Hired’s 2021 Impact Report - Wage Inequality in the Workplace

Hired’s 2021 Impact Report – Wage Inequality in the Workplace provides unprecedented visibility into wage inequality and discrimination in the tech industry based on Hired’s marketplace data and survey results from over 2,000 tech employees. The best way to narrow wage gaps and make pay more equitable is increasing transparency – something we aim to do through this, and other annual reports.

This year, in our fifth annual report on Wage Inequality, we dug deeper into the data to truly uncover how things like sexuality, gender identity, age, and race compound the wage gap we already see with gender. Based on the data, it’s clear that while progress on increasing workplace equality is being made, we still have a long way to go. We continue to see that groups who are paid less also expect lower salaries than their white, male counterparts – even if they have the same experience. Underrepresented groups can be stuck in a cycle of lower pay if they have no way of truly knowing how much they deserve in compensation for their role. We hope this report can give employers the confidence that increasing transparency and narrowing the wage gap is paramount to their success as a business. We are working towards creating a world where all hiring is equitable, efficient, and transparent – we know with the right commitment, that goal is achievable.

The Wage Gap for underrepresented tech talent is narrowing but still prevalent. Black and Hispanic women continue to see the widest gap. 59% of the time, men were offered higher salaries than women for the same job title at the same company in 2020, compared to 65% in 2019. In terms of the pay difference, companies offer women 2.5% less on average than men for the same roles, compared to 4.4% less in 2019.

The Expectation Gap is strongly correlated with the Wage Gap. We continue to see that groups who are paid less also expect lower salaries than their white, male counterparts — even if they have the same experience. The gender expectation gap, for example, decreased from 5.8% in 2019 to 3.2% in 2020, showing a clear correlation between the expectation and wage gap.

Gender and race discrimination remain prevalent in the workplace, directly contributing to unequal pay. White employees are less likely to have discovered they were being paid less than a colleague in the same role. On the occasions where they do discover a discrepancy, they receive a salary increase after surfacing the discrepancy 28% of the time. Comparably, Black or Hispanic employees receive salary increases 20% and 15% of the time, respectively.

Companies need to take meaningful steps to create more inclusive and transparent work environments. Over 70% of tech candidates believe employers need to increase salary transparency across their company.

Prioritizing DE&I is a requirement for companies to attract diverse, talented candidates. Companies need to make a genuine commitment to advancing initiatives that foster equality. Over 83% of survey respondents said that it is important that their employer takes steps to promote diversity and inclusion.

Certain markets have more work to do than others when it comes to narrowing the gender wage gap but all showed women are consistently offered less than men. In London, the gender wage gap remains at 10%, whereas it’s down to 5% in the San Francisco Bay Area. Most markets are in between these extremes, with Chicago and Boston at 8%, New York and Toronto at 7% and Seattle at 6%.

Black candidates saw wages that were 4% lower than the baseline in 2020 vs. a gap of 5% in 2019. By contrast, Asian candidates saw no change, receiving offers that were 1% lower in 2020 and 2019.

White employees are less likely to have discovered they were being paid less than a colleague in the same role. On the occasions where they do discover a discrepancy, they receive a salary increase after surfacing the discrepancy 28% of the time. When Black or Hispanic employees surface pay discrepancies, they receive salary increases 20% and 15% of the time, respectively.

Race contributes significantly to the expectation gap, as low wage expectations are most prevalent in minority women compared to White women or minority men. For example, Black women expect salaries that are 10% lower than those of their white male counterparts.

Younger employees are more likely to ask for, and receive, more equal wages than in past generations – a trend that has continued YOY. And, when entry-level employees are paid more equitably, it increases their chances of being paid fairly throughout their careers. Continuing to increase wage transparency and reducing the expectation gap for entry level employees could have a profound, long-term impact on wage inequality as a whole.

Candidates who are either self-taught or learn through a bootcamp are getting more interviews than those with traditional degrees but expect salaries that are up to 6% lower than the norm – and are paid less as a result.

The best way for businesses to show candidates that they are serious about creating an equal workplace is by increasing wage transparency, hiring a diverse range of candidates, and increasing the diversity of their senior leadership team. Over 70% of candidates believe employers need to increase salary transparency across their company.

Salary transparency is a retention problem. Two-thirds of tech employees report learning they were being paid less than their counterparts for the same work, and from those, over 40% look for new positions. If companies chose to promote transparency earlier on, they’d be saving costs in the long term due to higher employee fulfillment and increased retention.

Based on survey results, 36% of men report experiencing discrimination in the hiring process compared to 57% of women.

This report is based on proprietary data gathered and analyzed by Hired’s strategy and analytics team, examining interview request salary offers and candidate salary expectations on the Hired marketplace from January through December 2020. 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 are 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, ethnicity, age, education and LGBTQ+ status was collected through an optional, self-reported survey given to Hired candidates that garnered over 2,000 responses. The survey 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 226,000 interview requests and job offers facilitated through our total marketplace of over 10,000 participating companies and more than 245,000 job seekers.

Note: When talking about the wage gap, we refer to the difference in salary that was offered by an employer after an interview. The expectation gap refers to the difference in preferred salary between various groups of candidates, i.e., what the candidate lists on their Hired profile as their preferred salary.

Hired is the largest AI-driven marketplace that matches tech and sales talent with the world’s most innovative companies. Backed by the world’s leading talent advisory and solutions company, The Adecco Group, Hired combines intelligent job matching with unbiased career counseling to help people find a job they love and reach their full potential. By providing accurate, real-time information, access to equal opportunity, efficiency, and transparency, the Hired platform serves as the backbone for hiring managers, recruiters, and C-level executives to surface the best talent and build amazing, diverse teams. Hired is committed to building equity in the hiring process through a more representative talent pool, using bias reduction features, customized assessments, and salary bias alerts to help remove unconscious bias when hiring. To learn more, visit hired.com.