Gender pay gap in UK tech sector improves but more female leaders needed

Analysis by Pinsent Masons has found that most companies in the TMT sector have improved their median hourly gender pay gap by roughly up to 3% since the reporting obligation was introduced in 2017, but the gap is reducing slowly. The sector as a whole has also performed slightly better than other industries such as infrastructure and financial services.

Approximately 605 TMT employers have reported their gender pay gap for year 2022-23, which is a higher number than companies who reported in other sectors. Of those reported so far, women working for large TMT companies are paid around 15.6% less per hour than men. In comparison, in the infrastructure and financial services sectors women were paid over 20% less per hour than men in 2022-23.

However, the difference in the median bonus payments to men and women, on average, is higher, at 18.5%.

Other signs of progress made by TMT employers include small, positive changes in the top pay quartile and lower pay quartile figures. In 2022-23, women in the TMT sector made up 26.1% of employees in the top pay quartile, while 44.8% of employees in the lower pay quartile were female. Both figures represent a slight improvement from the previous year.

Underlying causes of the technology sector pay gap

Like several other sectors of the economy, women tend to occupy the lowest-paid jobs in the tech sector, and there is a particularly low representation of women in senior leadership roles. Those factors have contributed significantly to the gender pay gap across the sector.

Recruitment, particularly at entry level, and career progression are two areas where challenges remain to reduce the pay gap. Employers say that TMT typically attracts fewer women when deciding their career.

Some companies have also indicated there is a concerning trend of dissatisfaction amongst female employees in the technology industry, as 42% of women have considered leaving the tech industry to further their careers in alternative sectors.

Actions taken to address the issues

One area of focus to assist with closing the pay gap appears to be on recruitment and attracting more women into the sector. Initially, this may have an adverse impact on the pay gap if women join in more junior roles and then have to work their way up. There is a smaller pool of women at senior levels, so these women are in demand and, over time, will grow the representation of women in senior roles.

To attract more female candidates to the sector, some companies are adopting diversity initiatives which provide new opportunities for female candidates to find roles. Many companies are promoting the sector at school and university level, with the aim of encouraging more women to think of TMT as a career choice.

Companies are also removing gendered language in job adverts in an attempt to bring more women into the sector. Virgin Media, for example, has implemented a gender-neutral job description and job advert template to ensure inclusive language is used. The company hired 42% of women into graduate internship schemes after removing CVs throughout application processes. They also have a tool called ‘Match Me’ which encourages women to consider roles they might not have otherwise considered. Additionally, Virgin Media sponsors a mentoring programme called ‘Step Up’, which mentors women in their second year of university who are interested in pursuing a career in STEM.

Companies have reported seeing better gender balance in recruitment since the reporting obligation was introduced in 2017 and are continuing to drive progression at the recruitment stage, with mandatory unconscious bias training for hiring managers and inclusive recruitment processes.

Sky UK is one such company that has adapted its recruitment processes to help identify barriers for diverse candidates. It is now mandatory that recruitment managers undertake training which is designed to help minimise biases as part of the hiring process. As well as this, Sky’s ‘Get into Tech’ initiative, now into its seventh year, provides women with free training for basic software development. The programme has allowed over 200 women to start their career in technology.

Many employers have also focused on efforts to retain female employees, such as reviewing and changing their parental leave policies and embracing flexible working and family balanced policies. They are also seeking to increase female representation at senior leadership levels by providing leadership or mentoring training programmes and ‘Returners to Work’ initiatives for employees who have experienced a career break but wish to return to work.

BT Group is among the large employers that are part of the 30% Club, meaning they are committed to having 30% or more representation of women on all of their boards. BT has also designed and launched a talent programme for high potential middle managers, Accelerate, which was formerly known as TechWomen. The initial cohort of the programme had 220 women participating, while BT’s talent programme for senior managers also had 161 women participating.

Vodafone has set an ambitious target to become the world’s best employer for women by 2025, having developed workshops to attract female students into STEM careers, as well as a ‘ReConnect’ programme to welcome back women returning from career breaks. Its global goal is for women to hold 40% of management and leadership positions at the company by 2030. The current representation stands at 32.5%.

Co-written by Lesley Finlayson of Pinsent Masons.