The Tech Industry’s Gender Wage Gap: Where Are We Now?
Hired Looks At the Data For 2017
Each year in the spring, the nation recognizes Equal Pay Day, a symbolic date created by the National Committee on Pay Equity that highlights the day when women’s earnings “catch up” to what men earned the previous year. The exact date changes each year based on census data on the national gender wage gap, though it generally finds that women earn somewhere between 78% and 82% of what men make on an annual basis.
In honor of Equal Pay Day 2017, and for the second year in a row, Hired has dug into its proprietary data to release our annual Women, Work and the State of Wage Inequality report. Based on the tens of thousands of job offers made on our platform over the last year, our report is one of the most detailed and accurate analyses of the tech industry’s gender wage gap available anywhere. This is because of Hired’s unique position in the hiring process, in which we facilitate everything from the initial interview request all the way to the final job offer, and because much of our analysis is based on job openings for which men and women are both under consideration. This enables us to see exactly how similarly qualified men and women set their salary preferences for identical work, and what companies in turn, offer them.
If you follow Hired, you know that the issue of gender equality in the workplace is one that we’re very passionate about. We spend quite a bit of time educating clients, candidates and the industry at large about the impact of this issue. As a CEO and as the father of a 16-year old daughter, it’s also an issue on which I’ve developed a particularly strong perspective. And my take is this: change is not happening fast enough.
Our research revealed that women face a one-two punch during the hiring process where they are penalized at both the interview and offer stages. Even when controlling for the fact that our candidate base mirrors the tech industry as a whole by skewing more male, we found that women are underrepresented in the interview pool two-thirds of the time. When women do make it into the consideration set, they receive lower salary offers than men for the same job at the same company 63% of the time.
This is worth repeating: women are being given lower offers than men for the exact same work nearly two-thirds of the time. While this number has decreased slightly from last year’s analysis, when we found that women were given lower offers 69% of the time, it’s still a statistic we should all be shocked and concerned about.
Digging further into this issue, we see that there is a strong correlation between the salaries that candidates ask for and the ones that they receive, and unfortunately, salary expectations and negotiations often work against women. In looking specifically at the roles for which both a man and a woman were given an initial offer on our platform, we discovered that women set their expectations lower than men 69% of the time, and ask for an average of 4% less than men.
This is one of the aspects of the wage gap that Hired’s Talent Advocates are uniquely well positioned to help address. Each candidate that comes through our platform is assigned a Talent Advocate who can provide information and advice about prevailing market rates for their specific skills and experience, which can be especially helpful in the case of female candidates whose previous salaries may have been negatively impacted by bias. Additionally, our product team is working to make salary information more transparent for both candidates and clients so both sides can make more informed decisions in real time.
The difference between what men and women are offered for the same role increases from 4% to 5% when we compare initial offers, which are made at the beginning of the interview process, with final offers, which are made after all interviews and salary negotiations are complete. This further highlights the negative impact that negotiation has on the gender wage gap, and echoes other studies which have found that women are less likely to be successful than men in negotiating their salaries.
There is a small but important silver lining to all of this. For the second year in a row, we found that women who are earlier in their careers actually ask for and receive more money than their male counterparts. In fact, not only did entry-level women on our platform ask for even more money than their male peers this year, but we also didn’t see the wage gap start to appear until candidates were an average of at least six years into their careers, whereas last year it materialized around the four year mark. This is a positive indicator that this cohort — many of whom likely belong to Gen Z — could be the generation that finally closes the gap.
I would encourage you to read the full report for more details, including an analysis of what the gap looks like for more senior candidates and data that we’ve released for the first time on how race and LGBTQ status intersect with gender to affect compensation.
I hope that it will inspire you as it has inspired the team at Hired to continue thinking about how to solve this issue. There is plenty of evidence that companies with more women perform better on a variety of metrics. Presumably one of the keys to keeping these women motivated and in the workforce is compensating them fairly, which is why it’s so important for us to continue trying to understand and advance this issue.
When I joined Hired four years ago, I knew that we had a powerful opportunity to help close the wage gap. Along with the rest of the company, I remain committed to doing so by releasing data that highlights and quantifies this issue, championing hiring best practices, arming our candidates with information, and building product features that level the playing field, not just for women, but for all underrepresented groups. While much of this stems from the responsibility I feel to Hired’s clients, candidates and employees, it’s also a responsibility I feel to my daughter. When she joins the workforce in a few short years, I want to be able to say I did everything I could to help level the playing field for her.