Study highlights lack of senior female talent in UK’s Tech sector

The gender pay gap in the UK tech sector has narrowed but more female leaders are needed. Those are the two key findings from research conducted by Pinsent Masons. The data shows that most companies in the UK’s technology, media and telecommunications sector have improved their gender pay gap since 2017, but low representation of women in senior leadership roles and dissatisfaction amongst female employees in the industry remain the key underlying causes of the pay gap. We’ll speak to D&I specialist about the problem and how it can be addressed. 

The data covers 605 employers in the tech sector who reported their gender pay gap for year 2022-2023. It shows that women working for large TMT companies are paid around 15.6% less per hour than men. Whilst that gap is too wide, it has narrowed in recent times and is actually smaller than a number of other sectors which are in a worse state including infrastructure and financial services where women were paid over 20% less per hour than men in 2022-23.

The underlying causes are discussed in an analysis piece by Pinsent Masons’ Employment Team. So, 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. Also, some companies have indicated there is a concerning trend of dissatisfaction amongst female employees in the technology industry - 42% of women have considered leaving the tech industry to further their careers in alternative sectors.
So, what can be done to help tackle the problem? Charlotte Harman is a D&I specialist who works with a number of clients in the tech sector and earlier she joined me by phone from Leeds to discuss this. So, what about the recruitment and retention issue, and that lack of female talent in senior positions? 

Charlotte Harman: “I do think that they are the two key areas of focus for tech companies trying to reduce the gender pay gap. Addressing this at recruitment level will obviously see a greater number of female candidates applying for the roles within technology companies and many businesses are already taking steps to address this. But, of course, there's also then a need to retain that female talent and to allow those female joiners to progress their career within the tech sector. Identifying underlying reasons for female employees leaving their career, or otherwise just being generally dissatisfied in their role, is really important to allow businesses to tackle these issues and, ultimately, see more females filling senior leadership roles in the future.”

Joe Glavina: “The research shows quite a high level of dissatisfaction among female staff in this sector which is a concern.”

Charlotte Harman: “I think this is a big problem within the wider TMT sector. The sector has historically been male dominated with very few female role models filling senior leadership roles and whilst we're seeing technology companies introducing programmes and initiatives aimed at students to encourage them to think about careers in technology and, in turn, attract more female joiners this does go some way to addressing the issue at the junior end but it does still leave a gap in the number of senior roles filled by female employees which, of course, is contributing to the gender pay gap that we're seeing in this sector. What companies in this sector also need to do is focus their efforts on retaining female employees. This could be through programmes aimed at giving female employees the opportunity to train, progress their career, or even reskill, and companies also need to take steps to avoid the maternity penalty by reviewing policies, promoting flexibility, and focusing on what can be done to support female colleagues who are returning from a career break. We’re seeing the gender pay gap issue is becoming more of a focus area for many technology companies, especially multinational companies, in light of the EU Pay Transparency and Corporate Sustainability Reporting directives as a result of the wider reporting obligations that are being introduced under those directives.”

Joe Glavina: “You mentioned those two EU Directives, which go further than the UK’s gender pay gap reporting obligations introduced in 2017. Of course, the directives only apply to EU member states and since Brexit the UK is outside that framework, but nonetheless this is relevant to many of our multinational  clients. Can you tell me first about the directives?” 

Charlotte Harman: “Yes. So, starting with the EU Pay Transparency Directive, this will require member states to establish gender pay gap reporting regimes that look very similar to those currently in place in the UK, but the directive will go one step further and it will introduce a number of pay transparency rights for employees, and also a requirement to report on gender pay gap across the whole company and introduce requirements to remedy gender pay gap differences where they can't be justified. The second of the directives, the Corporate Sustainability Reporting Directive, will introduce disclosure obligations, again, relating to gender diversity especially at top management level, gender pay gap, and it will also require disclosure around family-related leave entitlements and uptakes.”

Joe Glavina: “Finally, Charlotte, how are we helping multinationals?”

Charlotte Harman: “Well, we’re currently assisting a number of our multinational clients to understand their obligations under the new EU directives and how they can take proactive steps to identify any issues and proactively rectify these which, in turn, will help close the gender pay gap. This can include undertaking legally privileged equal pay audits to enable clients to identify those risk areas and address those issues identified but in addition to the work that we are doing with clients on the new EU directives we're also helping clients tackle the issue of retaining female colleagues in the way that I've already described, including clients conducting reviews of their family-friendly policies with a view to promoting flexibility which, again, is seen as a key step to reducing the gender pay gap and our diversity and inclusion consultancy, Brook Graham, are also talking to clients about diversity and inclusion in the context of their gender pay gap reporting obligations. Brook Graham is helping clients to implement wider diversity and inclusion strategies and also addressing particular challenges such as unconscious bias and developing inclusive leadership which, in turn, is obviously seen as a way to further reduce the gender pay gap.”

The Employment Team covers this in more detail in their Out-Law analysis piece ‘Gender pay gap in UK tech sector improves but more female leaders needed.’ We’ve put a link to that in the transcript of this programme for you.  

LINKS
- Link to Out-Law article: ‘Gender pay gap in UK tech sector improves but more female leaders needed’