Help your business, close the wage gap

The dearth of women in the high technology sector has been a much-discussed topic in recent years, especially in the U.S., though the problem isn’t unique to that country. There are many efforts today to help boost the proportion of women in STEM fields, starting with early education through getting women more support in PhD programs.

Efforts are even being taken within tech companies to make the industry more hospitable for women, as the industry has a horrible reputation for its “tech bro” culture, as most recently evidenced by the book “Brotopia: Breaking Up the Boys’ Club of Silicon Valley.” About 25 percent of the industry is now women, a proportion that has gotten worse since the 1970s. The women who stick it out have to deal with the unavoidable fact that they’re unlikely to receive the same level of compensation as their male colleagues doing similar work.

Much has been written about the wage gap. Even the most generous studies controlling for things such as age, experience, roles and other factors can’t reduce that gap to zero, suggesting discrimination may factor into lower wages for women by several percent.

These studies are looking at all industries, though. The tech sector is infamous for being among the worst offenders when it comes to gender equality. These companies are doing themselves no favors, either. Diversity, which the U.S. tech sector lacks across the board, is known to provide measurable benefits to companies. Looking just at the effects of women in corporate leadership positions, there are clear advantages.

A study from the Peterson Institute of International Economics shows firms with 30 percent female leadership may be as much as 15 percent more profitable on average than firms with no women at the top. The study shows this more diverse leadership could add more than a percentage point to net margins, and the 21,000 firms surveyed had an average margin of 6.4 percent.

In spite of these findings, women still find themselves making significantly less money than men. The corporate setting doesn’t change this reality. In fact, things are exacerbated even further as women climb the corporate ladder. The tech industry is especially notorious for its lack of female leadership.

In the tech industry, only 21 percent of executives are female compared with 36 percent for other industries. Representation in other roles is also abnormally low.

(Source: PayScale)

Though average wages for women tends to be higher in the tech industry, the wage gap is still substantial. Depending on the position, women might make anywhere from 18 percent to 22 percent less than men in similar positions. The gap for directors is 18 percent, but the gap gets larger as women rise through the ranks. At the executive level, they’re making 22 percent less on average.

The state of women in tech is no secret. In fact, 90 percent of women surveyed are concerned about the industry’s gender ratio. Why are women so rare in the tech industry?

To answer this question, ISACA surveyed more than 500 of its female members worldwide. It found a third of the women believe the primary reason is that most of the tech leaders and role models today are men. Another 22 percent said just the perception that IT is a male-dominated field keeps it that way. Another 14 percent each responded that the lack of work/life balance and lack of encouragement for girls in educational institutions keeps women away from the the industry.

(Source: ISACA)

Women within the industry have also noticed the impact of exiguous female leadership. Among surveyed women, 48 percent said the lack of mentors was a top barrier for women in tech. The other top barriers singled out are lack of female role models, gender bias in the workplace, unequal growth opportunities and unequal pay for the same skills.

(Source: ISACA)

Research time and again affirms the advantages of more diverse workplaces. Female leadership especially seems beneficial for the bottom line. Yet the culture is such that women often lack the support and encouragement that men receive, starting in early education and continuing through college and in professional settings.

The toxic atmosphere for women in tech can be especially discouraging, and often pushes talented women out of companies, if not the industry altogether. One of the more memorable condemnations of the industry was Susan Fowler’s recounting of her experience working at Uber for a year. Fowler’s piece details systematic discrimination and complete lack of support from within the company. Uber may be an extreme example, but Uber employees aren’t alone.

There are many reasons women leave tech or don’t consider the industry at all, and everyone is worse off for it. Some of the solutions require time and changing culture, but the wage gap is something that can be addressed by companies today. It might require changing how things are done internally when it comes to hiring and initial compensation offerings, but companies that can better attract high-performing women won’t be sorry for the effort.

At the Startup Launchpad 2018 conference, a panel on women in tech will tackle the wage gap and related issues on April 11.

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