The State of Wage Inequality in the Workplace
What you need to know
Overview
To better understand how the wage gap impacts technology workers, we’re releasing our third annual report, “The State of Wage Inequality in the Workplace.” In addition to studying what the gender wage gap looks like across geographies, industries, and roles, we examine how factors such as negotiation, race, and LGBTQ+ status impact compensation.
Hired has unprecedented visibility into tech workers’ salaries because all Hired candidates set a preferred salary and every interview request made by companies includes compensation information. This year, we also surveyed more than 1,200 Hired candidates about their personal experience with pay inequality and asked for their perspectives on how the problem could be solved.
At Hired, we believe we have a responsibility to our community, our employees, our clients, and the hiring industry at large to serve as a catalyst for a more diverse, equitable, and inclusive workforce. This begins with pay equality.
Ultimately, we want to empower candidates to ask for what they’re worth and prompt companies to evaluate and adjust their own compensation philosophies. We hope this report will fuel the conversation about pay equality so that everyone can be a part of the solution.
Same job, same company: Women make less
It is disheartening to see that these numbers have not budged since our 2017 report. However, wage equality for technology workers in the US does fare better than other countries. In Toronto, men are offered higher salaries than women for the same role at the same company 69% of the time, and the average gap is 9%. London follows with men receiving higher salaries 65% of the time, with an average gap of 7%. And finally, tech workers in Paris are in a position similar to the US, where men receive higher salaries 63% of the time, and the average gap is 6%.
A number of factors contribute to the tech industry’s wage inequality problem, including unconscious biases, inconsistent compensation policies, and relying on past income to inform salary offers and expectations. Our data found that 66% of the time, women are asking for less money — 6% less on average — than men for the same role at the same company. Undervaluing their accomplishments may be one reason women don’t ask for what they are worth. Fifty percent of the female survey respondents said they frequently experience imposter syndrome, and 34% say they sometimes do. In an effort to address the gender wage gap, California passed a law in late 2017 that no longer allows employers to ask job applicants about their prior salary. Plus, the employers must give applicants a pay range for the job they are seeking, if requested. It will be interesting to see whether this new law, which went into effect on January 1, 2018, will have an impact on the wage disparity.
We want to empower all candidates to recognize their value, know the market rate for their skill set, and ask for the salary they deserve. Ultimately though, it is the company’s responsibility to establish a compensation philosophy, execute it consistently, and pay fairly. It is promising to see that companies are making up for a portion of the expectation gap in their salary offers, but we still have work to do.
One hopeful finding is women’s increasing representation in the candidate pool. We found that 46% of the time, companies on Hired only interviewed men for a given role. Last year, the same was true 53% of the time. In reverse, companies only interviewed women for a given role 6% of the time both years. Controlling for the fact that Hired’s candidate pool skews more towards men, we also found that women were underrepresented in the candidate pool 16% of the time.
Women are shortchanged and they know it
Our survey data suggests that transparent discussions about salary may be a catalyst to close the gender wage gap. When we asked candidates how they became aware of a pay disparity at their workplace, the majority (66%) cited open discussions with a colleague(s) about salary. Other responses included a conversation with alumni from the candidate’s current company (5%), a conversation with a member of their company’s People/HR team (7%), an online forum (5%), and lastly a transparent company policy around salary ranges (3%).
Despite varying firsthand experiences with the wage gap, the data indicates tech workers aren’t interested in working for organizations that have unfair salary practices. Seventy-five percent of candidates indicated their interest in working for an organization would be impacted if a company received negative attention for having a gender wage gap.
84%
13%
2%
1%
50%
32%
11%
7%
42%
39%
7%
6%
66%
13%
21%
Women fare best for pay in San Francisco
It is important to note that these wage gaps are higher than the United States’ 4% average wage gap reported in the first section of this report. Our US local market data looks at the gap between the average man and the average woman in that market, while the 4% wage gap is based on salary offers for the same role at the same company. Given that men are more likely to be in senior positions that in turn command higher salaries — women only make up 25% of executive, senior level and manager positions at S&P 500 companies — the overarching wage gap is larger.
Women’s representation in the candidate pool, especially for senior positions, is a concern for every US market in our analysis besides Boston. In Boston, women are overrepresented in the candidate pool by 5%, showing early signs that companies in that market are actively seeking diverse talent. It is a very different story in Seattle and Los Angeles, where women are underrepresented by 25% and 29% respectively.
Education technology companies have the biggest gender wage gap
Across each of these industries, women in tech are asking for lower salaries than men — but the expectation gap is lowest in health and finance, at 8%. E-commerce and education technology come in next at 9%, while women in tech positions in the media industry are asking for a full 10% less than men.
Product management boasts smallest wage gap
Not only is there a stronger representation of women in the candidate pool for product management roles, but the wage gap is narrowest for product management salaries, at 4%. Interestingly, our 2018 State of Salaries report found that product management roles come out on top in another category, too — as the highest-paying tech role, at an average of $145K.
The other positions, however, have a longer way to go before closing the wage gap — data analytics, design, and software engineering roles are all offering women 8% less than men. Women are not underrepresented in design roles as well, which makes the wide salary gap for design roles that much more surprising.
The gender wage gap increases with age
Though a number of factors are likely contributing to the lower wage gap among young candidates, including easier access to salary data for entry level roles and parallel career paths for men and women immediately after college, the narrow wage gap is a positive sign. We hope that women candidates are entering the workforce with a heightened awareness of potential bias and accurate assessments of the value of their skills, and thus are asking for higher salaries. Regardless of the reasons, our data indicates that younger women candidates are recognizing their market worth, and are working with tech companies across all industries to close the gap.
As we dug deeper into the data, we discovered the wage gap fluctuates with years of experience as well. Women with less than two years of experience earn $0.98 on the dollar, and it’s the only age group where women are equally represented. On the lowest end of the spectrum, women with 13–14 years of experience earn just $0.92 on the dollar.
Hispanic and Black women are paid the least
Hispanic and black women are at the opposite end of the spectrum, commanding $122K and $123K respectively. In all racial categories, women are paid and expect lower salaries than men.
Additionally, we uncovered that racial minority groups are underrepresented 6% of the time in the candidate pool. In order to increase diversity and equality in the workplace, it’s important for companies to actively seek out underrepresented candidates to be more inclusive throughout the interview process.
LGBTQ+ status has a different impact for men and women
For the first time in the Hired marketplace, however, LGBTQ+ women are getting offered slightly more (1%) than non-LGBTQ+ women. Mirroring this trend, women are also receiving salary offers closer to the amount they expect.
Conclusion
We’re encouraged by the tech industry’s newfound emphasis on pay equality in the workplace, but words are not enough for impactful change. The data in this report underscores the prevalence of deep-rooted issues surrounding wage inequality based on not only gender but also race, years of experience, and LGBTQ+ status. This report demonstrates how we can all play a role in creating a diverse, inclusive, and equitable workplace.
At Hired, we take a long-term view on this issue, and acknowledge that the solution requires cooperation from all sides. While we applaud policies like Iceland’s, establishing laws are not enough. It takes commitment, consistency, and financial investment to solve pay inequality, and that responsibility ultimately falls on companies. By sharing transparent salary data, walking the talk with our own workforce, and offering product features that aim to reduce bias, we’re committed to finding a sustainable solution.
Methodology
This report is based on proprietary data gathered and analyzed by Hired’s analytics and strategy team. The analysis in this study was done using a combination of voluntary, self-reported demographic data and a classifier that identified the gender of the candidate based on their first name. The results were based on a candidate’s self-identified gender, if present, before considering the predicted gender classifier. Only data from candidates with unambiguous gender classifications were used in this report. Data related to race and LGBTQ+ status was collected through an optional, self-reported survey given to Hired candidates that is used only for aggregated research purposes and not shared with Hired clients. The salaries included reflect base pay only and are drawn from a sample set of more than 420,000 interview requests and job offers facilitated through our total marketplace of 10,000 participating companies and more than 98,000 job seekers.
About Hired
Hired (hired.com) is a marketplace that matches tech talent with the world’s most innovative companies. Hired combines intelligent job matching with unbiased career counseling to help people find a job they love. Through Hired, job candidates and companies have transparency into salary offers, competing opportunities and job details. This level of insight is unmatched, making the recruiting process quicker and more efficient than ever before.
Hired was founded in 2012 and is headquartered in San Francisco, with offices in the United States, Canada, France, and the UK. For more information, news, and tips for job candidates and employers, visit Hired’s blog.
