Artificial intelligence (AI) is expanding across all industries – including the compensation software space. This raises valid concerns among experts, especially given how new the technology is. How will AI make pay decisions? Will AI place employees at a competitive disadvantage in negotiations? Will the use of AI cause greater pay disparity since it has to learn from previous data points that likely include biased decisions?

All of these are real anxieties. Over the last decade, many tech giants – Google, Facebook and Amazon to name a few – have attempted to use AI to run their pay programs; and each of these companies ultimately turned off their early AI models because they produced biased and undesirable outcomes.  I witnessed this firsthand as a team member at Google during one of their AI experiments. They tested the AI on candidate data to see if it could make compensation offers based on the data in Google's HR systems – and they shut down the AI because outcomes were incredibly biased. The experiment shone a light on a problem that is still true for AI today: disparate pay outcomes resulted from the algorithm exponentially magnifying the bias that existed in all of the previous decisions leading up to a candidate getting to an offer stage at Google.