR tech market, research from Mercer and Red Thread Research currently estimates the overall market size to be approximately $100 million. New technologies such as AI, machine learning, algorithms, text mining, sentiment analysis, and natural language processing have brought new capabilities which it is hoped can be applied to drive systemic change. These technologies can help to address D&I challenges across the employee lifecycle by creating consistent practices, simplifying complex decisions (particularly at scale), and tracking outcomes more effectively.
What’s the impact for Reward?
Turning specifically to Reward, there are some clear benefits to be gained from using these progressive technologies in your programme delivery. When it comes to allocating pay, the uncomfortable reality is that pay decisions are never wholly objective; ultimately it’s a decision about people, made by people, often based on subjective judgements. Decisions impacting pay like hiring and promotion often rely on judgements about potential for future performance made by managers with potentially inherent biases.
Embedding AI into compensation management platforms can help to reduce biases by providing consistent information to adequately differentiate between employees when making decisions. It can also calibrate multiple data points and process this in a more meaningful way, leading hopefully to better, and smarter pay decisions. This also, in turn, increases pay transparency, with evidence enabled decisions that are hopefully more explainable to employees themselves. There are broader benefits too; technology enables automation which can make processes simpler and more efficient giving all stakeholders more time to focus on the right outcomes and these can also be monitored real time as decisions are being made.
There are also new tools coming to market to help organisations specifically address pay equity analyses. These focus on supporting analysis by different protected categories (including the complexity of binary and multi-factor scales) and allow drill down beyond raw pay gap data to explore how gaps might be explained by non-monetary factors such as performance, tenure, time in role, age, location with regression analysis and data controls. They can also support tracking pay equity actions or justifications at an individual employee level.
When it comes to employee benefits, technology can help to drive the flexibility required in benefits programmes to support a more diverse workforce. It can enable offering a broader set of options, including enhanced parental leave, emergency eldercare services and resources, or truly flexible ways of working that support major life changes, as well as identifying hotspots within an organisation where a lack of awareness or support may be serving as a sticking point for inclusivity.
So is technology the cure-all?
Whilst new technologies can enhance Reward’s ability to support D&I there are risks. Not least the potential biases in the algorithms themselves when you consider who creates them, (research shows only 25 per cent of IT jobs are held by women). You also can’t just rely on technology to solve all bias problems, you also need to address these in people too, or they may ultimately reject the AI enabled decisions. When it comes to addressing pay equity there are also legal risks of identifying inequality issues, if they are not addressed.
Successful businesses are recognising that technology has the potential to be a systemic disruptor to address workplace biases and inequality. It can accelerate the journey towards building a culture that supports the increasingly diverse and multi-generational workforce that is emerging. Diversity initiatives are no longer an option or just 'the right thing to do’ they ultimately drive business performance and enhance brand perception to demonstrate as an employer you value a diverse, inclusive workforce which can impact the ability to attract and retain talent.
The author is Ruth Thomas, Industry Principal at Curo Compensation.
This article is provided by Curo.
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