The Gender Pay Gap in Tech

This article has been reposted from Philip's personal blog with permission.

On average, female developers in South Africa earn 17% less than male developers. Are companies deliberately discriminating against women or is something else going on?

OfferZen recently published State of the Software Developer Nation 2022 and for the first time, we included the gender pay gap. As expected, this sparked a lot of online debate and discussion.

My goal with this post is to:

1. Share a simple framework for thinking about the gender pay gap
2. Present an in-depth view of the data to get to bottom of the pay gap in SA tech

Let’s do it…

Do women really earn 82 cents for every $1 that men earn?

It’s common to see people reference stats like women earn xx cents for every dollar that men earn. The media loves reporting on clickbait findings like this, but they often end up confusing different contributing factors, which makes it hard to tackle the problem systematically.

There are a few different gender pay gaps:

Gap 1 seems to be the most common way that people think about the gender pay gap. A man and a woman doing the same work at the same company, but the woman is being paid less. In many countries, it's illegal to pay men and women different salaries for the same work.

Gap 2 is about the relative compensation of all men and all women in an organization. This could for instance play out in men receiving promotions at a higher rate or men being hired into senior positions at a disproportionate rate.

Note: It's very hard to study Gap 1 and Gap 2 because it requires you to have internal compensation data for a specific company. You'll usually only become aware of those gaps when there's a gender discrimination lawsuit like the Google Gender Case.

Gap 3 compares the compensation of a specific role across the entire job market. For instance, in this post we'll be using the State of the Dev Nation report to explore Gap 3 between male and female software developers in South Africa.

Finally, there's Gap 4. Usually when you encounter stats like 'Women earn 82 cents for every $1 a man earns', you're dealing with Gap 4. They’re comparing the salaries of ALL the women and ALL the men in America regardless of qualification, profession, seniority or hours worked.

Keep in mind that these gaps can come about in deliberate and non-deliberate ways. For instance, Gap 1 may sound like cut and dry deliberate discrimination at first glance. However, that gap could come about merely because women were less likely to negotiate a salary offer or if the company used previous salaries to determine their offer amounts. Of course, even in non-deliberate instances, this is still considered a real problem by many people.

Next, we dive into the gender pay gap in SA tech!

The gender pay gap in tech increases with experience

As the level of experience increases, the gender pay gap for South African developers widens both in absolute terms as well as a percentage.

It can be quite shocking looking at this data for the first time. The differences are significant, especially at the more senior levels. You might conclude that this is proof of discrimination or that tech is a particularly sexist industry, but it's not quite that simple.

In terms of tech being particularly sexist: Gap 4 (across all roles and companies) is between 23-35% in South Africa, so the 17% gender pay gap in tech is actually substantially lower than the national average.

The fact that the gender pay gap in tech increases with experience is expected. It's a phenomenon we see across all industries around the world:

One of the big reasons for the increasing gap with age is motherhood. Women tend to take more time off after the birth of a child and are typically the primary caretaker of their children. Once they become mothers:

• Women are more likely to prioritize jobs with flexibility and work-life balance over higher compensation.
• Women may not be able to put in the long hours required to get a big promotion or perhaps might not even want the additional workload.

The impact of this is evident when looking at the differences between married and unmarried women:

Here’s where we encounter the first battle of perspectives:

• For many people, the above explanation is perfectly reasonable and puts their minds at ease. After all, if women are choosing to have children and look after them - what’s the problem?

• For others, this is proof that society is forcing gender roles onto women and in the process holding them back. We should be moving to a world where raising children is a shared responsibility.

It pays to start coding earlier in life

Motherhood might explain why the gap increases as women get older, but what about junior developers? Surely a very small portion of female junior devs would have children, so why is there a 15% gap…

This left me puzzled for a few days because almost every company we speak to wants to build more diverse tech teams. If anything, I might have thought that female junior developers would be paid more than men…but that’s not the case.

I eventually found some insights when looking at State of Developer Nation 2019:

The earlier developers start coding, the more they earn. This makes sense - if you start coding when you’re 12 you’ll have a head start of hundreds or thousands of hours over someone who only starts at university. That head start translates to higher earning potential.

So do men and women learn coding at similar ages?

It turns out that male developers tend to start coding significantly earlier than female developers. By the time they were 18, over 50% of the men had started coding while only 33% of the women had.

This is an interesting outcome and I believe it explains a portion of the gap. But I’m not entirely satisfied that it explains the full 15% gap for junior developers. It also leads us to another question: Why do girls start coding so much later than boys?

Here we encounter the second battle of perspectives:

• Some people believe that women are just generally less interested in coding. Despite all the efforts to drive gender diversity in tech, most women won't see coding as an attractive career option. It’s not an opinion you’ll often find on Twitter or LinkedIn because it could get you canceled.

• Others believe that gender stereotypes lead to fewer girls coding. Girls have fewer adults encouraging them to take up coding and many of them believe that coding is for boys.

My hope is that startups like Mindjoy can help kids to reimagine what coding actually is and inspire more girls (and boys!) to start coding.

Interviewing while pregnant

It’s illegal to not hire a woman based on her pregnancy, but it still happens every day. The reasons are obvious: maternity leave is expensive for companies and the new joiner will be on leave for three or four months. This is especially tough for early-stage startups where finances are tight and it’s all hands on deck.

One of our team members recently posted on LinkedIn about her experience interviewing with OfferZen while she was four months pregnant:

I’m glad we were able to hire Estine because she's awesome! Even more, while she was on maternity leave we increased our maternity benefits to 4 months paid. We're serious about making OfferZen a great place to work, and believe this is one way to attract top female candidates who also want to start families. If this sounds good to you, come work with us!

Soon after Estine posted on LinkedIn, a founder of an early-stage startup reached out to me about her post and admitted that they weren’t in a financial position to make a hire like that.

Here we encounter another battle of perspectives:

• Some people believe that small companies and early-stage startups should not have to carry the burden of maternity leave. These companies are "forced" to break the law by not hiring women that might fall pregnant in order to survive.

• Others believe that it's the responsibility of every company to look after women. Men and women should be hired based on their abilities and it's none of the business of an employer whether they plan on having a baby.

Some parting thoughts

Most of us can agree that some form of gender discrimination exists. Where it gets complex is when we try to quantify the impact of deliberate and non-deliberate discrimination, along with all the other factors that create the gender pay gap.

I will count this blog post a success if I've convinced you that discrimination is not a catch-all explanation for all pay differences and that it's worth digging a bit deeper.

Overall, I am optimistic about the direction the world is headed. In most countries, the gender pay gap has decreased over the last few decades.

There is a meme within the tech industry that it's somehow more discriminatory towards women than other industries. I haven't found anything to back that up. I think that software engineering is an excellent career path for women.

As one example of that, 92% of South African developers now work in some kind of remote setup. This is a massive win for women because remote work solves a lot of problems that mothers would otherwise have. When you're remote, taking a 20min break to breastfeed is less of a big deal.

Lastly, here are some things to consider if you're trying to build a diverse engineering team:

• Complete a salary audit - As explained in the post, it's quite possible for your company to have a gender pay gap even if it's not deliberate. If women at your company are underpaid you’ll struggle to hold onto them.
• Stop relying on previous salary - using previous salary to determine new salary perpetuates biases. Asking for payslips has been outlawed in parts of the US, but it's still common practice in South Africa.
• Don’t hire “woman engineers” - nobody wants to be the diversity hire.

I realize my post is only one perspective of the gender pay gap in tech, so I'd love to get your views. Have I missed major insights? How can I improve my gender pay gap framework? Has becoming a mom affected your career? Talk to me @philipjoubert on Twitter!

Thanks to Gabi Immelman, Annelie Maré, Azaria Beukes, Anthea Hartzenberg, Brett Jones and Anne Gonschorek for reading drafts of this post.