Key Findings
While the gender wage gap still exists, progress is being made.
Men earned 22% more than women in 2020, compared to 30% more in 2018.
There is a gap in equity ownership, the biggest driver of wealth in tech.
On average, men have 63% more ownership in a company than women.
Women make up 40% of owners yet only own 21% of the shares.
Seniority is not driving the wage gap as much as we thought.
Men who are individual contributors still earn 22% more than women.
The gap between Black and White employees is double the gap between men and women.
White employees earn 44% more than their Black counterparts.
The pay gap for BIPOC (Black, Indigenous and People of Color) is increasing.
White employees earn 24% more than their BIPOC colleagues. This is up 6 percentage points in 2020.
Engineering teams have made big improvements.
The average man in engineering earns 7% more than the average woman.
Introduction
We believe data drives action.
We also believe that to build a better, more equitable future, all of us need to know where we stand.
Given the ongoing conversations about gender and racial inequities in our industry, this is more important than ever.
In our first annual Charting Better Workplaces report, our goal is to shine a light on the tech industry’s wage gap. Information inspires action, and wage inequality is a solvable problem.
Companies use ChartHop to manage their orgs and people data, giving ChartHop unprecedented access to real‑time salary, equity, demographic and organizational structure data. For this report, we aggregated and anonymized the data of more than 16,000 employees from private and public tech companies.
Unlike Charting Better Workplaces, most existing reports are built off of self‑reported and/or assumed data, focus on one part of compensation, or don't speak to organizational data at all. We're excited to share this report as a new perspective on wage gap data.
Let's use this data to chart a course toward better, more equitable workplaces.
A Note on Non‑binary Data
Reporting in a gender‑binary framework does not give us the whole picture and contributes to sustained inequality.
Unfortunately, many Human Resource Information Systems (HRIS) do not have an option for Non‑binary designations. We are actively working with partners and customers to address this issue.
For now, we can say that the number of Non‑binary employees has increased, and the salaries of Non‑binary persons are closer to women than men.
Our goal is to have better defined Non‑binary data included in future reports.
Download the full report
and get more insights as they become available.
Women’s Wages Remain an Issue
It is no secret that there's a gender wage gap.
When it comes to salary-based compensation, we found that the gap is decreasing. In 2020, men earn 22% more than women, compared to 30% in 2018.
Furthermore, women’s representation in the tech industry has remained constant since 2018 at 44%, while:
- In 2018, women only took home 27% of the compensation,
- In 2019, that number grew to 31%,
- In 2020, it's now at 33%.
Although women are still taking home compensation that is disproportionate to their representation in the industry, it’s encouraging to see these numbers increase.
WOMEN’S SHARE OF COMPENSATION VS. WORKFORCE OVER TIME
While we have a long way to go to close the wage gap, progress is being made.
Inequalities between men and women in tech are also seen in the distribution of equity, one of the biggest drivers of wealth in this industry:
- Men have 63% more ownership in a company than women.
- Women make up 40% of owners yet only own 21% of the shares.
Equity distribution changes significantly as companies mature, and lack of diversity in early teams contributes widely to these gaps.
MEN’S VS. WOMEN’S
SALARIES YOY
EQUITY DISTRIBUTION BETWEEN MEN AND WOMEN
The Role of Seniority
A commonly cited explanation for the existing gender wage gap is that women are less represented in higher paying leadership positions. While we found this to be true -- according to our data, 61% of managers and 71% of executives are men -- it doesn’t tell the full story.
MEN’S VS. WOMEN’S REPRESENTATION IN MANAGERIAL/ EXECUTIVE POSITIONS
We tested this theory with our organizational structure data and found that the wage gap is identical among individual contributors, 22%.
We also found that, while the lack of equal representation in leadership roles is alarming, progress is made when looking at managers and up. Managers who are men make 16% more than women.
INDIVIDUAL CONTRIBUTOR & MANAGER SALARIES BY GENDER
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and get more insights as they become available.
Wages Across Race Lag in Progress
SALARIES BY RACE
Our data also reveals stark inequalities in compensation and representation across race.
In fact, the wage gap between Black and White employees is double the wage gap between men and women.
The average salary for a White employee in 2020 is $130,418. This is:
- 44% more than Black employees,
- 33% more than Hispanic employees,
- 2% more than Asian employees.
Although numbers remain low, representation of Black and Hispanic employees has increased.
In 2018, Black employees made up 4% of this sample’s workforce and Hispanic employees made up 5%. Those numbers have both increased to 8% in 2020.
Yet, both Black and Hispanic employees only take home 6% of the compensation. Conversely, white employees make up 61% of this workforce and take home 65% of the compensation.
SHARE OF WORKFORCE VS. COMPENSATION BY RACE
Interestingly, the wage gap has gotten bigger when you look at race as a whole.
In 2020, White employees earn 24% more than their BIPOC (Black, Indigenous and People of Color) counterparts. This is up 6 percentage points since 2019.
It's alarming that during a time of an ongoing racial justice movement, the BIPOC wage gap is the only percentage from our report that is getting worse.
As an industry, we need to put significant time and effort into addressing this increase to continue making progress towards a more equitable workforce.
Wage Gaps by Department:
Engineering Shows Progress While Sales Teams Have Work to Do
The engineering gender wage gap in 2020 is 7%, which is significantly smaller than the overall average of 22%.
Engineering teams, typically dominated by men, have received a bad rap over the years for their lack of focus on diversity and inclusion, but that negative attention seems to have spurred action. There's been a substantial decrease in engineering departments’ gender wage gap over the last three years.
We see this progress in engineering departments as an encouraging sign that awareness and dialogue can spur real, positive change.
BASE SALARIES IN SALES VS. ENGINEERING ROLES
On the other hand, sales teams still have a lot of work to do in closing pay gaps along gender lines.
We found that, when excluding employees in management positions, men in sales earn 22% more in base salary at $91,110. While seniority and experience contribute to this gap, even entry-level roles see a gap of 9%.
The current gap is also reflected in the share of compensation:
- Women make up 33% of the sales team,
- Women only take home 29% of the sales team’s base compensation.
These figures are even more surprising when considering that women make up a larger percentage of sales teams (33%) compared to engineering teams (21%), although still less than the average across departments of 44%.
Conclusion
This data paints a picture of the issues we must address to reach the levels of fairness and equity we need. The tech industry’s diversity and wage problems aren’t going to change overnight. We must act now.
Change requires action across the board -- from founders and investors to HR leaders and employees. This is our opportunity to leverage people data for good; to understand where inequalities remain so we can chart a course forward.
Progress on the road ahead will be defined by action, and the best action is informed by tangible data and trackable results.
Here are some immediate steps every organization should take to address wage gaps in the workplace:
Track employee data across multiple dimensions such as race, gender, department and title.
Organizations can no longer afford to remain in the dark or outsource the monitoring of this vital information. Armed with the right data, organizations can evaluate compensation on a regular basis and make changes before problems compound.
Build guardrails around compensation and promotion reviews -- and understand the impact of proposed changes before they go into effect.
Decrease the bias that arises when proposals are left solely up to manager discretion. Provide data‑driven guidelines to ensure bias is taken out of the process. Empower managers with data to understand how their proposed changes impact pay parity across the workplace, before they’re submitted for approval.
Make Diversity, Equity, and Inclusion (DEI) progress, figures, and initiatives available to employees and to the public.
This ensures accountability towards achieving DEI goals. Build this habit early in your company's life and use it as a driver to build a diverse team from the beginning.
Build clear pathways to management for BIPOC, women, and gender Non‑binary people.
This will require changing recruiting policies and building objective level structures so employees can be fairly promoted. Advancement structures must also be carefully constructed to remove bias so that all promotions are handled in the fairest manner possible.
Use market rate data to inform total compensation decisions.
Rely on data to remove room for potential bias. Focus less on a candidate's current compensation and more on what the market rate is for the role they're being hired for. Think beyond the salary - equity compensation matters.
Let’s do this, together.
We are confident that by taking a data‑driven approach, we can work together to build the workforce of tomorrow -- one defined and empowered by a diversity of background and opinions, and invigorated by a level of fairness and equity that encourages each one of us to do our best.
Methodology
The Charting Better Wages report is based on proprietary data, anonymized from a subset of ChartHop’s customers. The base pay, total compensation, distribution of equity, genders, ethnicities, titles and departments included in the report reflect data from more than 16,000 employees within the tech industry. To determine the average wage gap, we calculated how much more the higher earner makes than the lower earner. We used anecdotal evidence in instances where data sets were not significant enough to measure, such as with Non‑binary data.
Download the full report
and get more insights as they become available.
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