A new comprehensive report on pay equity within the European workforce was published by Ravio, an HR technology company that analyses real-time compensation and employment data for global tech companies.
The data reveals that whilst European tech's adjusted gender pay gap is 2.5 per cent, the industry’s unadjusted gender pay gap is much wider, 25 per cent, due to a lack of female representation at senior levels, and with only 21 per cent of executive positions held by women.
‘Equal pay for equal work’ - not so soon
When we think and talk about pay equity and what it means, it naturally comes that it can be described as ‘Equal pay for equal work’ or employees who perform work of equal value should receive similar compensation for it. But it’s not always the case, and not in the tech industry.
The report reveals how the tech industry is performing when it comes to improving pay equity, and what the industry can do to fully close the gender pay gap.
According to data, the “unadjusted” gender pay gap in the European tech industry is 25 per cent (the median earnings across all job functions, levels, and countries) while the “adjusted” gender pay gap (median earnings of men compared to the median earnings of women for similar roles in the same country) is 2.5 per cent.
These numbers suggest some initial progress in pay equity but also highlight a significant representation issue, contributing to the disparity between the unadjusted and adjusted gender pay gaps.
Merten Wulfert, founder and co-CEO at Ravio comments:
“The European tech industry seems to be moving in the right direction when it comes to ensuring equal pay for equal work. But more needs to be done, and some geographies and job verticals still have a long way to go. However, the much bigger problem affecting our ecosystem is the severe underrepresentation of women at senior levels. We are nowhere close to equality on that front. Very few companies are making this a top priority, and even fewer have truly solved this issue.”
A lack of female representatives, especially at senior levels
The key problem of gender pay inequality is reflected in the fact that women are less represented, especially in senior roles. As a result, there is a disparity between the unadjusted and adjusted gender pay gaps.
The report reveals that women make up less than 50 per cent of employees at most job levels, while only 21 per cent of executive positions are held by women. One reason for these numbers is because male tech executives stay in their role 46 per cent longer than female executives.
Chief People Officer at Ravio Vaso Parisinou shared:
"Our survey results show that women often exit these roles prematurely due to challenges like unsupportive work environments and balancing family responsibilities. To improve retention, companies must foster supportive policies and provide growth opportunities to women.”
For the same role, women receive lower salaries than men
The problem of pay equity, as revealed in the report, almost always starts at the first phases, or more precisely at the point of hire. That means that women have been offered lower compensation than men at the point of hire, which is evident across multiple roles and points of entry.
For example, a male software engineering manager in the UK receives a new hire salary 3.3 per cent higher than their female equivalent. Although women receive similar rates of promotions and pay increases to men, it means this pay gap is carried forward rather than being closed.
Merten Wulfert said:
"Pay equity progress can only go so far if disparities are introduced at the point of hire. To truly close the gender pay gap, companies must ensure fair and transparent hiring practices to ensure every employee is valued fairly from their very first day."
High representation drives up the unadjusted pay gap
The UK's unadjusted gender pay gap is 31 per cent, well above the European average, while the adjusted pay gap drops to 1.4 per cent, the smallest among all countries analysed in the report.
As highlighted, the UK has the highest percentage of women in senior positions (27 per cent), but still has one of the highest unadjusted pay gaps (31 per cent) partly because of the significantly high proportion of men in senior roles, too (42 per cent).
On the matter, Merten Wulfert commented:
"Perhaps unsurprisingly, one of the key factors preventing women from rising to senior positions at the same rate as men is having a family. Women still shoulder most of the work of raising children, in many cases taking a step back from their careers to do so. This is much less common for men. There are proven measures companies can take to level the playing field, but very few do. For example, only 25% of UK tech companies offer more than 5 weeks of paid parental leave for men, even though research has shown clear benefits of this approach for women (as well as the family overall). Much more needs to be done on this front."
Lead image: Freepik
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