Gender pay gap nearly twice as large in tech

Data & research, Manchester

Henri Egle SorotosHenri Egle Sorotos, December 19, 2017

This article was originally posted on the Tech North website.

And the bonus pay gap is even worse.

As a quick follow-up to my analysis of gender diversity in tech last week, I decided to take a look at the gender pay gap in our industry and how it compares to others.

There has been a lot of discussion about the headline figures, which show that 81% of Northern IT and tech workers in technical roles are male.

In the Manchester Startups Facebook group, there is an ongoing debate about what can be done to alleviate the gender imbalance. I have also had a number of emails asking about the analysis. This is all great – keep the commentary coming.

Looking only at gender diversity statistics by count can be a little two dimensional; it’s important we look at the nuances behind those figures.

Where does this data come from?

From April 2017 it has been obligatory for organisations with more than 250 employees to report pay and bonus figures by gender. The figures from the current financial year are due for release mid-2018. In the 16-17 financial year some companies reported their figures voluntarily, and I have been looking into them to try and tease out some nuance.

Lucky for me – the data comes with SIC codes; the taxonomy classifying different industries. The Gender Pay Gap Service have published the dataset which allows me to compare tech and non-tech firms using the Tech Nation definition of a ‘tech firm’.

The industry comparison

Based on the sample, men are paid on average 17% more than women in the tech industry. By contrast, those firms outside the tech industry pay men just 9% more than women in the sample.

The bonus market paints an even bleaker picture – tech firms pay men on average 16% higher bonuses, whilst in companies in other sectors this deficit if only 6%.

Figure 1 is a scatter plot highlighting the pay and bonus gap in the sample from last year. The majority of companies are in the upper-right quadrant where companies are paying higher salaries and bonuses to men compared to women. I have controlled for a number of outliers, but it gives you an idea of where the majority of companies sit.

Tech is not alone, but certainly one of the worst culprits. Last night the news broke that the Department for Transport has the largest gender pay gap across government. Basic pay by gender in the department by is 17% higher for men, much like the tech sector in this sample.

Government and the North

Sage UK is a leader for equality in this data. The Northern tech firm has a 0% pay difference between men and women. Plus, in contrast to the majority of the sample, Sage actually pay 17% higher bonuses to women employees. A full listing of government department pay gaps were published yesterday:

  • Department for Transport: 16.9%
  • Department for Exiting The EU: 15.26%
  • Department of Health: 14.2%
  • Ministry of Defence: 12.5% (for civil servants)
  • Department for Business, Energy and Industrial Strategy: 12%
  • Department for the Environment, Food and Rural Affairs: 11.5%
  • Foreign and Commonwealth Office: 10.6%
  • Home Office: 10.1%
  • Department for Culture, Media, Digital and Sport: 3%

Tech City UK and Tech North also have much work to do. Our own gender pay gap means the median average salary for women is 20% less than for men within the organisation.

Some caveats

This data is based on a self-reported snowball sample from the financial year 2016-17. It is likely that the sample is not totally representative of UK industry. As providing data was a voluntary exercise it is likely that the figures are skewed to underinflate the true extent of the gender pay gap. For each company the figure reported is the difference between the median average salary and bonus for each gender. Where I have aggregated by sector, a mean average has been taken.

In the past there have been many estimates of the gender pay gap. Earlier this year a civil service blog quoted and estimate of the private sector pay gap at 23.7%. In reality, we won’t have a complete picture until the figures for the 2017-18 period are published later in the New Year.

An action plan for closing the gender pay gap in your organisation can be found here. The government’s gender pay gap reporting campaign can be found here.