Just how far has the US come in narrowing unfair wage gaps? Unfortunately, not very, according to a just-released report from ChartHop.
There have been some, if minor improvements. The new 2020 Charting Better Workplaces report finding that men earn 22% more than women is an improvement over 2018’s report, which found men earned 30% more than women. Still, it’s a slow slog to close the gap, and one that might surprise those who assumed equity would be in practice by now.
SEE: COVID-19 workplace policy (TechRepublic Premium)
The report was compiled from compensation and demographic data of more than 16,000 employees and revealed that employers need to exact change to close gender and race gaps. The report also noted that while most human resources (HR) departments do not have an option for non-binary designations yet, the number has increased, and that the salaries of non-binary employees are broadly closer to women’s in this context.
Black and Hispanic tech employees earn even less money than their white colleagues: In fact, white workers earn 44% more than their Black colleagues, and 33% more than their Hispanic colleagues.
- The average salary for a white, male employee in 2020 is $130,418.
- The average salary for a female employee in 2020 is $98,781.
- The average salary for a Black employee in 2020 is $90,873.
White tech employees also earn 33% more than Hispanic employees and 2% more than Asian employees.
And the race wage gap is actually widening, not narrowing. The report found that white employees earn 24% more than colleagues who are BIPOC (Black, Indigenous, People of Color), which marks a six percentage point rise in 2020.
While Black and Hispanic employees make up 8% of the report’s sample workforce, they only receive 6% of the compensation (an increase since 2018, when it ranged from 4% to 5%).
White employees take home 65% of the compensation and make up 61% of the workforce.
One of the most significant drivers of wealth in the technology industry is the distribution of equity, yet men have 63% more ownership in a company than women, even though women make up 40% of owners, but only own 21% of the shares.
In terms of salary-based compensation, ChartHop’s research found women are increasingly taking home a larger percentage of compensation.
- In 2018, women took home 27% of the compensation
- In 2019 women took home 31% of the compensation
- In 2020 women took home 33% of the compensation
Since 2018, women in the tech industry remained constant at 44%, and women are still taking home compensation disproportionate to their representation in the industry, but these numbers are increasing. While men made 30% more than women in 2018, that number has decreased to 22% in 2020.
Seniority as a major role in wage gaps is a common, although apparently not as big of a deal as previously. The report pointed out that it’s often explained that for higher-paying positions, women are not as well represented in higher paying leadership roles– the data showed 61% of managers and 71% of executives are men.
Male managers make 16% more than women: The 2020 average male manager’s salary is $168,784, compared with the 2020 average female manager’s salary at $145,656.
Progress in engineering; sales needs work
ChartHop’s report also reviewed wage gaps in industries, and noted an improvement in engineering, where men earn 7% more than women; 21% of the engineering workforce in ChartHop’s 16,000-person data sample are women who earn 20% of total compensation. Compared to the overall gender salary gap of 22%, men earn 7% more than women in the engineering field:
- In 2020 the average man in engineering earns $130,535
- In 2020 the the average woman in engineering at $122,180
Men in non-management sales positions earn 22% more in base salary at $91,110, compared with women earning only $74,404. Even though seniority and experience are contributing factors to the gap, even entry-level roles see a difference of 9%.
According to the report, women make up 33% of the sales team, yet take home only 29% of the sales team’s base compensation expenses.
Consider, too, that women make up a larger percentage of sales teams, as compared with engineering teams–21%–although still less than the average across departments of 44%.
How to close the wage gap
Key actions organizations can do to help close the wage gap:
- Track employee data across multiple dimensions such as race, gender, department, and title. With the right data, organizations can regularly evaluate salaries to make changes before problems compound.
- Build guardrails around compensation and promotion reviews–know proposed changes’ impact prior to executing. Companies can opt for objective criterion, rather than the bias of a manager’s discretion. Data-driven guidelines will ensure bias is removed during the process.
- Open source: For accountability and meeting goals, make Diversity, Equity, and Inclusion (DEI) progress, figures, and initiatives available to employees and to the public
- Even if policies must be changed, provide BIPOC, women, and gender non-binary people the clear path to management positions. Build clear pathways to management for BIPOC, women, and gender non-binary people. Within the HR structure of promotion, remove bias.
- Market-rate data should inform compensation decisions and leaders should rely on data to remove room for bias.