Pay equity in the tech industry

A guide to empowering HR leaders in the tech and fintech sectors to achieve pay equity excellence.

Pay Equity in the Tech Industry Hero

Introduction

Efforts to close the gender pay gap have stalled in the U.S. in the past two decades. Pew Research suggests that the current gender pay gap stands at 18% in the U.S., an improvement of only 2% since 2002. At the current rate of progress, women will not see pay equality in their working lifetime. Moody's Analytics data predicts a 132 year wait for equal pay. PWC's Women In Work Index 2023 is more optimistic, at half a century.

In the dynamic, disruptive yet traditionally male-dominated industries of technology and fintech, disparities in pay and lack of equal opportunities for women and marginalised communities are magnified. As well as calls for greater workplace equality, HR leaders in tech face significant challenges as the sector experiences accelerated growth and a rapid pace of change.

The U.S. Department of Labor reports there are nearly 10 million workers in STEM (Science, Technology, Engineering, Maths) occupations, a number expected to grow by almost 11% by 2031, twice as fast as the total for all occupations.

At the same time, HR tech leaders are facing major challenges in talent acquisition:

  • 91% of leaders are "concerned" or "extremely concerned" about time-to-hire goals.
  • Tech vacancies take, on average, 7 weeks to fill.
  • The average cost to fill a tech vacancy in a mid or large-sized organization is $30,000.

LinkedIn research also found a turnover rate of 13.2% across the sector, the highest of any industry.

Achieving pay equity can help to address issues in talent acquisition and retention, enhance DEI (Diversity, Equity and Inclusion) initiatives, and create an inclusive culture with equal opportunities for all employees. It also motivates employees to work harder and boosts employee engagement.

Research from Josh Bersin shows that companies that are effective in pay equity are:

1.6x
more likely to meet or
exceed financial targets

1.2x
more likely to attract the
talent their business needs

1.7x
more likely to
innovate effectively

In this comprehensive guide for HR leaders in tech and fintech, we explore the unique pay equity trends and challenges, and consider how to effectively navigate legal and regulatory complexities. We also offer strategies for HR leaders to implement effective pay equity policies, foster diversity and inclusion, and offer insights into navigating bias in compensation and hiring processes. Finally, we explore how innovative tools can support fair pay initiatives and provide actionable steps to help your organization start its journey to pay equity.

The Pay Equity Landscape In Tech

Analyzing Pay Equity Trends and Challenges in the Tech Sector

HR faces unique challenges in achieving pay equity in the tech industry, as the following studies demonstrate:

Women currently hold only 26.7% of tech-related jobs. The percentage of women in all tech-related careers has fallen since 2021.

Less than 20% of leadership positions in the tech sector are held by women.

Statistics suggest that women in cybersecurity typically earn less than three-quarters of their male counterparts. Women with one to three years of experience reportedly earn around $19,950 less than men with equivalent experience.

The pay gap in tech widens for Latina and Black women, who typically earn $52,000 per annum, compared to $85,000 for men, according to WomenTech.

Indeed reports that women were 65% more likely than men to be laid off in the tech sector post-pandemic.

Korn Ferry predicts the U.S. could lose out on $162 billion worth of revenues annually unless it finds more high-tech talent.

Cybersecurity faces a global shortage of 3.4 million workers, over 600,000 of those vacancies are in the U.S.. By 2025, a lack of talent or human failure is expected to be the cause of half of significant cybersecurity incidents.

Only 30% of the AI sector are female according to the World Economic Forum (WEF), which has far-reaching implications beyond the tech sector.

Only 30% of the AI sector are female according to the World Economic Forum (WEF), which has far-reaching implications beyond the tech sector. As AI continues to disrupt other industries, including hiring, health and education, the gender gap in AI can exacerbate gender disparities across the workforce.

The UK tech sector's gender pay gap stands at 16%, nearly 5% higher than the national average. 19 of the UK's 20 best-funded tech companies pay men more than women. The UK is the #1 tech sector in Europe. According to UKTN, UK tech startups as a whole pay women 26% less than men, however, the largest tech gender pay gap in Europe.

Accurate figures on gender equality in fintech are hindered by limited reporting in fintech. Ernst and Young in the UK reports that a lack of salary transparency and low female representation in senior roles means a higher-than-average pay gap. Progression is limited by a lack of recognition and an opaque promotion ladder. Outside of the U.S., the UK is the dominant fintech market.

Only 13% of Web3 founding teams include females. Web3 encompasses VR, blockchain and cryptocurrency sectors, which are aimed at creating more inclusive spaces. All Male-founded Web3 startups also raise nearly four times more capital than those founded by All women.

Adopting a policy of pay equity can help HR leaders to address all these issues and achieve workplace equality.

Globally, pay equity legislation is gaining momentum as a growing number of countries acknowledge its key role in closing the gender pay gap. A commitment to pay equity demonstrates a clear commitment to equal pay and inclusion, both critical factors affecting tech and fintech sectors.

Navigating Legal and Regulatory Complexities

In addition to the challenges in achieving pay equity, all employers must navigate legal and regulatory complexities related to pay equity. Pay equity was one of the biggest HR trends in 2023.

Pay Transparency Legislation in the U.S.

Pay transparency legislation is complex and constantly evolving.

Data from the National Women's Law Center suggests

over 1 in 4 U.S. employees are now covered by pay

transparency laws, which include salary history bans.

Salary history bans prohibit employers from using a job applicant's current or previous salary to set compensation.

A number of states have enacted pay transparency laws, including California, Colorado, Connecticut, Maryland, New York, Nevada, Rhode Island, and Washington.

Pay transparency legislation in Hawaii and Illinois comes into force on January 1, 2024, and January 1, 2025, respectively. Colorado has also amended its current pay transparency law to add additional employer requirements starting January 1, 2024.

Pay transparency laws are also being considered in other jurisdictions including Alaska, D.C., Georgia, Iowa, Kentucky, Maine, Massachusetts, Missouri, Montana, New Jersey, Oregon, South Dakota, Vermont, Virginia, and West Virginia.

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Employers should note that a national salary transparency bill, HR1599 was introduced in March 2023. If successful, it would require all employers to disclose pay ranges in job listings, provide wage ranges to job applicants, and provide that same information to current employees. The legislation applies to all organizations.

Both Illinois and Colorado have also introduced legislation to promote opportunity transparency, which we also discuss in the section on Managing Employee Expectations and Ensuring Fairness below.

Illinois: Bill HB3129 comes into effect on Jan. 1, 2025. In addition to pay transparency requirements, opportunity transparency is a key feature of the bill. Employers must ensure "all current employees" are aware of all promotional opportunities no later than 14 calendar days after making an external job posting.

Colorado: Colorado has expanded its Equal Pay Act. Effective Jan. 1, 2024, employers must make "reasonable efforts" to "announce, post, or otherwise make known" the identity of the candidate selected for each job opportunity within 30 calendar days of their start date. The following information must be provided to all employees with whom the candidate will work:

  • Successful candidate's name and job title.
  • Previous job title for internal candidates.
  • Information on how employees may show interest in similar job opportunities in the future

For HR tech and fintech leaders, this legislative requirement will enhance the opportunity for diversity by ensuring promotion opportunities have a wider reach.

As pay discrimination claims rise, the following demonstrates the complexities employers face when navigating pay equity laws:

  • In 21 states, plaintiff-employees must prove they were paid less for "equal work" when making a claim.
  • Six states assess equal pay claims based on "substantially similar" work.
  • At least eleven states use "comparable work" to evaluate equal pay claims.

Comparators also mean that two jobs may be considered comparable under one standard, but not under another. It is recommended that employers design pay equity audits around protected classes to ensure compliance. Additional factors to consider include similarly situated employees, and prior salary justification.

Employers should also note that the interpretation of pay discrimination laws may vary among the 12 Circuit Courts of Appeals.

Outside of the U.S., the most significant impact on pay equity is the EU's Pay Transparency Directive and Corporate Sustainability Reporting Directive (CSRD), affecting global tech employers.

EU Pay Transparency Directive

EU Pay Transparency Legislation is committed to closing the gender pay gap across all its member states. That applies also to all non-EU organizations with operations across the EU.

The legislation, which must be transposed into law by June 7, 2026, contains six key elements for employers to be aware of which apply to the hiring process, gender pay gap reporting and opportunity transparency:

  • Salary history ban: Employers cannot ask job applicants for information on their salary history and must provide salary information on all job listings prior to the interview.
  • All employees can ask for information on individual and average pay levels, categorized by gender, for workers doing the same work or work of equal value. Employers must provide access to the criteria used to define salary and pay raises.
  • Employers shall ensure that job vacancy notices and job titles are gender-neutral and that recruitment processes are led in a non-discriminatory manner, in order not to undermine the right to equal pay for equal work or work of equal value.
  • Where an unjustified gender pay gap of 5% or more exists, employers must carry out a Joint Pay Assessment with workers' representatives.
  • The burden of proof will shift to the employer to prove that there was no discrimination in equal pay claims.
  • Workers who suffer pay discrimination are entitled to compensation, including full recovery of back pay and related bonuses or payments in kind. There is no cap on compensation.

While member states may impose their own additional pay equity regulations, the EU Pay Transparency Directive is the minimum requirement for gender pay gap reporting and applies across all 27 member states.

For example, in Ireland, Google's pay gap between its male and female employees at its Irish operations stands at 5% in favor of men, which would trigger a Joint Pay Assessment under the terms of the EU Pay Transparency Directive.

EU Corporate Sustainability Reporting Directive

The EU's Corporate Sustainabiliy Reporting Directive defines pay equity reporting requirements as follows:

"Sustainability reporting standards that address gender equality and equal pay for work of equal value should specify, amongst other things, information to be reported about the gender pay gap, taking account of other relevant Union law."

The CSRD reporting requirements phase in between 2024 and 2026 depending on the size and type of the organization. EU public interest or listed organizations meeting one of the following criteria that also have at least 500 employees must comply with the Corporate Sustainability Directive beginning with the 2024 reporting year, 2024:

  • Local revenue of more than €40 million
  • Total assets of more than €20 million

For the 2025 reporting year, this expands to all EU organizations meeting any two of the following criteria:

  • More than 250 EU-based employees
  • Local revenue of more than €40 million
  • Total assets of more than €20 million

For the 2026 reporting year, this expands to all public interest or listed organizations meeting any two of the following criteria:

  • More than 50 EU-based employees
  • Local revenue of more than €8 million
  • Total assets of more than €4 million

Starting with the 2028 reporting year, reporting will also apply to non-EU organizations with a turnover above €150 million, and either an EU branch with revenue of over €40 million or listed EU subsidiary. The CSRD is expected to affect approximately 50,000 organizations, including an additional 10,000 non-EU companies, including 3,000 U.S. organizations.

Given the gender pay gap issues that affect the sector, tech and fintech organizations can act now to address issues affecting gender equality.

Adaptability and innovation will be key for HR leaders to thrive in these dynamic landscapes.

Harnessing data driven insights is the first step.

Harnessing Data-Driven Insights

Leveraging Data Analytics to Uncover Gender and Racial Pay Gaps

Data analytics uses company information to identify where pay disparities exist. When identified, HR leaders can review hiring and promotion practices to close those pay gaps. Leveraging data analytics provides HR leaders with actionable insights into workforce trends, enabling better strategic planning and talent management.

Without an analysis, employers may not be aware of the extent of their pay gaps. Most of the information HR needs to carry out pay equity audits is already available in existing human resource information systems (HRIS).

When preparing for an audit, individual employee information must be up-to-date and accurate. As a guide, it should include:

  • Basic employment status and historical employment information.

  • Demographic information on gender, race, and other categories.

  • Job title, job level, full-time or part-time status, basic salary, and bonuses.

  • Geographic work location.

  • Quantity or quality of work, and other performance measures.

  • Salary ranges and other relevant compensation data.

Carrying out an intersectional pay audit: In the context of DEI, intersectionality explores the way different groups experience discrimination. Intersectionality provides a framework that enhances understanding of the impact of discrimination on marginalized communities. Taking an average pay comparison overlooks variations in pay including men being paid more than women for the same roles, for example. To fully uncover gender and racial pay gaps, an intersectional pay equity audit is vital for HR tech leaders.

Why Intersectionality?

The U.S. Employment and Equal Opportunities Commission (EEOC) notes, "pay inequity is not solely an issue of sex discrimination, but an intersectional issue that cuts across race, color, national origin, and other protected classes."

Conducting a pay equity audit without accounting for multiple dimensions, such as gender, race/ethnicity, and age, can lead to an inaccurate result. It may reveal some pay disparities, but not the full extent.

Black women, for example, occupy two minority categories, they're both Black and female and are doubly impacted. Women, and especially women of color, experience greater pay discrimination in STEM jobs. Further studies show that Black and Latino STEM professionals, particularly women, face workplace discrimination and unequal pay, and are underrepresented in the labor market.

Sometimes there are justifiable reasons for paying one worker more than another in the same job, for example, educational level (if relevant to the job), or years of experience.

Without that level of detail in pay data, understanding the cause of wage disparities is a challenge.

Leveraging data analytics can help your organization to identify racial pay gaps and take action to address those issues.

Strategies for Addressing Compensation Disparities

By implementing policies such as conducting a pay equity analysis, communicating openly with employees about compensation, and creating clear policies and procedures for addressing pay discrepancies, employers can promote fairness, equity, and transparency in compensation. These strategies may include:

Develop a compensation strategy: Identifying your pay disparities is the first step in shaping your compensation strategy. A compensation philosophy clarifies what your company is trying to achieve through a policy of pay equity, such as workplace equality, or improved career progression. How you intend to achieve that should also be clear. Align your strategy with your business goals and values.

Review salary bands: Ernst & Young recommends that fintech organizations commit to consistent salary bands, and improve salary transparency by using tech-enabled solutions, while increasing visibility of female leadership.

Make your pay explainable: Analyze your salary range and compensation for each position. Ensure a competitive base salary for the work required, the skills of the individual worker, and their performance. Be prepared to explain the criteria for differentiating and defining performance when setting base salaries.

Select fair pay ranges: To comply with pay transparency laws, employers must choose fair and equitable pay ranges for all job listings. Establish how you determine the market rate for each position and how you will set salary bands and pay ranges.

Gain employee insights: In October 2022, a TechCrunch survey found that "67% of European women in tech feel underpaid compared to men." While your organization may believe it does not have an issue with pay equity, that must be reflected in your workforce.

Review progress regularly: If pay disparities by gender and/or race are identified, pay equity audits will allow you to monitor those pay differences over time. If compensation adjustments have been made, regular reviews help to avoid a recurrence of similar pay disparities. It also enables your organization to identify demographic changes in your workforce that can affect gender and race pay disparities. In the tech sector this can be a helpful tool to track on DEI initiatives, which can be adjusted as required.

Strategy Pay

Proven Strategies for Pay Equity

Crafting Effective Pay Equity Policies and Initiatives

Incorporating best practices on pay equity helps to create workplace equality. The steps below can offer a starting point:

Understand the pay data and pay equity legislation applying to the states and jurisdictions your company operates within. With a high proportion of remote workers, tech leaders need to be aware of pay equity legislation. As an example, Illinois pay transparency laws apply to remote workers who report to a worksite or supervisor in the state.

Evaluate your current situation with a pay equity audit: As we highlighted in the previous section, a pay equity audit is the only way to identify wage disparities within your organization.

Evaluate pay analysis groups: Create groups of employees performing similar work to make pay comparisons. This step involves identifying statistically significant pay differences within your employee groupings. Carrying out a regression analysis on each pay group, helps employers to determine whether apparent gender and race pay gaps exist for reasons beyond legitimate business factors, such as differences of skill, effort, and responsibility. It can also help HR leaders to identify issues such as cultural bias and opaque promotion ladders highlighted by women in fintech.

Quantify risk: After accounting for business factors, the next step is to identify remaining pay disparities across gender and race/ethnicity. These pay differences are potential pay discrimination liabilities. The pay equity audit will allow you to view these potential liabilities from multiple perspectives. For example, in terms of their statistical significance, their implications for overall annual compensation at the workforce level, the individual employee level, and at a variety of steps in between.

Validate your findings: There are at least five dimensions through which a pay equity audit will assess the accuracy of any pay disparities found. A key tool here is to make cohort comparisons. This compares smaller employee groups, while focusing on one or two legitimate business factors that those employees have in common. For example, a cohort comparison could measure an average gender pay difference among employees in the same job level and department. By performing multiple comparisons, employers can understand and analyze how well supported the regression-based pay disparity findings are.

Identify the root causes of pay inequity: What commonalities exist among those most affected by the pay disparity? How do disparities vary across time, location, and organizational level? The answers to these questions will assist your organization in identifying causes of pay disparities, not just symptoms. Multiple issues can influence your organization's pay equity. For instance, certain groups of employees may not have equal access to jobs or promotions and cannot progress to higher roles. This is a specific issue for HR leaders in the tech and fintech sectors. Pay equity software can help employers identify factors such as unconscious bias, or processes that may be affecting, or causing, pay disparities.

Development remediation strategies: Your pay equity audit should allow you to explore different strategies for addressing these risks that balance both cost and effectiveness.

Set aside an appropriate budget: Research from Josh Bersin found that only 14% of organizations set aside an appropriate budget and staff to mitigate pay inequities. Equally, only 14% use data and equity platforms to identify pay disparities. As global pay equity laws become more complex, investment in a robust pay transparency policy will be key to both compliance overcoming challenges in recruitment and retention.

Fostering Diversity and Inclusion to Support Pay Equity

Inclusive cultures are good for business. Gartner found that diversity improves performance by 12%, and intent to stay by 20%, yet the tech sector struggles to achieve diversity.

The representation of Black professionals in tech increased by just 1% between 2014 to 2021. Women of color face more significant challenges in the tech industry. While a total of 27% of computing roles are held by women, only 3% and 2% are held by Black and Hispanic women, respectively, according to Accenture.

A commitment to DEI is inseparable from pay equity. DEI and corporate profitability are also interlinked. Studies by Boston Consulting Group and McKinsey show 19% higher revenues and 25% greater profit, retention and attraction of talent for companies committed to DEI.

Adopt a culture of inclusion and diversity by:

  • Providing opportunities for promotion. Half of American adults believe that "women being treated differently by employers" is a major reason for the gender pay gap. PWC says the most significant driver is the "motherhood penalty".
  • Provide examples of female leadership and role models to promote diversity, for example, Ernst & Young UK's Innovate Finance program champions equality and career progression for women in Fintech. Profile female leaders to inspire more diversity.
  • Track pay raises and promotions through regular pay equity audits.
  • Establish flexible work schedules, remote working and offer part-time work options.
  • Offer mentorship programs for underrepresented groups.
  • Foster cultural competency by actively listening to those from different backgrounds.

In addition, sustainable business practices can support pay equity and help to overcome issues relating to wellbeing.

This is especially relevant to tech employers as burnout affects over half of IT professionals.

Significantly, 62% report feeling emotionally and physically drained due to their job demands. Younger workers and historically underrepresented individuals face a higher level of issues relating to wellbeing. Millennials and Gen Z employees, together with LGBTQIA+, Black, Latinx, and women are more likely to struggle.

Addressing these issues can foster a more inclusive and diverse work environment.

Case Study: Microsoft

Microsoft's 2022 Diversity and Inclusion Report shows progress toward a more inclusive culture through pay equity analysis.

In 2022, 30.7% of people working for its core business were women, up from 26.6% in 2018.

In addition, women working for Microsoft in and outside of the U.S. earned slightly more than men in comparable roles. Racial and ethnically diverse U.S.-based Microsoft employees also earned slightly more than their White counterparts.

Microsoft's median unadjusted pay gap analysis, however, found that:

  • Women in the U.S. earned 89.6% of men's earnings.
  • Women outside of the U.S. were paid 86.2% of men's earnings.
  • Hispanic and Latinx U.S. employees earned 81.6% of White workers' earnings.
  • Asian U.S. employees earned 94.6% of White workers' earnings.
  • Black and African American U.S. employees earned 76.7% of White workers' earnings.

As workers in comparable roles earn comparable pay, the report reveals that higher numbers of White and male employees hold higher-paying leadership positions. The company aims to double the number of Black and African American managers and senior employees in the U.S. by 2025, and is making progress toward that goal.

Microsoft is just one of three companies, alongside SAP and Salesforce, that featured in the top 25 employers in the U.S., UK, France, Germany, and Canada in Glassdoor's Best Places To Work In 2023. Based entirely on employee reviews, companies are ranked on workplace factors such as diversity and inclusion, compensations and benefits, culture and values, and work-life balance.

Overcoming Challenges in Tech

Overcoming HR Challenges in Tech

Navigating Bias in Compensation and Hiring

Gender bias is a widespread issue affecting the tech industry, and as previously noted, can affect career opportunities for women. Recruiting and hiring policies must be equal and consistent for all employees and job applicants.

While hiring bias is falling, it is still an issue in tech recruitment. Hired's report on wage inequality found:

  • 59% of HR leaders in tech reported that hiring bias has fallen considerably from three years ago.
  • 56% say it is still evident in hiring processes.

Incorporating the steps below can help to navigate bias in hiring and compensation:

Broaden your talent pool: Research from Hired into tech sector equality found that "38% of positions only sent interview requests to men in 2022." This is a 2% improvement compared to 2018 to 2020, but demonstrates the issues facing HR. AI repeats bias in hiring patterns if it goes unchecked, as Amazon discovered in 2018.

Ensure fair starting salaries: An equitable compensation strategy is essential. ln 2021, on average, women were offered 1.8% less salary compared to men when they applied for the same job at the same company in the tech sector. Consistently paying fair compensation avoids the need for salary negotiations that mean candidates are under-compensated. Pay transparency and pay equity legislation is designed to prevent that.

Promote salary transparency: Salary transparency reduces the potential for bias in hiring decisions and employee compensation practices, which can have a positive effect on both the wage gap and overall representation of marginalised groups. After pay transparency legislation was introduced, women in Los Angeles experienced a 15% reduction in underrepresentation; while women in New York City saw a 12% increase in representation. Indeed data shows that pay transparency data is now included in half of all job postings and has grown the fastest in high-wage occupations like software development, mathematics, and banking and finance. Including the pay range in job listings, and being more transparent about pay structures contributes toward a more equal workplace.

Carry out regular audits and analyses: Removing pay disparities and bias from your compensation structure requires regular monitoring. Carry out ongoing pay equity analyses to identify pay discrimination or pay equity issues. Extending those audits to performance reviews, and decisions made around pay raises and promotion can also identify potential bias. In tech, only 52 women were promoted to managerial roles for every 100 men at the same level - compared to 86 women for every 100 men across other sectors.

Promote diversity and equity in every level of the organization. 1 in 5 leaders say less than 10% of their tech talent comes from a diverse background, but 87% have made no changes in hiring to meet diversity objectives.

Case Study: Buffer

Buffer: Pay transparency and analysis helps to close the gender pay gap. Social media software company Buffer has published salaries of all employees online since 2013, claiming it broke down barriers for women. When analyzing its unadjusted gender pay gap in 2018, it showed that the company employed more men in higher paid technical roles. In 2019 its unadjusted pay gap was 15%. In 2022, it was less than 1%. A transparent salary framework has been key to closing the pay gap.

Racial and gender discrimination in tech are issues which companies can overcome by creating more inclusive workplaces.

Attracting and Retaining Diverse Talent

Racial and gender discrimination in tech are issues which companies can overcome by creating more inclusive workplaces:

  • Nearly a quarter of tech professionals reported they have experienced discrimination at work.
  • Over half of Black technologists experienced discrimination, in the form of a lack of leadership opportunities.
  • Nearly a third of Hispanic/Latino employees experienced hiring and salary discrimination.
  • 39% of women cite gender bias as their barrier to career progression, and 66% report there is no clear career path for them.

Recommendation for attracting more diverse talent into fintech in the UK apply to every HR leader in the tech sector. These include:

  • Create a more transparent culture around pay, and report on the gender pay gap.
  • Ensure women are being adequately informed of the value of equity stakes, stock options and other reward and compensation options available.
  • Expand upskilling opportunities for women interested in tech-oriented careers, especially those re-entering the workforce.
  • Engage recruiters to prioritise diversity.
  • Make leadership accountable for gender equality goals.
  • Create a more diverse network of advisors, especially for female founders and senior executives.
  • Provide leadership development and offer training to more senior leaders.
  • Commit to consistent salary bands to ensure parity in hiring. Improve salary transparency using tech-enabled solutions.

Case Study:

Mad Street Den:

Ashwini Asokan, founder, and CEO of AI company Mad Street Den, a California based start-up, adopted a 50-50 policy in gender equality from its launch. Half of its 300 employees are women, including at management level, where women hold leadership positions in data analytics, product, and engineering. The company also has offices in Chennai, India, New York, and Dubai.

Measures taken to boost retention, including 100% pay parity, an on-site nursery, and robust hiring processes.

Creating a culture of inclusion is critical to attract and retain talent. That includes taking steps to eliminate workplace discrimination, which is proving to be a challenge for employers.

By committing to a culture of pay equity, issues relating to diversity and pay discrimination are identified at an early stage. Pay equity enables HR to understand what is driving pay disparities and strengthen DEI initiatives.

By committing to a culture of pay equity, issues relating to diversity and pay discrimination are identified at an early stage. Pay equity enables HR to understand what is driving pay disparities and strengthen DEI initiatives.
- Mad Street Den

Managing Employee Expectations and Ensure Fairness

The emerging trend of opportunity equity provides HR tech leaders with an effective tool to ensure workplace fairness.

Opportunity equity ensures all workers have equal access to opportunities for employment, development, and career advancement, irrespective of gender, race/ethnicity, age, and other personal attributes. The following strategies can provide the foundations for opportunity equity in tech companies:

Build trust by creating a culture of pay equity: Gartner found that when employees don't trust their employer, they don't believe their pay is equitable. An employee sentiment survey can uncover specific and actionable insights into the way your teams feel about issues such as workplace equality and fair pay.

Create clear and detailed career advancement policies: Sharing promotion policies also helps to build trust and remove ambiguity around career advancement opportunities. Create clear criteria for all HR teams to follow and reduce the potential for unconscious bias in the workplace.

Make it easy to apply: Support opportunity equity initiatives by providing information on relevant job opportunities and how to apply.

Employers in the EU, Illinois and Colorado will be required by law to adopt policies of opportunity transparency.

Why reverse discrimination matters

In the complex regulatory arena of pay equity, HR leaders in tech and fintech should also be aware of the potential for reverse discrimination in ensuring fairness in the workplace.

Reverse discrimination is the unfair treatment of employees in a majority group based on race, gender, and so on. It can often arise from legislation intended to address discrimination against minorities and marginalized groups, such as women and LGBTQIA+ people. Examples of reverse discrimination include:

  • Hiring or promoting female employees over more qualified males based on gender alone, or giving women more favorable treatment at work due to gender.
  • Discriminating against a White employee in favor of a racial minority.
  • Making recruitment or promotion decisions in favor of minority groups, despite the experience or seniority of majority job applicants, such as White males.

The Role of Technology Solutions

Exploring Innovative Tools to Support Pay Equity Efforts

Pay equity software supports the efforts of tech and fintech HR leaders in closing the gender pay gap, creating an inclusive culture, and attracting and retaining talent.

Further, committing to pay equity sets your organization apart. Pay equity software:

Further, committing to pay equity sets your organization apart. Pay equity software...

  • Saves time and resources and helps organizations to comply with increasingly complex legal and regulatory requirements across multiple jurisdictions.

  • Identifies, analyzes, and creates action plans to address gender pay gaps.

  • Measures pay disparities based on protected classes, such as race, ethnicity, gender, age, disability, and more.

Organizations use pay equity software to identify the root causes of pay disparities and proactively protect against future pay discrimination claims, as well as creating a culture of equitable pay.

Best-in-class pay equity software tools also assist with the creation of remediation plans, offer intersectional audits, and ensure compliance with EEOC Title VII guidance.

EEOC Title VII Guidance

A technical assistance document issued in May 2023 outlined the application of Title VII of the Civil Rights Act of 1964 to automated systems. It aims to prevent discrimination caused by AI to job applicants and employees, including areas which directly affect pay equity.

Employers cannot delegate responsibility for discrimination to a third-party software provider, nor rely on a vendor's assurance that its software complies with EEOC Title VII.

EEOC guidance states that "in many cases", an employer is responsible under Title VII for its use of algorithmic decision-making tools even if the tools are designed or administered by a software vendor, "if the employer has given them authority to act on the employer's behalf."

Research from Josh Bersin found that:

  • 71% of business leaders see pay equity as a "critical component" of their talent and business strategies.
  • Only 5% are "truly excellent" at pay equity.

Coupled with a robust commitment to pay equity, software tools enable your business to become a high-performance organization.

How PayParity® Can Benefit HR Leaders in the Tech Industry

The only way to determine whether your pay practices are truly equitable is to conduct an intersectional pay equity audit

Intersectionality is one of the key differentiators for Trusaic's PayParity pay equity audit software. PayParity can analyze compensation through the intersection of gender, race/ethnicity, disability, age, sexual orientation and more in a single statistical regression analysis. At once, employers can understand compensation differences across their workforces, accounting for multiple demographic details.

PayParity finds and remedies the root causes of pay disparities using advanced analytics and algorithms that pinpoint problematic factors, including biases and faulty systemic processes.

A pay equity software solution like Salary Range Finder can help to determine competitive and fair salary ranges by overlaying internal pay equity audit data with that of external labor market data provided by Lightcast. Fair salary ranges are instantly determined for your job listings by combining the two data points. The Salary Range Finder helps HR identify equitable salary ranges for job listings.

By using both internal pay equity audit data and external labor market data, the Salary Range Finder can generate an internally and externally equitable salary range for all jobs.

Compliance with EEOC Title VII Guidance: In addition to offering intersectional pay audits, Trusaic PayParity offers full compliance with EEOC Title VII. By leveraging the benefits of our software, our clients can be confident that they are not violating workplace legislation with regard to bias or discrimination.

For HR leaders in tech and fintech, this is a vital element to ensure compliance and create workplace equality.

More Than a Pay Equity Solution

Pay equity software can support HR tech leaders to:

  • Identify the root causes of pay disparities in your organization and implement steps to close pay gaps by conducting an intersectional pay equity audit.
  • Ensure compliance with pay equity legislation in the U.S., the EU and globally.
  • Understand the implications of EEOC Title VII in relation to employer liability and your pay equity software provider.
  • Commit to pay equity in your compensation structures.
  • Create equitable, explainable, and competitive salary ranges to comply with pay transparency laws.
  • Create inclusive cultures and workplaces of equality and diversity with opportunities for everyone to thrive.

Ensure GDPR Compliance: Trusaic is GDPR certified and can assist any organization in any EU state in meeting its obligations under both the EU Corporate Sustainability Reporting Directive and the EU Pay Transparency Directive.

Be confident in your data security with Trusaic PayParity

Trusaic undergoes an independent audit of all five Trust Services Principles every year, conducted by BDO, LLP as part of our SOC 2 Type II certification process. A copy of the report is available to clients upon request.

Our workplace equity platform is hosted on Microsoft Azure: Cloud Computing Services.

Customer data is physically protected by Trusaic's cloud hosting provider which is SOC 2 and ISO27001 certified. You can be confident your data is protected both from physical and environmental threats.

Conclusion

As the global focus on closing the gender pay gap continues, HR leaders in the tech and fintech sectors are in the spotlight, and the stakes are high. High performance organizations can stay ahead of the curve by adopting pay equity principles and committing to a culture of transparency and inclusion. As legislation continues to evolve, pay equity is not simply a matter of compliance, it is the right thing to do. Pay equity helps to build a more inclusive work environment, attract, and retain talent, and enhance employee engagement, in addition to ensuring compliance and risk mitigation.

Your journey starts here. Learn more about how you can achieve authentic pay equity.

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