It’s no secret women continue to face considerable career obstacles in the technology sector and the broader labor market. Numerous studies show that not only are women paid less than their male counterparts, they also have fewer opportunities to reach management and executive positions. This is why, despite making remarkable progress, female CEOs run just 10.4% of Fortune 500 companies. In tech sectors spanning IT services, software, and hardware, women account for 30% or less of C-suite leaders.
Recent workforce trends, however, may shrink the gender gap more quickly and empower women to reach their true potential in the tech sector. In particular, the acceptance of flexible work schedules and greater pay transparency may lead to significant progress for equity in the workplace.
Job Flexibility Accelerates Parity
Researchers have found that flexible working hours and remote work will likely reduce the gender pay gap. Harvard Professor Claudia Goldin, who recently won the Nobel Prize for Economics after documenting working women’s progress over many decades, reported in a 2014 paper that men were paid disproportionately more due to working more fixed and continuous hours. She asserted in her work at that time: “A flexible schedule often comes at a high price, particularly in the corporate, financial and legal worlds.” More recently, Goldin published “Career and Family: Women’s Century-Long Journey Toward Equity” in 2021, introducing the term “greedy work.” This concept reaffirmed that men received disproportionately higher pay for long hours at work.
Data from Gallup shows that as of May 2023, more than half (52%) of remote-capable workers are now engaged in a hybrid schedule, and the percentage of people in fully remote arrangements has increased to 29% after declining to a low of 26% last November. Overall, 81% of those who can are performing their jobs at home some or all of the time.
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Our experience working with a number of tech skills clusters indicates that remote and hybrid work offering flexible hours have become widely accepted in our industry. As noted in Lorien’s 2023 Technology and Digital Salary Survey, such arrangements are the norm for those working in cloud and DevOps, software engineering and even QA testing.
As more companies accept flexible schedules, the penalty for remote and hybrid work is likely to shrink. Women, who continue to perform the lion’s share of unpaid work at home, will benefit from this working model provided they remain highly engaged and connected with colleagues. Wharton Professor Martine Haas contends in Harvard Business Review that flexible hybrid schedules are critical to maintaining engagement.
Transparency Levels the Playing Field
Another trend sure to help women close the gap is increasing pay transparency. Not only are more companies providing salary ranges in job postings, but many now release annual reporting on pay gaps and DE&I practices within their organization. Among organizations not required by law to list salary ranges, 67% voluntarily list pay information in their job postings sometimes, often or always, according to a survey conducted by SHRM. California and Illinois currently require pay transparency reporting, and Massachusetts is on the verge of becoming the third state to do so.
The National Women’s Law Center reported that pay transparency levels the negotiating playing field. Disclosing pay ranges also allows companies to proactively review and evaluate their compensation practices and address any unjustified disparities between employees. Several states have outlawed employers from requiring job applicants to disclose their salary history, which minimizes a practice known to contribute to ongoing gender pay gaps. So far, 22 states and 22 municipalities have enacted such measures.
Furthermore, pay disclosure can elevate an employer’s reputation. A recent survey found that a company’s salary transparency is a key indicator of its commitment to pay equity, with 63% saying a lack of transparency shows a company is not committed to pay equity and 75% agreeing that not showing the salary for a position makes them think it will be less competitive or lower than average.
Publicly available data on compensation, such as Lorien’s salary survey, offers insights into role-specific benchmarks, which can help companies identify and rectify gender pay gaps. Such sources can also inform candidates when negotiating with prospective employers.
In the next part of this series, I will discuss how higher female participation in the labor market also positively impacts equity in the workplace.