Could the Gender Wage Gap Increase with the Development of Technology?

Across the globe, we are making progress in closing the gender wage gap. Women have made significant progress in a number of industries, including business, finance, health care, and education. In fact, the annual gender wage gap report from the World Economic Forum (WEF) has found a reduction in the gap between male and female opportunity every year for 12 years. That is, until last year.

The year 2018 saw a widening of the gender wage gap for the first time since 2006, the first year in which WEF collected data. Economists believe that technology might be to blame.

The Tech Disruption

Automation and technological advances are disrupting industries in a big way. In part, this is good for employers. Their organizations can do more, sell more, and service more. They can solve previously unsolvable problems and do it at record speed.

But the technological disruption is also a drain on the job market. Automation is replacing human beings in a lot of jobs. And who stands to lose out the most? Recent research says women.

After years of hard work toward closing the gender wage gap, women are at risk of losing the most jobs to automation. This may be because the jobs that tech is capable of replacing are in female-dominated fields, like health care and social services. And the jobs that tech can create are in male-dominated industries, like information technology and biotech. Additionally, women are less likely to hold management positions, which are the jobs most likely to survive the automation revolution.

According to the WEF report, of the jobs being replaced by technology in the near future, women work 57 percent of them.

And when the job market tightens due to this automation, employers are more likely to rehire men into the new roles that technology creates.

“Men will get one new job out of the three jobs they lose,” said Jessie Qin, Partner, EMEIA Advisory Center and Business Transformation, in an interview with the Economic Times. “Women, on the other hand, will get only one job out of the five jobs they are losing. What’s even more alarming is that while the disruption stems from technology, women are far less digitally connected — the global Internet user gender gap grew from 11% in 2013 to 12% in 2016, according to data from the International Telecommunication Union. The gap remains large in the world’s Least Developed Countries at 31%.”

According to Sharan Burrow, the general secretary of the International Trade Union Confederation, this finding indicates that efforts to reduce gender inequality in employment are not working.

“The global economic model has failed working people and failed women more than most,” Burrow said, in an interview with The Guardian. “In the world of work, using any set of indicators, progress for women has stagnated. This has been driven by corporate greed and profit, more than anything.”

Diversity Boosts Innovation

For innovation to occur, you need diversity. Multi-disciplinary teams–made up of individuals who think differently from one another–contribute varying ideas. When teams have a healthy mix of members from different backgrounds–including gender, racial, educational, and work experience differences–those teams are better able to consider a problem from multiple points of view. Therefore, they have unique, multifaceted viewpoints from which to solve complex problems.

In other words, creativity flows when people are forced to think about unfamiliar ideas.

Because diversity is so crucial to innovation, employers can’t afford to lose more women, particularly in fields that are typically male-dominated.

But if the gender wage gap gets any worse, women may feel discouraged from participating in the work force. According to Qin, this would be a serious problem, and could mean that business innovation would suffer. “Companies need to make much more effort to bridge this gap. This is not a topic for women, but for organizations and the society at large. This is the time to grow female diversity.”

How Can Small Businesses Protect Against a Widening Gender Wage Gap While Still Adopting New Technology?

While a widening of the gender wage gap does seem likely, it is not an insurmountable problem. Here are some ideas for small businesses to counter the gender wage gap, even as they adopt new technology.

1. Hire more women. It may sound simple, and that’s because it is. But when employers make a concerted effort to recruit and hire women, they tend to have a more equitable and diverse workforce. Be sure to recruit from women in business groups and encourage women to apply for vacant positions.
2. Train women for management positions. When the time comes to identify employees who might qualify for a management training program, be sure to consider your female team members. The same goes for technical trainings in digital systems and other automated technologies that your organization uses.
3. Be transparent and equitable with your pay scale. Hopefully, you would never pay a man more than a woman for doing the same job with the same level of education and experience. But the only way to ensure that your employees feel confident that they are being paid fairly is to make your pay scale transparent. Establish a pay range for each position, with salaries noted at each level of experience.
4. Understand the value of so-called “soft skills.” Women are often more adept at soft skills. These are interpersonal skills, like leadership and motivational ability. Unlike “hard skills,” like a college degree or proficiency in computer programming, soft skills are harder to quantify. But they are often the most valuable assets in an employee, especially at the management level.
5. Invest as much in people as you do in technology. We won’t deny you your technological innovations. As we noted above, IT, automation, and other digital tools are disrupting nearly every industry. If you want to compete, you’ll have to invest in new technology. In addition to that, you’ll have to train your workforce to operate that technology. Have your managers identify several female employees to train for the coming technological disruption. Remember, you need diverse perspectives on your team in order to innovate.

The world has made tremendous progress toward closing the gender wage gap. Women have made progress in business, health care, education, politics, and other industries. But economists believe that technology and automation is causing the gap to widen again. Worldwide, women lose more jobs to automation than men do.

Because diversity, particularly gender diversity, is so important to creativity and innovation in business, it is crucial that employers do whatever they can to reverse this trend. We hope that these five tips have given you a few ideas for promoting gender equity and diversity in your business.