Artificial Intelligence: A Buoy or Barrier for Women in the Workplace?

Artificial intelligence (AI) technology, if harnessed appropriately, could unlock a myriad of opportunities for economic and social progress.

Key Points

• We believe that AI, if implemented conscientiously, could help narrow gender opportunity gaps in the workplace.
• Companies that have comprehensive systems to address equality within their broader culture, policies and processes can use technology to ensure that the right controls are in place to minimize risks and boost results.
• The ability for AI to generate code could open more creative and strategic opportunities in science, technology, engineering and math (STEM)-related fields, which could attract greater female representation.
• AI enhances personalization and search capabilities, which may reduce the amount of time women spend on unpaid household responsibilities.

Gone are the days of Dolly Parton’s “9 to 5″—and yet, despite headway, gender gaps are still ever-present in today’s workforce. Could artificial intelligence (AI) be the catalyst that propels modern working women closer to achieving full equality at work? With AI rapidly advancing, it appears that the world is on the brink of a technological revolution, evoking a range of reactions from fear and trepidation to optimism and enthusiasm. In our view, while the risks must be carefully considered and mitigated, AI technology, if harnessed appropriately, could unlock a myriad of opportunities for economic and social progress.

In recent years, organizations have endeavored to eliminate systemic barriers and increase diversity, equity and inclusion, in an effort to capture the benefits linked to a more equitable workplace. Still, despite advances, the global workforce participation rate for women falls short of that for men, and women tend to experience fewer opportunities for career development.^[1] With booming technological advancements in artificial intelligence, could AI influence how, and the degree to which, women participate in the labor force?

Gender-Based Opportunity Gaps

It is widely acknowledged that AI can help businesses reduce costs and increase efficiencies, naturally raising questions about the potential effects of AI on employment. In May 2023, we published a blog, Ethical Dilemmas of Artificial Intelligence, which underlined some of the potential social risks posed by AI—job displacement, the amplification of existing data biases, and the emergence of data privacy concerns. Despite these possible adverse implications, we believe that AI, if implemented conscientiously, could help narrow gender opportunity gaps in the workplace.

Much has been written about the underrepresentation of women in workplace leadership roles, as well as the overall decline in labor force participation among American women over the last two decades. Globally, just over 50% of women participate in the labor force, compared to 80% of men.^[2] The World Bank estimates that closing the gender employment gap could boost long-term gross domestic product (GDP) per capita by an average of 20% across countries worldwide.^[3] However, a number of factors—varying by geography and circumstance—contribute to the lower rate of female labor force participation; these include skills gaps, wage gaps, work environments, legal restrictions, fertility rates and personal choice.

AI-Induced Job Disruption

Job disruption from AI is widely expected to be most pronounced in occupations that involve routine and repetitive tasks, generate content based on existing data, and are more prone to human error. Some studies even suggest that the jobs most vulnerable to AI displacement are those typically held by women.^[4] However, we believe this research may not be thoroughly inclusive of the often-positive implications that AI automation could have for women in the labor force.

While 25% of American female workers in 2022 were employed in sales and office occupations, which are admittedly at high risk of AI disruption, another 30% of US female workers were engaged in professional and related occupations, including health care (e.g., registered nurses) and education (e.g., elementary and middle school teachers).^[5] We believe these professions should be less vulnerable to displacement by AI, as they entail human interaction, interpersonal communication and the provision of compassionate care, which machines are unable to deliver. These roles require human skills—empathy, critical thinking, instinct, mentorship, etc.—which, arguably, AI cannot replicate. Accordingly, we see an opportunity for AI to promote women’s professional contributions rather than disrupt them. 

While the majority of the workforce in both health care and education is female, men in these professions still tend to earn higher incomes. Notably, these sectors have also struggled recently with an exodus of employees, and as their jobs are less likely to be easily replaced by AI, pressure is mounting to fill them, which we believe could put upward pressure on wages. In turn, this could contribute to a reduction in overall gender pay gaps, should women continue to constitute the majority of workers in these fields.

Part-Time versus Full-Time Work

AI could also transform how companies approach part-time versus full-time work, which may have gender implications as well. In the US, women are more likely than men to work part time (women represented 63% of US part-time workers in 2022) and largely cite noneconomic reasons for doing so (85% of female part-time employees worked fewer than 35 hours per week for noneconomic reasons).^[6] People work part time for a variety of reasons, but women are far more likely to work part time to accommodate childcare and other family and/or personal obligations.^[7]   

AI automation enables workers, particularly entry-level and less experienced workers, to be more productive and efficient—perhaps more effectively targeting potential sales prospects or resolving customer call-center issues. Thus, rather than eliminating part-time roles, we believe that AI could enhance the value—particularly, the cost-effectiveness—of part-time staff. Companies may even find that part-time employees are able to fill previously full-time roles, thereby increasing the opportunities for women to effectively remain in the workforce while balancing obligations to dependents. While the degree to which employees, versus employers, will reap the benefits of AI-enhanced productivity is yet to be determined, we believe that AI could boost opportunities for part-time work.

Recruitment Practices

AI technology used for recruitment purposes could have significant impacts on gender-based opportunity gaps. As AI models are fundamentally shaped by the data that feeds them, they could amplify the existing gender biases in that data. The risk is that companies using AI in their hiring processes, to screen or narrow pools of job applicants, may find that they are overlooking a larger subset of qualified candidates, if their models are built incorrectly. Amazon, notably, discovered this years ago when the company experimented with an AI-based hiring tool that was created using historical recruiting data. The company ultimately scrapped the project upon learning that its model inherently favored male candidates.

Alternatively, as discussed in another of our previous blogs, Synthetic Data: Fuel for the AI World, models built using synthetic data could potentially neutralize the gender biases found in trained AI models. The use of synthetic data to train AI models presents an opportunity to reduce the subjectivity of human judgement. In turn, this approach could support an employer’s efforts to increase its workplace diversity, encouraging both women and men to apply for positions and ensuring that all applicants are equitably screened for jobs. 

While examining hiring practices can be informative and can help identify potential faults in achieving desired diversity objectives, a recent study found that simply neutralizing gendered language in the recruiting process had negligible effects on gender equity and diversity in organizations.^[8] Companies that have comprehensive systems to address equality within their broader culture, policies and processes can use technology to ensure that the right controls are in place to minimize risks and boost results. Third-party websites such as Glassdoor and Comparably—which provide first-hand accounts and insights from current and former employees—can be valuable for investors in more accurately assessing potential concerns around gender biases in recruitment and retention practices. 

Skills Gaps

In addition to potentially reducing the impact of unintended gender biases in hiring practices, AI could also help bridge the skills gap in the technology industry, which has historically contributed to a lack of gender diversity in the sector. The ability of AI to generate code may displace some of the industry’s existing technical coding jobs and open up more creative roles focused on driving innovation. Additionally, as AI enables even beginners to perform basic computer programming tasks—and as demand shifts toward different skill sets—younger generations of girls may have more confidence to pursue opportunities in science, technology, engineering and math (STEM), areas in which women have been largely underrepresented. 

Data Privacy and Transparency Concerns

It is essential to consider the risks that come with implementing AI, and data privacy issues and lack of transparency are among the top concerns. As Spiderman’s uncle once stated, “with great power comes great responsibility.” To reiterate our stance, we believe AI technology can help level the gender playing field by reducing human bias in the job application process, if algorithms are built to mitigate bias. However, our confidence in AI’s ability to have a positive impact on gender equity hinges on our trust that AI models are built responsibly, without the misuse of the personal data that feed them. Deep learning models are complex and, unfortunately, the processes by which they are created are not always clear.

As investors, we must consider a company’s approach to trust, privacy and compliance to fully understand the underlying impact that AI may have on that organization and on society overall. Ensuring that models are neutral, accountable and built on trust may be difficult, as full transparency of an organization’s data management system is not always available. However, investors can inquire about how a business is using AI, including its governance structures, operational oversight and processes in place to detect potential biases in AI models. Additionally, reviewing a company’s track record in developing talent, implementing innovative solutions and enabling data transparency can be beneficial.

Investing in Companies that Support Women

In our view, AI can be used to help narrow the gender workforce participation gap in many ways, including in the enhanced products and services that companies are able to deliver to support women in their day-to-day lives. For instance, retailers may use AI to enhance personalization and search capabilities, thereby improving shopping speed and customer experience. Technology companies could use AI to automate simple tasks or consolidate multiple interfaces. These products and services may reduce the amount of time that women spend tending to their unpaid household responsibilities, which may give them time back to focus on paid employment.

AI is estimated potentially to add $15.7 trillion to global GDP between now and 2030 by increasing labor productivity, quality and personalization.^[9] In our view, if AI can help women increase their participation in the workforce, the boost to the economy could be almost doubly impactful. While there are a number of factors to consider when applying a gender lens to AI’s economic potential, the implications are significant—particularly as an additional $28 trillion could be added to global GDP if women were to participate in the workforce at similar rates as men.^[10]

Conclusion

We believe that the AI revolution could enable women to meet work/life responsibilities better, and that it could potentially improve female labor force participation. We look for companies that continue to close gender opportunity gaps throughout their organizations, regardless of industry or role. We believe AI can aid organizations in enhancing their returns by attracting and retaining a diverse pool of talent. A study by Irrational Capital found that companies that foster cultures in which both men and women feel equally treated and supported perform better than those that do not.^[11] As investors, we believe that supporting women in their ability to participate in the workforce could translate to a more robust economy which drives better financial outcomes.

Sources:

[1] The World Bank. January 9, 2022. https://genderdata.worldbank.org/data-stories/flfp-data-story/#:~:text=The%20global%20labor%20force%20participation,do%20work%2C%20they%20earn%20less

[2] The World Bank. January 9, 2022. https://genderdata.worldbank.org/data-stories/flfp-data-story/#:~:text=The%20global%20labor%20force%20participation,do%20work%2C%20they%20earn%20less

[3] The World Bank. March 2, 2023. https://www.worldbank.org/en/news/press-release/2023/03/02/pace-of-reform-toward-equal-rights-for-women-falls-to-20-year-low\

[4] Revelio Labs, Inc. June 13, 2023. https://www.reveliolabs.com/news/macro/ai-exposed-jobs-employ-more-women/

[5] US Bureau of Labor Statistics. January 25, 2023. https://www.bls.gov/cps/cpsaat11.htm

[6] US Bureau of Labor Statistics. January 25, 2023. https://www.bls.gov/cps/cpsaat08.htm

[7] US Bureau of Labor Statistics. March 2018. https://www.bls.gov/opub/mlr/2018/article/who-chooses-part-time-work-and-why.htm

[8] The Institute for Operations Research and the Management Sciences. February 27, 2023. https://pubsonline.informs.org/doi/10.1287/mnsc.2023.4674

[9] PwC. As of July 20, 2023. https://www.pwc.com/gx/en/issues/data-and-analytics/publications/artificial-intelligence-study.html

[10] McKinsey & Company. September 21, 2020. https://www.mckinsey.com/featured-insights/diversity-and-inclusion/ten-things-to-know-about-gender-equality

[11] Pensions & Investments. August 12, 2022. https://www.pionline.com/industry-voices/commentary-mind-gap-connection-between-gender-alignment-and-performance

Authors

Julianne McHugh

Head of sustainable equities

Karen Miki Behr

Portfolio manager