Wednesday 11 December 2019 5:15 pm

Closing the wage gap: Why people of colour get paid less in the tech industry

Mehul Patel is chief executive of Hired.

The technology industry brands itself as forward-thinking, but salary data tells another story.

The gender wage gap — in tech and throughout the job market — has permeated discussions for many years now, and rightfully so, but pay discrimination is affecting other marginal groups without making headlines as often. 

In fact, racial pay disparity is arguably one of the biggest problems in tech today. Data from our recent State of Salaries Report revealed that the wage gap between black tech workers and their white colleagues is worryingly large and growing, widening by $5,000 (£4,000) since last year. 

Additionally, data revealed that black tech workers were found to be paid the least out of all ethnicities, earning $13,000 (£10,400) less than Asian tech talent who are paid the most on average. What’s worse is that this trend has intensified over the last year with salaries for black tech workers falling by $6,000 (£4,900) since 2017.

These data insights show that more needs to be done to ensure that people of colour working in technology are being paid equitably with salaries that reflect their true market value. 

In the tech recruitment sector, we repeatedly see that one of the main factors fuelling these discrepancies in wage is the lesser known concept of the “expectation gap”. This phenomenon, whereby minorities receive less because they ask for less than their more white or asian colleagues has been identified across race, gender, and in the LGBTQ+ community.

This is a big issue to tackle and requires deep cultural change, which is no doubt already happening, albeit slowly. However, businesses and recruiters have the power to spark progress in the right direction by implementing adjustments in their hiring and HR processes.  

First, you can empower both candidates and employees with the data insights they need to ask for their worth and understand market benchmarks across each of their roles.

Critical to this is that industry bodies release accessible and up-to-date reports that give firms a standardised salary for roles to work with. This will ensure that wage transparency becomes the norm.

The English stigma around talking about salaries must end. 

Finally, it’s critical to have clarity around timelines for raises and promotions, so that everyone understands pay and progression processes to avoid biases. 

Fostering a culture of wage transparency can still be seen as radical, but this proactive stance on inclusion and equity is a necessary step forward.

From a business perspective, it is within an organisation’s interest to support and retain tech talent from diverse backgrounds. According to McKinsey, diverse teams on the whole are proven to be more creative, innovative, and ultimately generate more profit.

We are already seeing innovative organisations embracing the wage transparency ethos. As an example, a fantastic trend has recently emerged in California and other areas of the US where businesses and hiring managers aren’t allowed to ask candidates their previous salary during the interview process.

But this should go one step further. Candidates should not even be asked for their wage expectations. Recruiters and hiring teams should simply offer a fair paying salary, supported by recent and credible market data, and this should be the same for any candidate in the running. 

By fostering a transparent, data-fuelled culture, salary discrepancies cannot go unnoticed, and this will help to reduce bias within the recruitment process.

City A.M.'s opinion pages are a place for thought-provoking views and debate. These views are not necessarily shared by City A.M.