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article imageQ&A: What can technology firms do to close the gender pay gap? Special

By Tim Sandle     Apr 13, 2019 in Business
The tech industry is fighting an uphill battle when it comes to gender equality. One study suggests men are offered higher salaries than women for the same job roles 63 percent of the time. Rachel Ernst outlines what can be done.
According to Rachel Ernst, VP of Employee Success at Reflektive, to solve workplace issues like gender inequality, leaders must understand the extent of the problem within their organizations. Data is critical to gaining these insights, but it often takes months to gather, interpret and act on the results. Reflektive’s people management suite is helping business leaders visualize data and track trends across the company.
Rachel Ernst states that data integration can help organizations identify and manage the biases that lead to a lack of diversity and pay disparity within an organization.
Digital Journal: What is the typical size of the gender pay gap in technology?
Rachel Ernst: According to research conducted by Hired, women in technology are offered an average of four percent less than men; however, this gap varies significantly from one company to another, with some offering women up to 45 percent less. A more revealing statistic exposes 63 percent of the time, men are offered higher salaries than women for the same role at the same company.
DJ: Is the gender pay gap bigger in technology compared with other sectors?
Ernst: Most industries face a pay gap. Research suggests there are other sectors and occupations with larger pay gaps, including financial advisors, real estate brokers and paramedics.
The gender pay gap also varies by geography. Wage equity for technology workers in the U.S. is better than other global locations, including Toronto, London and Paris. Additionally, San Francisco — where Reflektive is headquartered — has the smallest gender wage gap compared to other technology hubs in the U.S.
It’s important to note salary may not tell the whole story, especially in an industry which tends to generate wealth through stock options. Women in tech only get about half of the company equity men receive, indicating a much larger gender pay gap than salary alone would suggest.
DJ: Is the problem linked to too few women entering technology roles?
Ernst: Evidence of lower salaries and equity among women who are employed at companies that award higher pay and more stock options to men suggests the problem goes far beyond women’s representation in the industry. There are many causes for gender pay gap which can be found by looking at daily decisions made about promotions, salary increases, who works on which projects, and what feedback is given to men vs. women — but underrepresentation is a persistent issue.
Women enter the workforce at about the same rate as men, but statistics on entry into technology roles does not mirror this diversity. According to Stanford research, 40 percent of male graduates with STEM degrees work in STEM-related jobs but only 26 percent of female STEM graduates do. Additionally, only 25 percent of computing jobs are held by women, and that figure is even less for engineering roles. Even more discouraging is the low percentage of women who reach leadership positions in the technology industry. This is pervasive across most industries. According to McKinsey & Lean In’s study of Women in the Workplace, only 23 percent of C-Suite roles are held by women.
DJ: Are technology firms institutionally biased against women?
Ernst: Every company has its own culture, so it would be unfair to make a broad-brush claim about an entire industry. With that said, the data about women’s pay and representation speaks for itself. Hired’s study reveals both men and women believe gender affects pay — 74 percent of women believe this, and 53 percent of men agree. And this perception matters.
In the same study, 84 percent of women and half of the men surveyed said if a company received negative coverage for a gender pay gap, it would affect their interest in working there. What this tells us is in addition to a moral obligation, companies have a business incentive to take a proactive approach to combating gender bias. If they gain a reputation for bias, it can hurt them in the competition for talent, which is currently at an all-time high.
DJ: How can businesses better understand the size of the problem in their firms?
Ernst: You can’t fix a problem you don’t know exists. Data is the single best way for companies to understand the gravity of their gender pay gap issue, assuming there is one.
You can begin by reviewing and comparing salaries and promotion rates between men and women in your organization. Are you paying men and women in the same job who have similar levels of performance equally? Are you promoting men and women at similar rates?
Because promotions typically align with a pay increase, and considering the fact women are promoted less frequently than men across industries, this is another way the gender pay gap is perpetuated. According to the Women in the Workplace study, for every 100 men promoted to manager, only 79 women are.
At Reflektive, we conduct compensation analysis at least twice per year to ensure we are paying all of our employees equitably. We do this by reviewing pay by multiple demographic filters, including (but not limited to) level, gender and department. We recommend all companies do this kind of analysis at least once (if not twice) per year, depending on growth rates, to ensure pay equity across the organization.
DJ: How can Reflektive’s people management suite help businesses to gather and interpret data?
Ernst: Data can be intimidating, especially for those not in a data-centric role. Most companies don’t employ a data scientist, so it’s crucial for HR and people managers to be able to easily (and in real time) collect, access and interpret data affecting their teams and ultimately business success.
Reflektive’s people management suite simplifies and consolidates disparate HR focuses into one integrated solution. It provides a comprehensive view of a company’s most important people metrics with an intuitive dashboard and easy-to-understand visualizations, empowering HR leaders and managers with insights needed to take action. It also allows companies to stack performance and engagement insights on top of existing HRIS data to better analyze inclusion, compensation, attrition and other factors that contribute to pay equity and diversity.
DJ: Can the software help with other diversity metrics?
Ernst: Absolutely — Reflektive’s strategic people management suite enables easy identification of diversity issues and inequalities. It is designed to reveal important insights, which can help identify potential rater, gender and ethnicity biases, giving employers a chance to calibrate performance and promote fairness and pay equity proactively.
Since biases are often unconscious, they can be tough to address, but being able to identify them with data is a good start. Reflektive’s People Intelligence tool allows companies to monitor changes over time so they can establish benchmarks and mark progress.
DJ: Has the use of Reflektive’s people management suite led to any firms changing their recruitment or promotion policies?
Ernst: Using Reflektive’s people management suite has a transformative effect on companies as they work to build a feedback culture that drives employee performance and growth. It ripples beyond real-time performance reviews, connecting team members in more meaningful ways and creating a more inclusive organization overall. Now that Reflektive offers People Intelligence, our customers are able to create dashboards to monitor hiring and promotional trends, assess their current state and make any needed changes to ensure fair recruiting and performance management practices.
Ultimately, pay equity and accompanying biases affect the entire employee lifecycle, from the interview stage to company exit. It is crucial to understand how your organization is behaving at each of these stages, and data is the best place to start. Creating awareness across all groups involved in pay equity — including recruiting, compensation, finance, executives, HRBPs, managers and HR analytics — allows your company to address it every day in every decision.
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