How one founder-CEO is using AI to close the gender pay gap

While the algorithm bias of some machine learning systems has served to exacerbate societal inequities, Dr Zara Nanu has been harnessing artificial intelligence as a force for fairness at work
Dr Zara Nanu Founder And Ceo Of Gapsquare

Despite five years of mandatory reporting on their gender pay gaps, many of the UK’s biggest employers have made little progress towards parity. Taken together, all of their most recent disclosures reveal that men are paid more on average than women in 79.5% of companies, while men’s median hourly pay is 12.2% higher than that of women.

The challenge of ending such inequity inspired Dr Zara Nanu to co-found Gapsquare – a platform that uses AI to track and analyse pay data by gender, ethnicity, disability and other categories – in 2015. 

The Bristol-based entrepreneur has been deeply involved over the years in campaigns for fairness at work. In 2020-22, for instance, she served as a member of the global future council on equity and social justice at the World Economic Forum (WEF). Today, she sits on the Women’s Leadership Board at Harvard University’s John F Kennedy School of Government.

As Nanu reveals in the following Q&A with Raconteur, she is a strong believer in AI’s potential to not only reduce pay inequality but also help more women to pursue STEM careers.

What inspired you to start an enterprise dedicated to closing the gender pay gap?

“In 2015, the WEF stated that the world was still 217 years away from pay parity between men and women. (It also predicted that self-driving cars would be the norm by 2030.) This didn’t sit well with me. It seemed extraordinary that, with all these technological advances, we still couldn’t achieve pay equity at work. 

Zara Nanu’s career at a glance

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“With my background in human rights, I’d been leading many projects focused on women’s empowerment. The language at that time felt like it was very much telling women how they should adapt. The more I worked on these projects, the more I knew that it was the system that needed addressing. I felt compelled to make a change.

“I knew that, by innovating with data and the latest technology to tackle the issue, we could make leaps in progress. So I started Gapsquare, which would later be acquired by XpertHR.” 

What is the main factor preventing employers from closing their pay gaps?

“Their biggest barrier is the inherited system of inequity. This is not only about companies; it’s also about structural inequalities that exist throughout society. For example, the lack of women in tech jobs (and the corresponding pay gap) is the result of an inherited educational and societal issue relating to ingrained stereotypes about women in STEM, which reduces the number of women who study such subjects and go on to land tech roles. Organisational barriers perpetuate the issue.

Trying to resolve the issue of pay inequality is not enough on its own. We need to see a rewiring of the employment system to accelerate social change in the workplace and achieve fair pay for everyone.”

Has the tough trading environment diverted employers’ attention from equality issues?

“It has, but these issues go deeper than that. Equity, diversity and inclusion have historically been viewed as ‘nice to have’, while profitability and growth are seen as essential. 

“This attitude had a huge impact when the pandemic started, with firms furloughing their diversity and inclusion officers and pausing any investments that were going towards creating equity. Business leaders then questioned why they put these important issues on hold after George Floyd’s murder in 2020 and the emergence of the Black Lives Matter movement. The UK government also hit the pause button on gender pay gap reporting. This signalled that achieving equal pay wasn’t a priority and gave companies an excuse to push it down the to-do list.

“But there have been some great initiatives since then. Something completely new is the implementation of key performance indicators related to equity and inclusion for all business functions. This moves accountability away from HR and makes creating equality and closing the pay gap the responsibility of all senior leaders. We’re also witnessing a very necessary shift towards greater openness, with initiatives such as transparent pay ranges for every job in a company.”

How optimistic are you that AI can accelerate the transition to a more equitable workplace?

“Predictions from Goldman Sachs show that up to 300 million jobs could be replaced by technology such as AI. Administrative roles are expected to be largely affected, which could have a disproportionately adverse impact on jobs occupied by women and increase the gender pay gap if these are fully replaced.

“There’s a real danger that AI will quickly remove women from the economy via the elimination of roles that they dominate. If we don’t have a chance to think through the restructuring and reskilling policies that will be needed to create more opportunities, we could end up with a lot of displaced women.

“In theory, AI can make the world a better place. But it relies on existing data, which is biased and therefore gives biased results, so we have to be more intentional in how we use it. The lack of focus on ethics in data science and AI at the student level is problematic. It’s already a male-dominated space and it means we are moving all guns blazing towards creating more biased AI unless we act to improve the ethical development behind it.”

Have you faced any problems that you think a male founder wouldn’t have encountered in the AI space?

“We tried to raise funds numerous times when I started Gapsquare, but our pitches were never successful. My experience was consistent with studies by Atomico on the funding landscape in Europe, which revealed that only 1% of venture capital finance was invested in female-only general partner teams in 2021.

“We’re seeing improvement in this space, with more funds being established to target diverse founders or impact-driven companies – which are more likely to be started by women or people from ethnic minorities – but they are still few and far between. 

“The challenge is that these are small pockets of funding, separate from the mainstream multimillion-pound funds that continue to operate in the same ways. It’s extremely limiting for female founders and we need these two agendas to become one and the same if there is to be a real improvement in the opportunities for them.”