The Ethics, Effectiveness, and Legal Concerns of the AI Initiative to Promote Diversity in the Tech Industry
1. The Diversity Problem in the Tech Industry
1.1 Tech Industry Background
Women held just 35% of tech jobs in the U.S. at the end of 2023[1]. While tech companies started publishing diversity reports in 2014, these reports show that sexism and discrimination continue to be a problem. In 2024, women held 11% of executive positions within tech companies[2]. This statistic suggests barriers in career advancement opportunities for women. Women accounted for nearly 70% [DM1] of the tech sector layoffs beginning in 2022, partly due to their lack of historic seniority[3]. There appears to be a troubling cycle: women are denied advancement opportunities, then disproportionately affected by layoffs for not having reached the seniority they were systematically excluded from. So, there is an evident gender diversity problem in the tech industry. Yet, many men do not acknowledge the existence of a gender diversity problem – in 2017, 58% of men in tech said that there is a sufficient number of women in tech[4]. And if over 80% of leadership positions in tech companies are comprised of men, the power to address the diversity problem remains largely in the hands of those least likely to recognize it.
1.2 Unconscious Bias and Noise in Human Decision-Making
But why is there a lack of women in the tech industry? The underlying cause for a lack of women in the tech industry is the subjective nature of human decision-making, which is the leading employment decision-making method in 80% of tech companies[5]. Unconscious errors of reasoning (unconscious bias) and random chance variability in decisions (noise) result in inaccurate and inconsistent decisions. The reason that employment interviews are still handled by humans with biases is due to the validity illusion. That is, Kahneman and Tversky explain that people overrate their own ability to make accurate predictions[6]. The validity illusion results from confirmation bias; that is, the tendency to focus on information that confirms one’s prior beliefs or predictions and disregarding that which does not. A number of unconscious biases such as affinity bias, stereotyping, and status quo bias affect employment decisions. According to Kahneman, humans are unreliable decision-makers, and this inconsistent decision-making costs tech companies billions in lost productivity[7].
When it comes to making employment decisions, both unconscious biases and noise must be reduced or eliminated. This is because consistent decision-making is more equitable and reduces risk of discrimination. However, the problem is that bias and noise in decision-making may not be detectable by the decision-maker or by other humans. Consequently, employment decisions made by human decision-makers produce biased, inconsistent, and less accurate results.
1.3 Failure of Current Diversity and Inclusion Methods
Incorporating AI into employment decisions is a promising solution to mitigating unconscious bias and noise in human decision-making. But let us first look at why current diversity and inclusion methods are unsuccessful. The primary method put forward by tech companies are training programs. Training programs aim to explain biases to employees and managers so that they can actively avoid them. Tech companies have spent billions of dollars on training programs since 2014. However, they have been unsuccessful in increasing the numbers of women and minorities[8]; this has been shown by the above discussed recent reports. Studies show that diversity training programs have no effect on decreasing bias, and, if anything, have the potential to increase bias. This is because men tended to interpret diversity training as an assignment of blame, and some began to fear losing their jobs to women or minorities[9]. Tech companies also tried implementing mentoring programs, which ask marginalized individuals to advocate for themselves. However, studies have shown that women who advocate for themselves and diversity overall are penalized in evaluation reports[10]. Mentoring can help promote a feeling of inclusion but it has not been shown to tackle the barriers to career advancement opportunities for women. The current diversity and inclusion methods are unsuccessful because they do not address nor tackle the unconscious bias and noise in human decision-making. For these reasons, Kahneman and other researchers have suggested incorporating AI into the decision-making process as a promising solution to reducing bias and noise in human decision-making[11].
2. Incorporating AI into Employment Decisions
2.1 Effective Applications of AI in Promoting Diversity in Tech
AI is defined as the ability of a machine to perform functions that humans engage in through the use of a programmed series of rules known as algorithms[12]. Tech companies that have started to use AI rather than traditional recruiting methods have seen improved diversity among their slate of candidates.
Algorithms can be used to remove race, gender, and national origin from the initial evaluation process. Unbias.io, for example, removes faces and names from LinkedIn profiles to reduce the effects of unconscious bias in recruiting[13]. Rival Recruit anonymizes interviewing by removing all indication of gender or race[14]. Textio, a program that rewords job ads to appeal to a wider demographic, increased the Australian software company Atlassian’s percentage of women among new recruits from 18% to 57%[15]. Therefore, the anonymization of applicants through the removal of names and gender identifications from resumes results in an increased number of women hired. Slack, for example, uses “white board interviews” where candidates solve problems from home. Companies and organizations can eliminate bias by first removing a candidate’s identifying features and then evaluating the candidate’s work against a comprehensive checklist[16].
Inconsistent decisions can come from individuals’ own day-to-day decision making as well as from two different humans evaluating the same data. By contrast, an algorithm will always provide the same decision for the same data set. The creation of rules that are consistently applied to data sets helps reduce noise. This also results in greater accuracy. For example, using chatbots to conduct structured interviews is an algorithmic substitute that reduces noise in hiring. In a structured interview, each candidate answers questions identical to those asked of the other interviewees. According to Loren Larsen, CTO of HireVue, structured interviews help to predict job performance more accurately than human evaluators[17]. Mya Systems created a chatbot that recruits, interviews, and evaluates job candidates using performance-based questions. The chatbot then compares the interviewee’s answers with the job requirements[18]. This allows for candidates to be evaluated against predetermined criteria without the impact of human biases.
Pymetrics has succeeded in creating gender diversity through AI through unbiased gamified assessments and continually auditing their own algorithms for biased outcomes. Candidates engage in neuroscience games, which enables the algorithm to match candidates to job openings based on objective traits and behaviors[19]. These games measure real skills, tendencies, and cognitive patterns that are associated with the top performers of the company. Unilever reported that since they started using Pymetrics, they doubled the number of applicants they end up hiring, hired higher-quality employees and subsequently increased revenue, and increased the diversity of the applicant pool. The use of online assessments and games helps locate non-traditional applicants; that is, people with technical skills who do not have a college degree and/or have a large gap in their employment history. Traditional resume screening tends to eliminate these kinds of qualified candidates just based on pedigree. GapJumpers found that using their skills-based AI increased the percentage of women and underrepresented minorities selected for initial interviews from 20% with traditional resume screening to 60%[20].
Retention is critical for keeping the women that are hired in tech. The female turnover rate in the tech field is 45% higher than that of men due to the workplace environment[21]. Sysco’s AI program improved its retention rate from 65% to 85% by tracking employee satisfaction scores. This helped Sysco implement immediate improvements, saving Sysco nearly $50 million in hiring and training costs for new associates[22].
2.2 Concerns with using AI in Employment Decisions
The primary concern with incorporating AI in employment decision-making is the risk of discriminatory outcomes. This is known as algorithmic bias.
2.2.1 “Garbage in, Garbage Out”
AI systems are trained on historical data, which might reflect social prejudices[23]. This is because data mined from the internet, social media, and data brokers are likely to reflect social prejudices. The AI system can produce discriminatory outcomes as a result. This problem is known as “garbage in, garbage out” (GIGO).
For this reason, data mined from potentially biased sources must not be used. Data sets skewed in favor of a gender or race are also problematic[24]. For example, if an algorithm is used to identify common traits among the top performers of a company, but 80% of those top performers are male, the results will be biased toward the male gender[25]. This is what happened with Amazon’s AI tool, which they scrapped in 2018[26].
This problem can be addressed by balancing the data. For example, IBM has published work on creating balanced data sets[27]. To create a balanced data set, developers duplicate results from the less frequent category. This is called boosting. Developers also discard the results of the more frequent category. This is called reduction. Developers can combine boosting and reduction to get more balanced results. This helps reduce the impact of a skewed data set[28].
However, data sets can contain little or no information about certain groups of people. This means that the algorithm will not accurately evaluate people who belong to that group. For example, employed data sets typically encode gender and ethnicity as sensitive attributes, while disability, religion, and sexual orientation are missing[29]. A potential solution is to increase the diversity of existing data points reviewed. AI tools that have been created to test data sets for bias, such as Algorithm Audit, can also be used to ensure the elimination of data bias[30].
Algorithmic bias can also stem from biases in the programmers themselves. Programmers might choose inappropriate “target variables” or “class labels”. Because more men tend to be programmers, their own biases could cause algorithmic bias. However, this can be audited for and eliminated[31]. The best solution is to hire a diverse group in developing the programs. This reduces or eliminates the bias and noise in employment decisions. There must be women and diverse voices at the table to avoid biasing systems[32].
2.2.2 “Black Box” Problem
The “black box” problem comes from the difficulty in understanding how an AI system produced a particular outcome. If AI outcomes cannot be explained, then they may contain biases[33].
One tool developed to address this problem is Quantitative Input Influence. This helps explain algorithmic outcomes by measuring and displaying the influence of inputs on outputs. That is, the more influential an input, the larger impact it had on the algorithmic outcome[34]. This can provide an understanding of why a particular outcome was produced. But this does not look into the “black box” itself.
Furthermore, AI can be used to prevent and/or detect bias in algorithmic outcomes. For example, at the 2016 Neural Information Processing Systems conference, Tolga Bolukbasi et al. introduced a “hard de-biasing” method for reviewing and eliminating gendered stereotypes resulting from biased training data[35]. At the 2018 International Conference in Machine Learning, counterfactual testing was shown to be effective in eliminating bias. Although this study looked at fairness in law school admissions, the same could be done with employment decisions. Many companies are now incorporating these solutions[36]. For example, IBM’s AI Fairness 360 is an open source library of tools for detecting and mitigating bias in machine learning programs[37]. Facebook’s Fairness Flow, Pymetrics’ open-source Audit AI Tool, Google’s What-if Tool, and Accenture’s Toolkit are all further examples of organizations that are incorporating methods to detect and mitigate discriminatory outcomes[38].
3. Legal Concerns within the United States of America
While overt forms of discrimination have decreased due to anti-discrimination laws (e.g. Title VII of the Civil Rights Act of 1964[39]), instances of covert forms of discrimination, such as bias, have been less successful. Consequently, current application of law does not offer an adequate solution for those affected by non-obvious non-intentional discrimination. While social science has significantly developed our understanding of unconscious biases in the workplace, the success of unconscious bias evidence to certify class action lawsuits has been inconsistent in case law. For this reason, the use of responsible AI in employment decisions can protect individuals from being subjected to covert forms of discrimination[40].
However, algorithmic employment methods carry unique risks because it can amplify the scale of potential harm, unlike human judgement[41]. One biased algorithm can impact thousands of candidates or employees. This increases liability risks for employers. Employers can be held liable for facially neutral practices that have a disproportionate, adverse impact on members of a protected class under Title VII[42]. This includes decisions made by AI systems. For this reason, an employer can be held liable under disparate impact theory in claims of algorithmic discrimination. While current administration has directed federal agencies to deprioritize disparate impact theory, it is still a viable legal theory under federal, state, and local anti-discrimination laws[43]. In cases where disparate impact is claimed, courts are likely to use the test set forward in Griggs v. Duke Power Co.[44], which requires that there be a disproportionately negative effect on a statutorily protected group[45]. If women and underrepresented minorites are disproportionaly screened out, the algorithm could be reviewed to detect and mitigate bias. To mitigate potential legal risks, organizations must know where their data is sourced from and implement routine audits under legal privilege. This ensure that bias and variability in the data are identified, examined, and mitigated; in this way, it can be ensured that AI is being used for employment in a legally defensible way. Overall, organizations must ensure that there is a robust policy governing AI use and related issues, such as transparency, data privacy, and non-discrimination[46].
Trump’s AI Action Plan (July 2025)[47] is effectively a replacement for the Biden AI executive order[48]. Biden’s AI executive order placed a large focus on mandating AI companies to limit racial or otherwise discriminatory bias[49]. Trump repealed Biden’s order within days of his inauguration, claiming that it established “unnecessarily burdensome requirements”[50] that would “stifle”[51] innovation. The AI Action Plan emphasizes the need for employers to demonstrate that their AI tools are politically neutral[52] in order to prevent “woke AI in the Federal Government”, according to the Executive Order issued on July 23, 2025[53].
4. Conclusion
The persistent lack of diversity in the tech industry, particularly gender diversity, is not adequately addressed through traditional methods such as diversity training and mentoring programs. The subjective nature of human decision-making in employment, shaped by unconscious bias and noise, is the underlying cause for the diversity problem. For this reason, the use of AI in employment decisions can reduce unconscious bias and noise in order to promote fairness and diversity in the tech industry. The success of AI use has been exemplified through anonymized application processes, structured chatbot interviews, gamified assessments, and algorithmic audits. However, scholars discuss the risks of “garbage in, garbage out” and the “black box” problem in AI use, as they can lead to biased or discriminatory outcomes. Potential solutions for these problems include balancing data sets, increasing the diversity of existing data sets reviewed, diversifying the team of programmers, hard de-biasing, counterfactual testing, IBM’s AI Fairness 360 toolkit, and more. The use of AI in employment decisions raises legal concerns, which has been discussed in the context of U.S. anti-discrimination law and AI policy. The development of AI is unstoppable, so it is imperative to develop it responsibly for the benefit of organizations, societies, and economies. The use of responsible AI in employment decisions can therefore play a critical role in diversifying the tech industry.
[1] Anna Radulovski, “Women in Tech Stats 2024,” www.womentech.net, January 24, 2020, https://www.womentech.net/women-in-tech-stats.
[2] ibid
[3] ibid
[4] Emma Hinchliffe, “58% of Men in Tech Say There Are Enough Women in Leadership Roles, but Women Don’t Agree,” Perma.cc, September 20, 2017, https://perma.cc/3BPG-2MWN.
[5] Kimberly Houser, “Can AI Solve the Diversity Problem in the Tech Industry? Mitigating Noise and Bias in Employment Decision-Making,” Stanford Law School, February 28, 2019, https://law.stanford.edu/publications/can-ai-solve-the-diversity-problem-in-the-tech-industry/.
[6] Daniel Kahneman and Amos Tversky, “On the Psychology of Prediction.,” Psychological Review 80, no. 4 (1973): 237–51, https://doi.org/10.1037/h0034747.
[7] Daniel Kahneman et al., “Noise: How to Overcome the High, Hidden Cost of Inconsistent Decision Making,” Harvard Business Review, October 2016, https://hbr.org/2016/10/noise.
[8] Frank Dobbin and Alexandra Kalev, “Why Diversity Programs Fail,” Harvard Business Review, July-Aug. 2016, https://hbr.org/2016/07/why-diversity-programs-fail.
[9] Joanne Lipman, “How Diversity Training Infuriates Men and Fails Women,” Time (Time, January 25, 2018), https://time.com/5118035/diversity-training-infuriates-men-fails-women/.
[10] Stefanie K. Johnson and Davir R. Hekman, “Women and Minorities Are Penalized for Promoting Diversity,” Harvard Business Review, March 23, 2016, https://hbr.org/2016/03/women-and-minorities-are-penalized-for-promoting-diversity.
[11] James Pethokoukis, “Nobel Laureate Daniel Kahneman on AI: ‘It’s Very Difficult to Imagine That with Sufficient Data There Will Remain Things That Only Humans Can Do,’” American Enterprise Institute - AEI, January 11, 2018, https://www.aei.org/economics/nobel-laureate-daniel-kahneman-on-a-i-its-very-difficult-to-imagine-that-with-sufficient-data-there-will-remain-things-that-only-humans-can-do/.
[12] Houser, supra note 5
[13] Unbias, “Unbias - Reducing Unconscious Bias,” Unbias.io, 2024, https://unbias.io/.
[14] Rival, “AI-Powered Outbound Recruiting & Modular Talent Suite | Rival,” Rival, July 14, 2025, https://rival-hr.com/.
[15] Simon Chandler, “These AI Startups Want to Fix Tech’s Diversity Problem | Backchannel,” Wired, September 13, 2017, https://www.wired.com/story/the-ai-chatbot-will-hire-you-now/.
[16] Houser, supra note 5
[17] Melissa Locker, “How to Convince a Robot to Hire You,” VICE, October 17, 2018, https://www.vice.com/en/article/robot-job-interview/.
[18] Chandler, supra note 15
[19] BioSpace, “Pymetrics Awarded as Technology Pioneer by World Economic Forum,” BioSpace, June 21, 2018, https://www.biospace.com/pymetrics-awarded-as-technology-pioneer-by-world-economic-forum.
[20] Claire Cain Miller, “Is Blind Hiring the Best Hiring?,” The New York Times, February 25, 2016, sec. Magazine, https://www.nytimes.com/2016/02/28/magazine/is-blind-hiring-the-best-hiring.html.
[21] Mary K Pratt, “Why Women Leave Your IT Organization — and How to Help Reverse That Talent Drain,” CIO, March 15, 2025, https://www.cio.com/article/3846247/why-women-leave-your-it-organization-and-how-to-help-reverse-that-talent-drain.html.
[22] Thomas H. Davenport, Jeanne Harris, and Jeremy Shapiro, “Competing on Talent Analytics,” Harvard Business Review, September 7, 2017, https://hbr.org/2010/10/competing-on-talent-analytics.
[23] Zaker Ul Oman, Ayesha Siddiqua, and Ruqia Noorain, “Artificial Intelligence and Its Ability to Reduce Recruitment Bias,” World Journal of Advanced Research and Reviews 24, no. 1 (October 30, 2024): 551–64, https://doi.org/10.30574/wjarr.2024.24.1.3054.
[24] Solon Barocas and Andrew Selbst, “Big Data’s Disparate Impact,” California Law Review 104, no. 3 (2016): 671–732, https://doi.org/10.15779/Z38BG31.
[25] Houser, supra ibid
[26] BBC, “Amazon Scrapped ‘Sexist AI’ Tool,” BBC News, October 10, 2018, https://www.bbc.com/news/technology-45809919.
[27] Aleksandra Mojsilovic and John R Smith, “IBM to Release World’s Largest Facial Analytics Dataset,” Phys.org, June 27, 2018, https://phys.org/news/2018-06-ibm-world-largest-facial-analytics.html.
[28] Houser, supra note 5
[29] Alessandro Fabris and Matthew J. Dennis, “Fairness and Bias in Algorithmic Hiring,” Montreal AI Ethics Institute, February 1, 2024, https://montrealethics.ai/fairness-and-bias-in-algorithmic-hiring/.
[30] Algorithm Audit, “Bias Detection Tool,” Algorithmaudit.eu, 2023, https://algorithmaudit.eu/technical-tools/bdt/.
[31] Data USA, “Computer Programmers | Data USA,” Datausa.io, 2016, https://datausa.io/profile/soc/computer-programmers.
[32] Houser, supra note 5
[33] ibid
[34] Anupam Datta, Shayak Sen, and Yair Zick, “Algorithmic Transparency via Quantitative Input Influence: Theory and Experiments with Learning Systems,” 2016 IEEE Symposium on Security and Privacy (SP), May 2016, https://doi.org/10.1109/sp.2016.42.
[35] Tolga Bolukbasi et al., “Man Is to Computer Programmer as Woman Is to Homemaker? Debiasing Word Embeddings,” ArXiv (Cornell University), July 21, 2016, https://doi.org/10.48550/arxiv.1607.06520.
[36] Matt Kusner et al., “Counterfactual Fairness,” 2018, https://proceedings.neurips.cc/paper_files/paper/2017/file/a486cd07e4ac3d270571622f4f316ec5-Paper.pdf.
[37] Kush Varshney, “Introducing AI Fairness 360,” IBM Research (IBM, September 19, 2018), https://research.ibm.com/blog/ai-fairness-360.
[38] Houser, supra note 5
[39] U.S. Equal Employment Opportunity Commission, “Title VII of the Civil Rights Act of 1964,” www.eeoc.gov, 1964, https://www.eeoc.gov/statutes/title-vii-civil-rights-act-1964.
[40] Houser, supra note 5
[41] Lauren B. Hicks and Emily M. Halliday, “The Intersection of Artificial Intelligence and Employment Law,” Ogletree, June 17, 2025, https://ogletree.com/insights-resources/blog-posts/the-intersection-of-artificial-intelligence-and-employment-law/.
[42] ibid
[43] ibid
[44] Justia, “Griggs v. Duke Power Co., 401 U.S. 424 (1971),” Justia Law, 2019, https://supreme.justia.com/cases/federal/us/401/424/.
[45] Houser, supra note 5
[46] Hicks and Halliday, supra note 39
[47] AI GOV, “AI Action Plan,” Ai.gov, 2025, https://www.ai.gov/action-plan.
[48] Maxwell Zeff, “Trump Administration Unveils New AI Policy, Reverses Biden’s Regulatory Framework,” Ogletree, June 3, 2025, https://ogletree.com/insights-resources/blog-posts/trump-administration-unveils-new-ai-policy-reverses-bidens-regulatory-framework/?_gl=1.
[49] ibid
[50] The White House, “Fact Sheet: President Donald J. Trump Takes Action to Enhance America’s AI Leadership – the White House,” The White House, January 23, 2025, https://www.whitehouse.gov/fact-sheets/2025/01/fact-sheet-president-donald-j-trump-takes-action-to-enhance-americas-ai-leadership/.
[51] ibid
[52] Eric House, “Trump’s AI Action Plan: The Impact on HR and Employers,” Shrm.org, 2025, https://www.shrm.org/topics-tools/news/trump-administration-unveils-sweeping-ai-action-plan-.
[53] Donald J. Trump, “Preventing Woke AI in the Federal Government,” The White House, July 23, 2025, https://www.whitehouse.gov/presidential-actions/2025/07/preventing-woke-ai-in-the-federal-government/.
[DM1]The 2022 tech layoffs disproportionately affected women, with 69.2% of those laid off being female, based on a WomenTech Network study of 4912 profiles from 54 companies.