Tomorrow, the European Commission highlights the ongoing gender pay gap with ‘Equal Pay Day‘. The day symbolises the point at which women effectively stop earning compared to their male counterparts. The average gross hourly earnings of male employees in the EU is still higher than women’s. We will also take a look at tech start-ups specifically.
- Equal Pay Day draws attention to the gender pay gap.
- The gap is caused by several factors, including the different positions held by men and women, discrimination and the fact that many women undervalue themselves.
The persistent disparity in earnings
Equal Pay Day serves as a sobering reminder of the economic injustices women face across the European Union. While the gender pay gap has decreased in most EU countries over the past decade, the average gross hourly earnings of male employees in the EU was 12.7% higher than women’s in 2021, equating to around one and a half months’ salary per year. The complexities of the issue are manifold, with sectoral segregation accounting for approximately 24% of this disparity. Women are disproportionately present in lower-paying sectors, and the glass ceiling remains a stark reality with less than 8% of women helming top companies.
Moreover, the largest portion of the gender pay gap remains unexplained, suggesting that discriminatory practices continue to pervade the workplace. This pushes the need for more transparency in pay scales to the forefront, as it could reveal unjustified gender-based pay differences and support victims seeking redress.
A closer look at tech startups
The tech startup scene reflects these broader societal issues but with an even more pronounced pay gap. UK tech startups show an unadjusted pay gap of 26%, with women earning 74p for every £1 that men earn. This gap far exceeds the national average of 15.4% in the UK and is higher than the pay gaps in France and the Netherlands as well.
Even when adjustments are made for role, tenure, and performance, the gap in the UK sits at 2.2%, above the European average of 1.6%. The story doesn’t end with pay; it extends to representation, particularly in senior roles where the ratio is 6 male executives to every female executive. The underrepresentation of women in tech leadership roles is a stark indicator of the systemic issues at play.
The impact of undervaluation
Research commissioned by 50inTech reveals that a worrying number of women in tech startups are not aware of their market value. In Germany, 92% of women feel this way, followed by 62% in the UK and 51% in France. The undervaluation of women’s contributions and skills is not just a matter of fairness but also a business concern.
Negotiating salaries is another hurdle, with 36% of women feeling extremely stressed about it, and 7% even refraining from applying for positions that do not disclose the salary upfront. The call for salary transparency is loud and clear, with 83% of respondents backing the practice of listing salaries on job offers. Such transparency is viewed as a critical step towards emboldening women during salary negotiations.
Striving for equity
Despite the grim statistics, there’s a burgeoning awareness that addressing the gender pay gap is critical for building equitable and prosperous societies. The European Commission’s call for greater transparency in pay is a positive step in uncovering and addressing pay disparities. By making salaries public, companies can demonstrate their commitment to fairness and equality, thereby attracting a more diverse and talented workforce.
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