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7 November 2016

IT companies should monitor starting salaries

An interesting analysis from the IT sector shows how women’s expectations help to determine what they get paid and highlights the important role that companies play in the process.

The global IT recruitment specialist Hired set out to analyse its salary data set across gender, location, role and company type. Because Hired candidates set a preferred salary and all interview requests made by companies on Hired’s platform include compensation details, Hired has a unique insight into the salaries that men and women ask for and what companies offer them.

The report is based on information gathered and analysed by Hired’s Insight Manager, Dr Jessica Kirkpatrick, and the data came from an analysis of more than 10,000 offers across approximately 3,000 candidates and 750 companies.

To better understand how the gender wage gap plays out across different roles, Hired looked at women in the fields of software engineering and tech sales. Sales has long been seen as a male-dominated profession, a perception that Hired’s data supports. Women working in tech sales are offered roles with a median salary of 5 per cent less than their male counterparts. In software engineering the problem deepens: women are offered 9 per cent less than their male colleagues, the equivalent of nearly five weeks’ wages.

Entry-level men outearn their female counterparts by 7 per cent, increasing to 10 per cent for men and women with between 2-6 years of experience, reaching 31 per cent for individuals with more than six years’ experience. Kirkpatrick surmises that this, in turn, has an impact on the salaries that women request. Women with less than six years of experience ask for roughly the same salary as their male counterparts; however, as they reach six or more years of experience, they ask for 18 per cent less. The fact that women lower their expectations over the course of their careers after receiving lower salaries than the men they work alongside underscores the importance of companies ensuring equal pay early on.

When male and female candidates in the UK ask for the same salary, the wage gap almost disappears, which is similar to the findings of Hired’s US report. So, one of the most important conclusions from this report is that women who know their worth in the interview and job searching process can and do command a salary on par with men, but the report is clear that  companies play an equally important role in this process, and should consider employing a data-based approach to compensation that determines salary based on an individual’s market worth and not their previous — and possibly biased — salary.
Company-wide salary audits and regular training to ensure that there is no unconscious bias in the pay and promotion process are also good ways to close the wage gap.

To read the report, click here.

What Hired doesn’t say – and companies may not realise – is that, rather than giving rise to an equal pay claim, which is a long and complicated process, inequality in starting pay gives rise to a straightforward claim of sex discrimination in the terms on which the job is offered.  Monitoring of starting salaries, which is less resource intensive than an equal pay audit, is an easy way to identify and challenge this kind of inequality from day one.

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