Bad Karma --- or Bad System?

Recently Microsoft CEO Satya Nadella said something that upset a lot of women. At the Grace Hopper Celebration of Women in Computing he was asked how women should go about asking for a raise. His response was that women shouldn’t ask for a raise but trust good “karma” and know/have faith that the “system” will take care of them.

Hours later, Nadella corrected his comments saying he was wrong and that when a woman thinks she deserves a raise she should ask for it. 

To my mind there are two issues here:

• The high tech culture and its impact on women’s pay
• The system that women need to trust that will correct their pay

High tech culture and its impact on women’s pay

I want set something straight.  This issue can/does exist in other industries.  But the high tech industry has been in the spotlight lately.

High tech has been dominated by men for years.   STEM jobs have not attracted women as they have traditionally been known as “male” professions. 

• While 57% of female graduates are women, only 12% are in computer science.
• Women make up half of the U.S. workforce, but hold just 25% of the jobs in technical or computing fields.
• A 2011 report by the U.S. Department of Commerce found that there has been no employment growth of women in STEM jobs since 2000.

For women who do get hired by tech companies, they enter a sexist culture.

Men aren’t shy about asking for raises. Women are. They don’t self-promote but are much more likely to believe that if you simply work hard and get great results, you’ll get noticed and promoted.  But many companies penalize women when they do ask.  They may be labeled as bitchy or pushy.  This is largely due to preconceived notions about gender roles in the workplace. 

The result:  a pay gap exists on every level of STEM jobs. In Silicon Valley, men with bachelor’s degrees earn 40% more than their female educational counterparts, according to an analysis of census data from the 2014 Silicon Valley Index.

Some tech companies have been known to take advantage of this. At an Australian tech conference in September, startup founder Evan Thornley said that a perk of hiring women is that their salary is still “relatively cheap compared to what we would’ve had to pay someone less good of a different gender.”  

What?  Realizing that women are undervalued and then paying them less than men because you know you can isn’t a solution that any company should adopt.  That’s like reading a nutritional study that say saturated fat might not be that bad for you after all and then running out and eating an entire stick of butter!

The system works --- except when it doesn’t

Why tell women to accept lower pay in the short-term for the promise of the system correcting itself later, when that same system in general has been shown to act unfairly? 

• Since 2009, corporate profits in the US have increased by 84%, one of the largest five-year increases ever.
• From 1978 to 2013, CEO compensation, inflation-adjusted, increased 937%, a rise more than double stock market growth.  
• From 1978 t0 2013, pay for American workers have increased by 10.2% despite record productivity.

A challenge for pay transparency

As we move towards more pay transparency this will be a big red flag that will have to be fixed.   Companies need to get ahead of the curve and correct the problem. If they do, not only will engagement increase, they’ll have a competitive advantage.

The Fairness Pay Act has been struck down twice; however, some version of it will likely be passed in the future.   Among other things, the first two versions held companies liable for “pay disparities” that have occurred due to a past history of pay discrimination in an employee’s career.  This would include not only the current employer but past employers as well.   But that will have to wait for a future post.

My point?  We don’t need to wait until it becomes law.  We know the problem exists --- let’s fix it.

Thoughts?

Jacque Vilet, President of Vilet International, has over 20 years’ experience in Global Human Resources with major multinationals such as Intel, National Semiconductor and Seagate Technology. She has managed both local/ in-country national and expatriate programs and has been an expat twice during her career.   Her true love is working with local national issues.  Jacque has the following certifications:  CCP, GPHR, HCS and SWP as well as a B.S. and M.S in Psychology and an MBA.    She belongs to SHRM, Human Capital Institute and World at Work.   Jacque has been a speaker in the U.S., Asia and Europe, and is a regular contributor to various HR and talent management publications. 

Comments

[Trevor Norcross]

Hi Jacque,
This is a really interesting topic with a lot of potential for misleading data. In my opinion I think we need better data to really understand the issue. The census data from the 2014 Silicon Valley Index you site is too broad. People just can’t believe the data when presented in this fashion and will write it off as bad data. We need a comparison of pay for employees in the same job and level to make the data more believable. Is this really a pay issue when you compare employees in the same job, a personal life choice issue and/or a bias that limits access to STEM jobs for women? If it really is purely a pay issue wouldn’t the marketplace tend to self-correct as companies look to take advantage of the cost difference and drive more demand?

When you look at the data from the clients you consult with in the Valley do you really see a 40% difference in pay for employees in the same job and level? There is no dispute that there is an issue, we just need a better understanding of the issue. Is the issue the same in other tech centers? Is the pay gap less prominent in Seattle, Austin, Denver, NY, Boston,…?

BTW, how is the reaction to the offer Apple and Facebook are implanting to pay for female employees to have their eggs frozen as a way to attract more women? I can see the right intentions behind the move but it can also be signaling that if you want to make it in the Valley as a women you have to do it our way.

Thanks,

[E. James (Jim) Brennan]

The most precise analyses have shown the gender bias to be closer to 20% after all other variables have been considered. Nevertheless, the "market" solution has been consistently undercut by the old habit (once a joke) of hiring two women for the cost of one man with a slightly different title.

[Jacque Vilet]

Jim ---- This is a survey of Silicon Valley companies. The 20% you refer to is U.S. wide and all industries.

Trevor ---- This is strictly Silicon Valley because it's the high tech industry we're talking about and SV has the largest number of high tech companies in the U.S. (understand there are other high tech centers). Also, SV companies have come under the most scrutiny lately given Google, Apple and Facebook's recent revelations about their employee population gender gap.

It's the chicken and the egg. Do women steer clear of STEM jobs because they have been taught historically that those jobs aren't for women? Do they stay away because word has spread that high tech culture is not "user friendly" for women? Another reason for low number of women is that many in STEM jobs already leave companies because of the sexist culture (too much info to include in this post). Regardless of the reasons, there are far fewer women in STEM jobs than men.

Agree that this survey doesn't show gap by job level data. In fairness though I don't know of any survey that looks at gender gap by job level. The companies I know of in SV with STEM jobs do have gender gap at each level but the gap varies.

This survey compares the pay gap for all levels lumped together by educational level and that’s the best we get. Ironically degrees may not become as important in the future as SV high tech companies at least are beginning to focus more on skills -- not education or years of experience.

The data is not ideal but it's the best we have. I wouldn't dismiss it. I don't think many people would deny there is a problem.

Companies need to look at pay gaps by job level in more detail to determine whether they need to take action. I'm betting that they do.

As for as the “freezing eggs” story I had to laugh. These companies are trying --- but the response is not positive. Women believe companies are doing this so they will quit worrying about their biological clock and continue to work!! So . . . will they unfreeze the eggs at age 50?? :-)

[Jacque Vilet]

Sorry ---- I need to correct:
" Another reason for low number of women is that many in STEM jobs already leave companies"

It should read "women in STEM jobs"