Recent reports on pay equity show that while there is some good news, progress is slow and more work needs to be done.
Hired‘s 2022 Impact Report on the State of Wage Inequality in the Tech Industry shows that the wage gap narrowed if you look at pay equity alone – note that this does not look at total compensation which includes bonuses, incentives, equity, etc. Results vary depending on gender and race and intersectionality.
Payscale’s 2022 State of the Gender Pay Gap Report highlights key findings associated with the controlled and uncontrolled gender pay gaps. The controlled gender pay gap measures “equal pay for equal work” while the uncontrolled gender pay gap measures median salary for all men and all women. Both the uncontrolled gender pay gap and the controlled gender pay gap are important for understanding how society values women.
Best Practices to Accurately Measure Pay Equity
There is a popular misconception that conducting a company-wide survey is necessary to study pay gap issues. Rather, most companies already have the data needed, so no “survey” is required.
The four dimensions required to conduct a pay equity analysis are groups of people (gender, specific ethnicity, intersectional identities), explanatory factors for models (time in company, time in job, geographical variables, performance measures, experience, education), pay type (base and non-base), and comparison grouping (“substantially similar” job titles).
Actual analysis takes only 30% of the effort. The company must expend the rest of the 70% to act upon the findings. Long-term commitment to an iterative process is required from all levels within a company to garner insights, resolve disparities, and conduct a more complex analysis. He cautioned that not including performance metrics makes it difficult for companies to defend themselves in litigation. Biases can creep in when there are no standards for objective performance measurement.
A huge hurdle in achieving pay equity is workforce distribution, also referred to as occupational segregation or leadership parity. Women and men often occupy different roles in companies, with men disproportionately occupying higher-paying positions such as executive or engineering roles. Roles dominated by women are often lower paid or become lower paid over time.
The rationale behind valuing some roles over others should be explored and assessed to determine whether qualifications, skills, competition, etc. actually justify the differential “pricing”. Initial placement, leveling, and salary negotiation for new employees need to be carefully considered to ensure that women with comparable qualifications are not placed in more junior positions or under-paid. Starting pay gaps will only increase over time due to promotions.
Adobe's Goal to Achieve Global Pay Parity
At Adobe, approximately 70% of employees are men and 30% are female, but within functions, the ratio leans closer to 60% /40%. While facing initial challenges around data accessibility, the company continued its efforts. When employees feel respected and valued, they will perform at their best and contribute to the company’s overall success. Diversity of thought and experience is needed for optimal performance.
Four key initiatives by Adobe include:
1. Focus on the pipeline – How do we provide access to individuals at all levels to foster the education, technology skills and opportunities required to move into tech careers?
2. Attract talent – How do we attract a diverse workforce? How do we mitigate biases inherent in our recruiting policies?
3. Employee experience – How do we ensure global pay practices, programs, networks, and clubs that foster inclusion?
4. Industry collaboration – How do we work as a sector to achieve equity and build alliances and partnerships to collectively make change?
In 2016, Adobe set a goal to achieve global pay parity, and was able to claim global parity by the end of the year. While there is no perfect answer, transparency in the methodology and approach to the process is necessary. While exposure may lead to risk of litigation, assumptions must be shared. This opens up space for criticism and thus, improvement.
Adobe’s modeling was based on individuals in the same work, location, and level. However, a frequent problem was that employees were expected to do work that did not reflect their job title – titles were often chosen based on pay range rather than function. And while regression modeling worked fine for the US and India, where employment and representation of diverse groups is high, there was insufficient data to make a meaningful global analysis. Analysts needed to group countries and job families to infer meaningful insights and identify pockets of opportunity.
Key to Adobe’s success in achieving global pay parity was executive sponsorship and support from the board. After analysis, solutions carried a financial cost (adjusting salaries), and required collaborative efforts across levels. Individual conversations had to take place at the management level, regarding who would be affected and how.
Glassdoor's Insights on the Gender Pay Gap
Glassdoor has collected data from nearly half a million companies worldwide, including crowdsourced salaries, employer reviews, and 20 million job postings. When its 2016 gender pay gap study was released, it received widespread attention in industry. This research is used by Glassdoor engineers to build products and tools to increase transparency and reward good practices in the industry.
Glassdoor contributes to better industry practices in two main ways:
1. A product and platform that influences public policy and behavior by providing salary estimation in the job search experience, and a program for pledges and certifications to give employers credit for inclusive policies.
2. Real research about pay with no political agenda encourages competition among employers to do good. This contributes to the macro-solutions for pay equity by influencing culture and pipeline.
Glassdoor data also illustrates the issue of workforce distribution or occupational segregation. Not only were women often disproportionately at the bottom level of jobs, they also were not proportionally promoted. There was interest in tracking why women leave the tech industry. High school students visiting Adobe mention they have heard that computer science majors are too competitive and have weeding-out structures that discourage them. To address pipeline and retention issues, Berkeley and San Jose State University (SJSU) participate in the Technology Pathways Initiative, an alliance of universities addressing the pipeline.