The gender pay gap persists in European tech, but there are signs that things are getting better. EU legislation around salary transparency is pushing startups to implement changes — such as unconscious bias training for staff and policies like flexible working and family leave — but there is still work to do.
This week, we spoke to the team at compensation benchmarking platform Ravio, who gave some advice on improving the gender pay gap at your startup.
Design a compensation framework
This is important because it means you can make fair compensation decisions. Start by figuring out what you want to achieve. For example:
- What kind of talent do you need in your business?
- Do you have to compete for expensive roles, such as AI engineers?
- Do you need people who come from a Big Tech background with a tonne of experience — or can you hire junior people without big names on their CVs?
This helps you understand where to benchmark your pay: either against the Facebooks of this world, or against startups that are similar to yours. Then, create a framework. This involves creating a compensation philosophy; job framework; seniority level framework; location framework; and salary bands which dictate pay ranges based on a person’s role, seniority level and location. We lay out how to do that here.
Communicate your framework
Once you’ve got your framework figured out, chat with your hiring managers about it and ensure they understand the framework and why it has been created this way — to encourage them to stick to it. For example, if you are using salary bands to benchmark pay instead of asking candidates for their salary expectations, or what they were paid in their previous job, explain why, so they understand the rationale. If you’re in the leadership team, you must reinforce the framework every few months, explaining why it works and why it is good for the business to ensure everyone adheres to it. People matters in general should not be treated as an admin task for the HR team, but as part of business strategy — you need to make that clear.
Improve hiring processes to improve representation
One of the big things driving the gender pay gap is a lack of female representation in startups, especially at senior level. If you’re struggling to attract and retain female talent, monitor and analyse your hiring process regularly to identify why. If it’s in the early stages of recruitment, use specialised job boards to improve outreach. Also, make sure your job descriptions include inclusive language. For instance, recruitment software startup Applied has a job description analysis tool to help you check that the language of your job descriptions isn’t skewed to a specific gender.
If female candidates are dropping off at later stages, investigate why. Is gender bias happening internally across the interview panel? Are the interview techniques not designed to support equity in hiring practices? Finally, if women are rejecting job offers, ask candidates to give feedback so you can understand why they don't want to work for your organisation.
Standardise job offers
A surefire way to achieve pay equity would be to remove negotiation from the hiring process. But the jury is still out on whether that's a good business practice because you're trading off the certainty of pay equity against the ability to break from your salary structure to hire outliers. The less straightforward way is to know what salary range you will offer for each job ad — which filters out candidates who have much higher expectations. Then when it comes to the interview, ensure the managers who’ll decide to accept or reject the candidate have gone through unconscious bias training. Then, consult your compensation framework to ensure the salary you’re giving is fair based on the person’s role, location and seniority level.
Get CEO-buy in
It’s hard to roll out a compensation framework and get people to stick to it if you don’t have leadership buy-in. For HR teams wanting to appeal to the CEO, craft a compelling business case for pay equity emphasising the commercial benefits of diverse teams and equitable pay, the reduced attrition risk as well as the legal risks of non-compliance. Highlight the benefits to your employer brand that come with improving pay equity. These improvements make hiring and retaining talent a lot easier. Pay equity will also eliminate perceived injustice with wages, reducing any internal drama on the subject of pay in the organisation.
On the subject of... pay equality
1. How to conduct a pay equity analysis.
2. Nail the hiring process as an early-stage startup — including some advice on making job descriptions gender neutral.
3. Salary transparency in job ads. Is it always a good idea?
4. What’s driving the gender pay gap in startups? A lack of women in senior roles is one reason.
5. Upcoming EU legislation on pay transparency. Here are some tips for how to prepare.
