fbpx
Women in tech

Bro 2.0: Australian tech’s problem with investing in women includes how much they’re paid

- March 2, 2024 10 MIN READ
Studies suggest hiring people like the one in the middle may lead to reductions in the gender pay gap. Photo: AdobeStock
There’s no I in team, the saying goes, and according to Atlassian’s gender gap pay figures, no W either.

The difference between base salaries for men and women at the software company, reported to the federal government’s Workplace Gender Equality Agency (WGEA) report, released this week, show the blokes are paid 17.4% more as a median base salary. The national average is 14.5%.

Add things like bonuses and overtime for total remuneration and the gap climbs to 18.1% at Atlassian, all though that’s less than the national media figure of 19%.

The annual WGEA report details individual company data for the first time. For a white collar sector that prides itself on selling a story of high pay for all, the fact that so many tech companies have a gender pay gap in double figures – up to 30% in some instances – shows the sector is not as unique or special as it likes to think.

The national median annual base salary of $79,613 for men in 2022-23 compares to $68,071 for women.

But as Mark Twain famously observed: “There are 3 kinds of lies: lies, damned lies, and statistics.”

There are so many factors at play the median base salary/bonus figures that the reporting paints a very broad brushstroke picture. The respondents are companies with more than 100 people, and as an aside, we can’t help wondering how many VCs are glad to be smaller than that right now.

The headline “gap” numbers sound pretty spicy and like a sports score, are easy to digest, but they’re also rarely apples with apples comparisons. No doubt there’s smoke, the question is how much fire?

It’s worth spending a little time digging deeper into the rather detailed reporting compiled in the WGEA data for a clearer picture. I’ll get to that a little later after we deal with the top line numbers.

Equal pay has been law in this country for more than 50 years. But that’s about award wages – the minimum – and you may have noticed that last year the federal government was locked in a battle with employers and the crossbench over its Same Job, Same Pay legislation. The complexity of labour hire was exemplified at Qantas, where, depending on who you work for, you could be a flight attendant on the same plane on a different hourly rate to your colleagues. But that’s not a gender issue.

Everything above an award is negotiated and let’s be honest, at that point it’s a haggle. A worker wants what they think they’re worth and the boss, a little less. That’s the creative tension at the heart of capitalism, with government setting a floor price. How they meet in the middle remains a mystery, despite increased government legislation around pay disclosure.

But here’s a vivid recent example in my mind. When Ahmed Fahour was running Australia Post back in 2017, he had a base salary of $2.1 million and took home bonuses worth $8.7m in his final year. When Christine Holgate replaced him, she had a base salary of $1.375m, with a potential 100% bonus, so no more than $2.75m max. You may recall subsequently, how the then PM demanded, and got, her head on a platter over gifting managers $20,000 worth of watches. But I digress. Executive pay is its own debate, yet there are moments where gender is writ large.

One thing the WGEA data does explore in each company is gender composition by pay quartiles, alongside an overall figure. A simple life hack for any company looking to reduce is gender pay gap is put more women in the senior ranks – it does wonders for your medians and averages.

While I’m there, let’s have a quite look at boards in the WGEA report. There’s one women chairing a company for every 4 men (19%). Women are just over a third (34%) of board members. A quarter of boards are considered balanced with at least 40% women/men. Another quarter (26%) have no women involved in corporate governance.

Women on boards. Source: WGEA

We know the numbers around investing in women – incidentally, invest in women the theme of International Women’s Day next Friday – when it comes to venture capital investments, so what’s going on with pay?

Sally-Ann Williams, CEO of deep tech incubator Cicada Innovations, has been busy of late dealing with the issue of diversity in STEM for the federal government, had this to say.

“The are a few things to look for in the gender pay gap data in the tech sector. First is there a gender gap between who holds the higher paying roles vs lower paying roles? Second is in those roles is there is still a pay gap based on gender?” Williams said.

“Third and perhaps most interesting, do they have gender pay gap policies or not? Many of these companies have publicly stated aims about inclusion and diversity but on the basic measure of pay and pay gap policies they are failing.

“I would hope that they haven’t waited for the publishing of this data to address it, but am disappointed that it is a clear signal that metrics they are measuring and the governance controls they have to their public commitments are lacking.”

Professor Anne Bardoel from Swinburne University said no other country in the world collects the depth and breadth of data comparing industry equality by industry and employer and it does show a problem.

“We still have a national gender pay gap of 12%. We have the data that proves this,” she said.

“We need to make employers more accountable for paying women and men differently for doing the same job. As the famous feminist Joan Acker wrote back in 1990, ‘to say that an organisation is gendered means that advantage and disadvantage, exploitation and control, action and emotion, meaning and identity are patterned through and in terms of a distinction between male and female, masculine and feminine’.”

The good, the bad and the WTF?

As you’d hope for a business in the business of selling corporate culture, Culture Amp is one of the best performers, at 5.2% on the median base salary, alongside Employment Hero at 6.2%.

Funny thing about Employment Hero – founder Ben Thompson has been fighting other wars this week – is the bonus figure soars to 20.3%.

The company told Startup Daily that: “The current gap between our base salaries and total remuneration, is largely driven by our sales team. Members of this team receive financial incentives, on top of their base pay, which are linked to individual performance. Although we are seeing more and more women entering the sales team – which is great – that team is currently predominantly male.”

“We have always sought to hire the best talent regardless of demographic and when hiring we insist on equality of opportunity.”

The national parent leave numbers from the gender pay gap report. Source: WGEA

TL;DR. Blokes are good at sales and expect incentives that skew our results, so we’re working on it.

Meanwhile, at Culture Amp, Aubrey Blanche-Sarellano, the VP of equitable operations, said that while they’re proud their pay gaps are lower – in the WGEA’s eyes, a 5% gap isn’t a gap – than the industry standard, they’re prouder of biannual pay equity audits that reveal no systemic gap in like-for-like roles.

“That is, our further analysis shows that the pay gap reflected in WGEA reporting is due to imbalanced representation within different specialties at Culture Amp,” she said.

“The most significant of these is that within our R&D roles -which tend to be the highest remunerated – 36.7% of our Campers identify as women or non-binary, compared to 56.2% of our customer-facing Campers. We are actively working to close this representation gap in line with our commitments to equity & inclusion as a part of our overall pay equity strategy.”

Meanwhile having a female cofounder and CEO appears to improve things, but even Canva, it could be argued, falls short, reporting a 10.9% gap on media base salary and 10.8% on the median total remuneration while having “100%” female CEO. Melanie Perkins obviously needs to have a chat about her bonuses with the chief operating officer .

Overall, the gap at Canva is lower than the national averages. The company also has a higher ratio of women in the workplace, especially at senior levels, that most other businesses.

An outlier is Queensland software company Octopus Deploy, cofounded by Sonia Stovell, and in the news this week for a $43m takeover deal, at 31.5% on base salary and 31.8% on bonuses. I take a closer look at the end, but for now, simply note that women make up just 22% of the company’s workforce – even with women at “100%” in clerical and admin roles.

Among other female founded scaleups, Envato, cofounded by Cyan Ta’eed, sat at 15.1% for base salaries and 19.4% with bonuses. The figures at Airwallex, with Lucy Liu as cofounder, were 9.7% and 12%.

 

A national snapshot of the gender pay gap. Source: WGEA

Others, like Kogan HR, the labour side of Kogan.com was at 21.9% on base salary, and 22..7% on total remuneration. But it does have one Australia’s highest paid CEOs, taking home $15.2 million in FY22. With average weekly earnings for women in Australia currently at $1,956.80 (public), and $1,658.30 (private), that’s equivalent to the cost of 176 female employees.

US-based, Australian-founded ecommerce platform Rokt, which is purportedly looking to go public to sate its hankering VC investors, took the tech gold medal for pay with a 34.9% difference on base salary, and 52.4% after everyone’s dipped into the incentives lolly bag.

The figures hit home for founder and CEO Bruce Buchanan, who posted a response to the team that day, defending the business by saying company’s median gender pay gap is actually 18% – close to, but still higher than the national average – with just 22% of the total workforce in Australia.

“Rokt’s gap is primarily driven by gender mix in engineering. The comparison to other technology companies is not like for like as the Rokt office in Australia has more than 95% of people in Engineering, specifically focused on advanced technologies in our ecommerce relevancy area (Machine Learning, Data Science and AI),” he said.

“I am personally very passionate about the change required to remove structural barriers that restrict opportunities for anyone, and that contribute to our pay gap at Rokt. The key challenge for diversity in the tech industry is in the pipeline for women in engineering roles. There is a gender imbalance that starts with STEM subjects in school, gets worse with computer science and then gets even more skewed with advanced computer science degrees.”

He also made the point that 35% of Rokt’s global workforce is female, compared to Facebook (37%), Apple (34%), Google (33%), and Microsoft (29%). I’ll return to that specific point at the end.

Among others we looked at were Qld unicorn Go1 at 19.1% for both figures and ASX-listed Judo Bank 14.7% and 15.9%.

A notable absence from the reporting among Australia’s tech unicorns was SafetyCulture, which Startup Daily understands only began engaging with the WGEA in early 2023 and is no doubt busy pulling together its figures, since it’s all due by the end of May for the report this time next year.

WGEA will collect additional data in the next audit, including employee ages; primary workplace location; CEO and casual manager remuneration; and cases of sex-based harassment, harassment on the ground of sex or discrimination. A few execs might be checking their closets for skeletons right now.

Walking the talk

Now let’s go back to where we started, Atlassian.

The company was obviously keen to get on the front foot about its numbers, with global talent boss Avani Prabhakar posting a blog about the numbers ahead of the WGEA release.

“Our gender pay gap is not a result of equal pay issues,” she wrote.

“In FY23, we conducted our first global pay equity audit – comparing salaries and earnings across similar roles, levels, and locations (often referred to as an adjusted pay gap). We found that Atlassians doing like-for-like work are paid fairly and equitably, regardless of gender.”

Imma let you finish, Ms Prabhakar. Atlassian turned 20 last year. Yet it took two decades for a company that listed on the Nasdaq in 2015 to do that analysis? M’kay.

And we need to talk about this bit. Your company’s policies. It’s great that Atlassian has a policy on equal pay. Australian women workers were granted equal pay in 1969. The Conciliation and Arbitration Commission enshrined it in 1972 – long before the company’s billionaire cofounders were born.

So when Prabhakar says “we welcome efforts that encourage greater responsibility, ensuring that we’re all accountable for driving the change and progress we know needs to happen across our company and the tech industry”, why is there so much “no” in supplementary questions around accountability and transparency in the company’s responses to the WGEA?

The blog said you’re working on this stuff. Maybe that happened after a wake up for call in reporting to the WGEA where the Atlassian team said it doesn’t have policies around achieving gender pay equity, nor for transparent performance assessment processes, nor making managers accountable for pay equity outcomes, nor removing gender bias from remuneration reviews, nor transparency on pay scales and bands.

Atlassian did not respond to Startup Daily’s request for comment.

Atlassian’s responses on gender pay gap policies. Source: WGEA

Here’s a quick chart that tells a bit more of the story. It’s gender representation at pay quartiles. Want to make the big bucks at Atlassian as a woman? You have a one-in-five chance. Women make up 20% of the highest paid people at the software company. That figure doubles to 40% in the lowest quartile of pay – the highest representation of women in the team.

Atlassian’s gender composition by pay quartile. Source: WGEA

Play to pay

Which leads me to my final point and a theory.

When the split between blokes and women in your company is closer to 50/50 – ie the actual population – the pay gap seems to shrink.

Go and spend some time poking around the WGEA site, which offers a range of metrics around individual businesses to give a more complete picture. Click on the data explorer for individual companies. It’s good due diligence for anyone looking to work for one of these tech companies when it comes to issues beyond pay, like workforce composition, policies around parental leave and domestic violence, harassment and discrimination and board composition.

It even drills down into levels of employee and hiring and promoting on gender. This is where it gets interesting.

Two households, both alike in dignity, in fair workplace software, where we lay our scene.

How different can Atlassian and Culture Amp be in terms of the tools – aka people – they need to get the job done?

Is it that blokes are just naturally better, or more inclined, to want to work at one place over another? Is employee demand driving these differences or does it come from the employer?

Here’s the Atlassian data. We know the CEOs are 100% men, but look at the rest of the team.

With the exception of clerical and admin, which sits at a 51/49 gender split in favour of women, the rest of the company, at all tiers, ranges between two-thirds and three-quarters men.

Atlassian’s gender splits. Source: WGEA

Then check resignations, promotions and appointments at the bottom, because this is what you’d call in economics, a lead indicator.

This is where change happens.

Resignations don’t really matter because you’d expect the ratio to align with existing employment – although if more women were resigning it could be interpreted differently.

This is about who you promote and who you hire. Atlassian continues to do both at around a 2-1 ratio in favour of men.

Here are Culture Amp’s numbers.

Culture Amp’s gender splits. Source: WGEA

There’s a lot more yellow. Especially in key management, which is roughly two-thirds women. Head down to the rest of the exec team and GMs and it’s still 43% women (Atlassian: 25%), senior and other managers, 36% (Atlassian 29/32%). All occupations: 44% (Atlassian 31%).

One way to reduce the disparity is put women on executive floor, because then it seems to filter down: look at Culture Amp’s hiring – 50% women, and promotions at 49%.

Correlation or causation? Looking at the WGEA data across a range of companies, both tech and more broadly I’d suggest it’s not an accident when higher female participation in a workplace correlates with a smaller gender pay gap.

After decades of jobs for the boys, maybe careers for chicks is worth a crack.

For the middle ground, here are Canva’s numbers, were women are 38% of the overall workforce – remember Atlassian’s figure is 31%.

Canva’s gender splits. Source: WGEA

The exec and manager figures all sit above the 40% mark for women. At Canva they’re 41% of all managers. At Atlassian it’s 29%.

Finally, let’s have a quick squiz at Octopus Deploy, the software business with the second largest pay disparities in tech, at 31.5% on base salary and 31.8% with bonuses.

We’ll let you draw your own conclusions, noting that as a woman, you have a 1-in-10 chance of being a senior manager, even if 60% management below them are women.

Octopus Deploy’s gender splits. Source: WGEA

It seems that one way to reduce your gender pay gap is to remind yourself that the M in TEAM does not stand for men.