The pandemic tech boom has subsided, with recent headlines sharing news of tech sector layoffs, hiring freezes and job offers being pulled in the midst of economic uncertainty.
Staff cuts from Twitter and Meta alone have left 15,000 workers jobless. More recently, Amazon announced it would be culling around 10,000 jobs. With these leading lights of the tech industry dimming, many are concerned that this is indicative of a potential downturn in the sector.
Simon Noble, SVP EMEA, Magnit, said: “Businesses across the tech sector are experiencing significant staffing changes, as a wave of redundancies hits the industry with force. Now is a good time to reassess long-term talent strategies, and prepare for any future shift. In order to be more agile in responding to variable economic conditions, businesses should consider leveraging different types of workers. For instance, contingent workers, those who work on a project or temporary basis, are an effective source of top talent to fulfil fluctuating business needs.”
However, this tumult in the labour picture presents a unique opportunity, offering other companies the possibility to bring in top-level talent that they otherwise might not have attracted.
Indeed, with Skillsoft’s latest IT Skills and Salary report finding that 66% of decision-makers see skills gaps in their teams, perhaps this period could represent a turning point in the tech talent crisis.
Findings from the report reinforce that the future remains bright for tech companies, if they are able to close their skills gaps:
80% say skills gaps pose high or medium risk to their team’s ability to meet objectives, whilst 63% have been unable to fill at least three positions in the last year.
The top three most challenging areas to find qualified talent are cloud computing; analytics, big data, and data science; and cybersecurity.
59% of IT departments actually expect a budget increase in the next year (up from 35% in 2021), with the top skill areas of investment being cloud computing, security, and AI and machine learning.
What else might lure top talent to the tech sector?
Tech companies that are open with their staff about how much each person earns have fewer – and in some cases non-existent – gender pay discrepancies, according to data from real-time compensation benchmark platform, Figures.
Having surveyed 493 tech companies and startups across the UK, Germany and France, Figures’ Gender Pay Gap and Pay Transparency report found that adding any amount of transparency to a pay policy – even if it’s limited in scope – can reduce the gender pay gap by a third, on average. What’s more, making the entire pay policy transparent, including releasing the details of individual salaries, was found to eradicate the gender pay gap entirely among men and women in the same roles and locations. At the same time, in companies with closed pay policies, the report found that men were paid, on average, 3.5% more than women holding the same role.
It’s been a long-held assumption that pay transparency can make compensation more equitable but until the release of Figures’ latest report, there has been little evidence to back this up.
Identifying the rates of transparency
Figures was founded in 2020 to make it easier for companies to compare their compensation policy with the competition. The startup’s platform integrates with major HRIS software such as Personio, BambooHR and HiBob and provides businesses with more than 60k real-time compensation benchmarks from 900 European startups, across a range of 100+ job types, locations and at companies of varying stages of growth.
For its pay transparency report, Figures surveyed 493 companies about their pay policies. They ranked each one on how transparent they were when it came to their compensation policies, whether they published a salary grid and if they publicly shared individual salaries. Only 11% of companies surveyed said they have fully transparent policies, while 41% of companies said they don’t have any transparency at all when it comes to salaries.
UK firms were more likely to offer transparent compensation policies, while German companies were the least likely to broadcast individual salary details. The UK and Germany tied for the number of companies that offered transparent salary grids, at 27%.
Adjusted and non-adjusted pay gaps
The Figures team then compared the salaries of men and women in each company regardless of role (to find the non-adjusted gender pay gap), before comparing the salaries of men and women in the same role in the same location (the adjusted pay gap).
For non-transparent companies, when looking at the adjusted gender pay gap, men were found to be paid an average of 3.5% more than women for doing the same jobs in the same locations. This dropped to 2.4% for companies with a transparent company policy and 2% for companies with a transparent company policy and a transparent salary grid. For fully transparent companies, this gap dropped to zero.
When the non-adjusted comparisons were made, the gender pay gap was found to be 22% on average for non-transparent companies yet dropped by a third to 15% among companies with fully transparent policies. While this is significant, it’s still a large gap even among transparent companies, a finding that can be attributed to an uneven split across roles between the sexes.
The findings’ significance
Today’s Gender Pay Gap and Pay Transparency report presents a seemingly simple, yet highly effective way to tackle this problem by creating more open compensation policies. This goes to the heart of the mission of Figures. The startup supports companies to create the most structured compensation policy possible with the help of its products and data in order to give them the confidence to be more transparent.
This whole process can help them better manage their remuneration budgets to create fairer, more attractive and motivating working conditions for both existing employees, and to attract the very best in new talent.
Figures co-founders Virgile Raingeard said: “We’ve had a strong intuition for some time that there could be a direct link with pay transparency and the gender pay gap. Having worked in HR for most of our careers, we’ve seen the benefits and importance that having open conversations about salary and compensation can bring. The findings from our latest report confirm this – being more open about who is earning what can lead to more equitable compensation across the board. The results show that pushing for pay transparency should be a priority amongst companies and lawmakers, to help close the gender pay gap and to strive for a more equitable world.”