Want to Be Paid Fairly? Join a Tech Company with More Women Executives

Contributed by Bridget Frey

It’s no secret that men outnumber women in computing related jobs. Women in tech describe feeling like they aren’t valued as equally as men or given the same opportunities as their male counterparts. And while the intelligence and value that women bring to the tech industry cannot be disputed, are they being paid equal to men?

First, we already know that companies with more women executives are more profitable. That is pretty fantastic, right? Even more fantastic is that these companies are also paying their female employees more fairly, according to a new analysis by Redfin and PayScaleIn fact, the gender pay gap is half the size at tech companies with more women executives!

How, you may ask? For this study, Redfin examined the gender makeup of executive teams at 31 of the largest U.S. tech companies. Companies where women made up more than 25 percent of the executive team were considered to have a high rate of female executives, while companies with fewer than 20 percent were considered to have a low rate. Companies where women made up 21 to 24 percent of the executive team were not included. PayScale then analyzed 6,562 salary profiles of people who reported working for these companies between June 2015 and 2017.

The gender pay gap was observed in two ways. First, salaries were compared between men and women at similar levels and with similar years of experience. Then, the median salary for men and women, regardless of job level or experience, were examined.

dollar earnings

At companies with more women executives, women earned 98 cents for every dollar that men in similar roles earned. The two-cent pay gap might not sound like much, but for a man earning a $100,000 salary, a woman would earn $96,000 at a company with fewer women executives, compared to $98,000 at a company with more women at the top. This disparity adds up to tens of thousands of dollars over a woman’s career.

And the pay gap difference is a whopping 14 cents when you look at all men and women without controlling for whether they are in similar roles and levels. This suggests that companies with a high percentage of women execs also have more women in other highly-paid roles. This is what PayScale refers to as the "opportunity gap."

Employee Satisfaction is Higher for Men and Women, Too

It may not be surprising that companies with more female executives have a narrower pay gap. But our study also showed that both men and women report a higher level of job satisfaction at companies with more female leaders, and fewer of them say they are considering leaving in the next six months.

Employee Satisfaction

Employee Turnover

 

Measuring our Pay Gap at Redfin

When I first became CTO in 2015, we hadn’t yet measured our gender pay gap, in part because we weren’t sure whether we had enough engineers to get a meaningful result. But our Women in Tech group suggested we do an analysis for any role where we had at least two men and two women at the same level. The numbers might be small, but it would give us a way to manually inspect any pay gap differences that the algorithm flagged.

In the end, we didn’t see any statistically significant difference in how men and women are paid. But we now look at our gender pay gap when we do compensation adjustments to ensure that no issues creep in as we grow. We also decided to publish our pay gap and other diversity statistics publicly, as a way to both hold ourselves accountable and to encourage other companies to join us in publishing their data.

Increased transparency is one way we can work together to close the pay gap in our industry. But our analysis shows that getting more women into executive positions could help, too.

Methodology

PayScale analyzed 6,562 salary profiles of employees surveyed between June 2015 and June 2017 who listed their employer as being one of the 31 predetermined major tech companies chosen by Redfin. High female leadership refers to major tech companies whose leadership teams are at least 25% female, and low female leadership refers to major tech companies whose leadership teams are less than 20% female. The controlled gender pay gap controls for variables such as years of experience, whereas the uncontrolled gender pay gap is measured by looking only at median pay.

Bridget Frey is the Chief Technology Officer at Redfin. Prior to joining Redfin, Frey was the director of analytics and business applications at Lithium Technologies. Before that, Frey was the vice president of development at IntrinsiQ Research, a chemotherapy software company. In addition, she has held management positions at two start-ups: IMlogic and Plumtree Software. Bridget holds a bachelor's degree in computer science from Harvard University, where she graduated magna cum laude.