Out of frustration comes opportunity

Gender pay gap nearly twice as large in tech

This article was originally posted on the Tech North website.And the bonus pay gap is even worse.As a quick follow-up to my analysis of gender diversity in tech last week, Idecided to take a look at the gender pay gap in our industry and how itcompares to others.There has been a lot of discussion about the headline figures, which show that81% of Northern IT and tech workers in technical roles are male.In the Manchester Startups Facebook group, there is an ongoing debate aboutwhat can be done to alleviate the gender imbalance. I have also had a numberof emails asking about the analysis. This is all great – keep the commentarycoming.Looking only at gender diversity statistics by count can be a little twodimensional; it’s important we look at the nuances behind those figures.

Where does this data come from?

From April 2017 it has been obligatory for organisations with more than 250employees to report pay and bonus figures by gender. The figures from thecurrent financial year are due for release mid-2018. In the 16-17 financialyear some companies reported their figures voluntarily, and I have beenlooking into them to try and tease out some nuance.Lucky for me – the data comes with SIC codes; the taxonomy classifyingdifferent industries. The Gender Pay Gap Service have published the datasetwhich allows me to compare tech and non-tech firms using the Tech Nationdefinition of a ‘tech firm’.

The industry comparison

Based on the sample, men are paid on average 17% more than women in the techindustry. By contrast, those firms outside the tech industry pay men just 9%more than women in the sample.The bonus market paints an even bleaker picture – tech firms pay men onaverage 16% higher bonuses, whilst in companies in other sectors this deficitif only 6%.Figure 1 is a scatter plot highlighting the pay and bonus gap in the samplefrom last year. The majority of companies are in the upper-right quadrantwhere companies are paying higher salaries and bonuses to men compared towomen. I have controlled for a number of outliers, but it gives you an idea ofwhere the majority of companies sit.


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Tech is not alone, but certainly one of the worst culprits. Last night thenews broke that the Department for Transport has the largest gender pay gapacross government. Basic pay by gender in the department by is 17% higher formen, much like the tech sector in this sample.

Government and the North

Sage UK is a leader for equality in this data. The Northern tech firm has a 0%pay difference between men and women. Plus, in contrast to the majority of thesample, Sage actually pay 17% higher bonuses to women employees. A fulllisting of government department pay gaps were published yesterday: * Department for Transport: 16.9% * Department for Exiting The EU: 15.26% * Department of Health: 14.2% * Ministry of Defence: 12.5% (for civil servants) * Department for Business, Energy and Industrial Strategy: 12% * Department for the Environment, Food and Rural Affairs: 11.5% * Foreign and Commonwealth Office: 10.6% * Home Office: 10.1% * Department for Culture, Media, Digital and Sport: 3%Tech City UK and Tech North also have much work to do. Our own gender pay gapmeans the median average salary for women is 20% less than for men within theorganisation.

Some caveats

This data is based on a self-reported snowball sample from the financial year2016-17. It is likely that the sample is not totally representative of UKindustry. As providing data was a voluntary exercise it is likely that thefigures are skewed to underinflate the true extent of the gender pay gap. Foreach company the figure reported is the difference between the median averagesalary and bonus for each gender. Where I have aggregated by sector, a meanaverage has been taken.In the past there have been many estimates of the gender pay gap. Earlier thisyear a civil service blog quoted and estimate of the private sector pay gap at23.7%. In reality, we won’t have a complete picture until the figures for the2017-18 period are published later in the New Year.An action plan for closing the gender pay gap in your organisation can befound here. The government’s gender pay gap reporting campaign can be foundhere.This company is fixing a huge problem in the tech industry through salarytransparencySalary negotiation tips can make an impact when trying to increase your pay,but they can only take you so far. A better weapon would be if you could citethe salaries of your counterparts at other companies. This is something that acompany called Levels.fyi can off; they’ve been an integral player in helpingtech employees get the salaries they deserve by demystifying the complex worldof levels at tech companies.

The journey of Levels.FYI

Levels.fyi was born out of the frustration of Zaheer Mohiuddin when he wasleaving LinkedIn for a job at Amazon in 2017. He and his friend, and eventualLevels.fyi co-founder Zuhayeer Musa, were having trouble figuring out wheretheir former roles placed them at their new companies in terms of job leveland, more importantly, salary.Tech companies differ from other types of companies in their compensationstructure as they use a tier-based hierarchy. When you get hired at a largecompany like Google you have a job title but you also have a level that isassigned to you. The level determines the seniority of your role and also whatsalary band you fall into. Google, by the way, has 11 levels for engineerswhile Microsoft levels hit the 60s so you can see how complex this is.Zuhayeer Musa told Ladders, “As we scrolled through a few tech forums wenoticed many questions along the same lines, like ‘At what level can a SeniorSDE/Level 63 at Microsoft be placed at Google?’ After a little more digging,we found similar questions across the web and realized there just had to be asimpler way to map engineering job titles to experience levels. It struck usthat there was a rather large information gap and that Zaheer’s annoyance wasactually an opportunity.”

Out of frustration comes opportunity

The two men began crowdsourcing information about salaries and benefits.“Salary transparency allows for people to get paid fairly. Especially peoplewho don’t have in-network access to peers in the industry. Understandingcompensation especially in tech is important because it consists of multiplevariable components that make up your total yearly compensation. The firststep to getting paid fairly is having a good understanding of what yourcompensation entails,” Musa told Ladders.In simple terms, Total Compensation in a tech role means adding up all theways you are paid: * Base salary * Bonus * Equity (stock) compensation * BenefitsYou can read more about the breakdown of each of these components onLevels.fyi but what this shows is that tech salaries are complex and have alot of factors tied to them. The more the job candidate knows about theirsalary, the stronger their case is for getting a raise or negotiating a newjob offer.This is where Levels.fyi comes in using extensive crowdsourced data that isthen leveraged to create leveling charts to track how levels at one companymeasure up with those at another — seniority at a tech company is ranked on alevel scale — and then how compensation can also differ within those levels.Example of Levels.fyi levels for software engineers at Facebook and Google.Levels.fyi just simplifies the process of determining pay in a very convolutedsystem. You can use your previous level at a company or use Level’s standarddefinitions on their site to get a rough estimate of your salary. Determiningyour level is essential according to Musa. “Leveling can also depend on thingssuch as your interview performance, tenure in level, and scope of work – butthe main reason it is important to align early on leveling is that itdetermines your pay! Companies have salary bands established by level. Onceyou know your level, you can use Levels.fyi to find a high anchor compensationtarget to negotiate up your original offer. Companies will almost never giveyou their best offer upfront, and so it’s worth having a ballpark for how widethe band can get.”

The benefits of pay transparency

Secrecy around pay transparency at tech companies has been an issue for years.In addition to people not knowing what they should be making and whatcompensation to ask for in new roles, this has contributed to the gender paygap. If women, who are notoriously underrepresented in tech roles already,were underpaid in a previous tech role, that lack of knowledge will follow herto a new employer. This continues to widen the gap.“The gender wage gap has definitely been illuminated through our data too. Wedid an analysis on our 2020 dataset across a normalized set of levels andfound that women make less than men at each level. But not only that, the gapcompounds the higher in level you go, which highlights the importance ofnegotiating and ensuring parity from early on in your career,” Musa said.

Levels.fyi expands past tech

As more people in tech began using Levels.fyi other people, including thoseworking in non-technical sectors, also saw the benefits of this service. Thecompany now provides insight into how compensation packages work, and in thepast year, the two founders started offering negotiation services with hands-on training from former recruiters at companies including Amazon and Google. So what is their best piece of advice when negotiating a salary? “The simplestadvice we give people is to not reveal your salary expectations early on inyour process with a company. Instead, you can reflect that question to yourrecruiter and ask what the salary range is for the role. In many states withinthe U.S., employers legally have to provide a salary range if you ask them.”The company has helped negotiate over $75 million in total compensation afteronly offering these services for less than a year. As for future plans forLevels.fyi, Musa says “We want to be the go-to place for anyone thinking abouttheir career. In addition to expanding to other industries, we’re planning tobuild better support for all regions around the world. We already supportparts of Europe, Canada, and Singapore through our negotiation service andhave received a lot of positive feedback so far. Levels.fyi is now rolling out a community aspect to our site where people canhelp each other by asking questions and exchanging information directlythrough verified and pseudonymous identities.Learn more about how Levels.fyi can help you here. 10 tech jobs with the largest gender pay gapWhile the gender pay gap is slowly shrinking in the US, it still persists.Here are the 10 tech jobs most affected, according to Glassdoor.A significant gender pay gap still exists across all industries in the US,despite slight improvements in the past few years, according to a Glassdoorreport released on Tuesday. The research revealed a startling reality: Ifcurrent wage factors remains stagnant, pay equality won’t be achieved in theUS until 2070.The report analyzed more than half a million salary reports on Glassdoor fromthe past three years, using data specific to particular job titles andindustries. This specificity allowed the report to determine both adjusted andunadjusted pay gaps in the US, with the adjusted gap accounting for factorssuch as age, education, experience, industry, job title, and more.SEE: Payroll services comparison tool (Tech Pro Research)The unadjusted pay gap, or the overall pay difference between men and women,is currently 21.4% across all industries, the report found. This means womenearn an average of $0.79 for every $1 men earn. However, when adjusted foroutside variables, the adjusted gender pay gap narrows to 4.9%.While the gender pay gap has shrunk slightly, the US still has a long way togo, the report found, especially in the retail, media, and tech industries.The research determined the following 10 tech occupations with the largestgender gap percentages: 1. Computer programmer (11.6%) 2. Data specialist (11.5%) 3. Systems technician (10.4%) 4. Information security specialist (9%) 5. Game artist (8.8%) 6. Technical advisor (8.3%) 7. Software architect (8.1%) 8. Mobile developer (7.3%) 9. SEO strategist (7.3%) 10. Sharepoint developer (6.8%)Half of respondents (50%) said the responsibility to close the gender pay gapfalls on senior company leadership. Some 32% of employees said they believegovernment legislation is necessary for employees to be paid equally, andanother 32% said they believe new company policies around compensation wouldhelp, the report found.For advice on how to address the gender pay gap in your company, check outthis TechRepublic article.

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Also see

Image: iStockphoto/LeofortThe Gender Pay Gap in TechIn the UK’s growing digital market, employees can expect to earn bettersalaries than the rest of the economy. A report conducted by Tech Nation hasconcluded that the average advertised salary for digital roles is just under£50,000, which is 36% higher than the national average. Over the years, theadvertised pay for digital roles has grown by 13%. On top of this, theindustry is growing 32% faster than the average for businesses in othersectors. The tech economy accounts for nearly 1.6m jobs and also createshighly paid opportunities.Digital technologies can change every aspect of a business and therefore jobsand activities within the technologies are very important. Additionally,having a diverse team to create and implement these technologies are just asimportant to accommodate society. Without diverse teams, businesses could faceclaims of discrimination from products and services and be at financial risk.Although the UK’s growing market is benefiting the overall economy andproviding thousands with jobs, why is the tech industry still deemed as a maledominated sector. Not only this, but it has become increasingly difficult forwomen to enter the sector due to stereotypes, discrimination and the genderpay gap. Studies have consistently shown that the gender pay gap is real, eventhough females and males are possessing the same skill set.

Gender pay gap

Around 78% of large organisations admitted to having a gender pay gap in thetechnology sector. It was found that males were earning more than females.Only 14% of businesses have a median pay gap for women and 8% have no genderpay gap at all. Women earn up to 28% less than their male colleagues in thesame tech roles.It has been found that the gender pay gap in tech is found more in smallbusinesses where the gap is between 19-20%. However, to try and show theirsupport, large companies have revealed a gender pay gap report and the figuresaren’t exactly better. Googles report shows that women earn 83p an hour forevery £1 each male earns, and women’s average bonuses are 43% lower than men.Apples report revealed that women earn 74p for every £1 that their malecolleagues earn and only 88% of women receive bonuses compared to 94% ofmales.There are several factors that could affect the gender pay gap in tech, suchas working in different hierarchy positions, skills and previous experience.However, for those who do have the same set of skills and experience, it isunacceptable for large companies who have such a high reputation like Googleand Apple to produce such poor gender pay gap results.

Gender age pay gap

Believe it or not, another factor that can affect the pay you receive fromtech companies is your age. A survey on 40,000 people revealed that both payincreases and promotions peak at the start of people’s careers. Individualswhose ages are around 60 have a fall of around 3% compared to in their youngeryears. Almost one in five employees can expect to be promoted in their earlyyears. Yet, the rate of the promotion drops for those in their late 20s and bythe time you’re 50 you are only 7% likely to be promoted.However, recent studies have shown that the largest gender pay gap in tech isin early careers, as women under 25 are earning on average 29% less than malestheir age. The study goes on to suggest that this could be because women areprogressively overcoming bias which is seen as a disadvantage over the courseof their careers. Alternatively, it could be a sign of changes in the industryor society over recent decades.More must be done to change the gender pay gap to encourage more women intothe tech sector. Company cultures can also have an impact on the lack of womenin tech, so businesses should try to change their culture to become moreinclusive. Promoting shared parental leave, maternity benefits, flexibleworking and child care support as just some ways a company can appeal towomen. Businesses must educate not just themselves but current staff on thebenefits that a diverse workforce can have.

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