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Does tech have a gender pay gap problem?

It’s time tech businesses stop burying their heads in the sand – the gender pay gap can’t be ignored

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The gender pay gap has never been higher on the political agenda. In the UK, David Cameron wants to eliminate the gender pay gap within a generation. In October 2016 it becomes a legal requirement for large employers to publish gender pay gap data, with the first reports due in April 2017.

In June 2016, a host of US business including tech giants such as Amazon, Pinterest, Airbnb and Spotify signed a pledge to conduct annual gender pay gap reviews.

There's considerable scepticism in some corners of the tech sector about whether a gender pay gap even exists, whether it's something that businesses should be trying to fix, or is simply the result of women's professional and lifestyle choices.

A series of pay reviews undertaken by big tech businesses seemed to support the view that the gap is negligible or non-existent: Amazon announced in March 2016 that women earn 99.99 cents to every dollar that male employees make, shortly after Intel announced similar results.

But a lot depends on what you measure. It should go without saying that men and women in identical jobs with identical qualifications and experience are paid the same. But that doesn't mean that a business treats women equitably. 

If women make up only a tenth of your senior management team, the chances are that across your workforce as a whole, women are earning less, and you have a gender diversity issue.

Underrepresentation

A look at Amazon's investor relations page shows that women make up a small minority of the directors and corporate officers. The company itself reports that only 24% of its managers are women. Amazon is far from alone in being male-dominated at senior levels. Despite the visibility of female tech leaders such as Sheryl Sandberg and Susan Wojcicki, women are underrepresented in senior technology roles: only around 14% of CTOs are female.

What you count as ‘pay’ also makes a big difference to the outcome. Amazon's pay review excluded stock, often the most valuable element of executive compensation and one which is more likely to be individually negotiated, which is where unconscious (and even conscious bias) may creep in. 

Underrepresentation isn't the only factor contributing to the pay gap. There's also the question of which jobs businesses choose to pay highly and why. Historically, many female-dominated jobs have been paid at lower rates than male-dominated jobs even when the level of skill involved was comparable. 

A study by Cornell University published in 2016 revealed troubling evidence that when women's participation in a male-dominated field increases, pay for those jobs actually drops: when more women are doing the job, it seems it's not valued as highly. 

Read more about women in IT

What should businesses do?

The gender pay gap isn't an issue which tech businesses can ignore. Gender pay gap data reporting obligations already exist in many European countries, are being introduced in the UK and are certainly on the political agenda in the US. 

Investors are also increasingly interested in this issue: it was an Amazon investor which placed pressure on the company to report its data. Increased awareness of the issue among candidates may also place pressure on businesses competing for key talent.

Addressing these issues is not straightforward and there is no consensus about how far businesses should go. One facet is attracting more female applicants in the first place. Tech has a reputation for having a laddish culture: the ‘brogrammer’ Silicon Valley stereotype may well discourage female applicants. 

There are more subtle factors at play, too: often the language of tech job adverts is gender-coded, using sports analogies or terms such as ‘rockstar’ which women identify with less readily. In the UK, tech businesses are being encouraged to sign up for the Tech Talent Charter to eliminate such practices and improve workforce diversity (for example, by making a positive effort to interview female candidates). 

Another aspect is improving retention and career progression for female staff. One controversial issue is the impact that childcare and other caring responsibilities has on women's career progression and how far businesses should go to try to overcome this. Offering more flexible and innovative working arrangements may help to lower attrition rates among female employees and help them to progress up the career ladder – and the positive effect may not be limited to female staff.

Finally, something that should come naturally to tech businesses is to interrogate their data. Analysing pay across the organisation, assessing how it is determined and identifying discrepancies will help the business determine whether there are disparities in pay and career progression and how these can best be tackled. There is no one-size-fits-all solution – but burying one's head in the sand is no longer an option.

Alexandra Mizzi is a senior associate in the employment team at law firm Howard Kennedy

This was last published in July 2016

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Not as much today as it was years ago. Old school thinking was women were less reliable and would miss more time from the job because of family issues. I have no issue with equal pay for an equal job, any job, with the same responsibilities and risks. I know some women who work harder and take more pride than their male counterparts.
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Candidates get the pay they accept, right? No company would have official pay rates differentiated by gender. But it is possible, however, that there might be a gender-based difference in negotiation skills. Need to address this part of the hiring process.
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