Many older, established companies are already in the habit of making sure they’re not discriminating against women when it comes to pay. Now tech startups are starting to get hip to the practice, too.
Pinterest is joining a growing group of young tech startups that are closely reviewing employees’ salaries to make sure men and women are paid fairly. An outside firm is analyzing pay at the 5-year-old social network to make sure it’s not discriminating against any particular group, a spokeswoman recently told The Huffington Post.
The reviews, which started about 18 months ago, take place “during the times of year when employees are up for bonuses and promotion,” said spokeswoman Malorie Lucich in an email. The company, which has more than 600 employees, wouldn’t say if anyone has gotten a raise as a result of its analysis or whether it had turned up any bias.
Pay audits are gaining steam quickly in part because of the growing focus on the struggles of women in the tech industry -- there are fewer females in general, and a real dearth in high-profile positions. The idea is also catching on as so many of these startups start to, well, grow up.
“At first a startup is so focused on survival, and so convinced of its own idealism and its own rightness, who could possibly think we could have biases,” Glenn Kelman, chief executive of 10-year-old real estate website Redfin, told HuffPost.
At the prompting of a couple of its female employees, Redfin not only took a companywide look this year at how it pays women and men, it also published the results. The data happened to look pretty good -- pay is about equal for men and women at the 1,000-person company. In some cases, women are pulling in more money. That surprised Kelman, who cautioned that he expects that might not always be the case. "We're going to make mistakes," he said. The key is having a system for catching discrimination and quickly fixing it.
Redfin did its first salary audit this year.
Kelman said that since Redfin did its audit, other chief executives at small and midsize companies have since reached out to ask about the experience. They’re not on board with pay audits yet, but are exploring the idea, he said.
Some women were being paid less than men at enterprise software company Salesforce.com before it launched a similar effort earlier this year -- also at the prompting of a few female employees. “In certain positions, people were not being paid at the same level,” Chief Executive Marc Benioff recently told The New York Times.
“This is definitely new for startups,” said Joelle Emerson, the founder of Paradigm, a consulting firm that focuses on diversity. Emerson said that a few of her clients, including Pinterest, have started doing the pay comparisons.
Big companies have been doing these types of audits for years. The end game might not be fairness, per se, but to avoid getting sued for discrimination.
Looking for bias in salaries “should be a standard,” Donna Morris, the senior vice president of people and places at software company Adobe, told HuffPost. Her department looks every year, she said, and Google, Facebook and Microsoft do as well.
If you’re not doing these comparisons, “it’s like a ticking time bomb," said Ken Abosch, a compensation practice leader for Aon Hewitt, which does this kind of work for about 10 to 20 percent of the Fortune 1000 in any given year. (Some employers’ do their own analysis, typically in the HR department.)
Still, even though the practice makes sense, "a surprisingly large number of organizations don’t do this," Abosch said.
There are plenty of cases where Abosch and his team find that females are underpaid relative to men, or when older workers are paid less than younger workers. When that happens, “those things have to be corrected,” he said. Abosch said most companies won’t explain why you’re getting a raise when discrimination is found. But then again, most people getting a random raise aren't going to spend too much time worrying about why.
There's still a long way to go on this issue of pay parity. Men in Silicon Valley earn up to 61 percent more than their female peers, according to a report this year from Joint Venture Silicon Valley. Indeed, the gulf between the sexes is worse in Silicon Valley than in San Francisco at large or the U.S., according to the research group.
If so many companies are starting to think about fair compensation, how could a gap remain? Well, first, there are still plenty of companies that aren't focused on this. And second, because "fair" pay isn't the same as "equal" pay in the workplace.
Companies reviewing their salaries are simply looking for discrimination in pay -- if all the people in a certain class are systematically making less for no good reason. They're looking to keep workers within an acceptable salary range -- so it could be fine for a woman to earn $40,000 a year and a man to earn $50,000 if that's the standard range for a position.
There are plenty of reasons people earn different salaries -- experience and ability, of course, are two. Also, some people negotiate harder for higher pay. Studies have shown that those people are typically men. Once you've got that lower-than-average salary, it follows you around.
The salary analysis at Pinterest is part of a broader diversity initiative at the company, which took the unusual step last month of publicly announcing its goals to increase its hiring of women and minorities.
“We believe the more diverse the team is, the more creative potential we have as a company,” said Michael DeAngelo, Pinterest’s head of people, in a recent blog post. “So we also care a lot about making sure our team includes a wide diversity of skills, life experiences, races, ethnicities, genders and other traits that make us unique.”