5 things to know about ... pay equity

September 04, 2017

by Joe Duggan, Principal

In honor of Pay Equity Day, April 4, I thought it would be interesting to dive into the Mercer | Comptryx database, which has incredibly detailed global data on gender and compensation for the High Tech industry (with Life Science and Financial Services soon to come). Here are five interesting findings for some new perspective on the Pay Equity issue.

1. On a global basis including all jobs and all levels, the “fixed base” (base salary plus fixed allowances where applicable) of females is 70% of males. In the US, female salaries are significantly higher on an absolute basis, but still represent only 82% of male pay. There is no question that the lack of women in senior Leadership roles (only 19% of total US executives) is a significant contributing factor to the overall pay difference.

2. Across all Professional roles in the US, women represent less than a third of the total headcount, and their fixed base pay is 86% of the comparable figure for males. When we begin to dig into specific job families, the same pay figure for women in Software Engineering positions is 91%. At the P-3 “senior” level of the Software Engineering family, there is only a 3% difference. This suggests to me that, where demand is high and talent is scarce, gender bias seems to diminish.

3. To test that hypothesis, let’s look at where supply and demand is less out of kilter. With Human Resources jobs in the US, where females represent over 70% of the headcount, their fixed base pay is only 88% of males; 90% in Executive and Manager positions. In the Legal function (where females represent only 56% of total headcount), the comparable numbers are 79% for all Professionals and 89% when Executive and Managers are isolated.

4. In US Professional jobs, female pay is closest to male pay at the entry level and systematically (albeit slightly) drops at each succeeding higher level. This used to be explained by the fact that some women take a career break to start families. But can that be the true cause, or is this gender bias at its most obvious?

5. Interestingly, voluntary turnover among US females at all levels is 9.1% versus 8.1% for male employees, and more females have been hired than males over the past year or so. Is that a positive sign or just a cause and effect? Women get promoted at the same rate as men and receive slightly higher promotional raises. Also, it’s reassuring to see that Top Performer ratings are about equally distributed between the two genders.

This data gives me both optimism and concern ... but, as with all good data, it opens the door to more questions and the need for more research. In any case, this is a topic that deserves more attention and analysis. And, perhaps, there is no better day than Pay Equity Day to keep tabs on these trends!

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