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The Rise of The Gender Pay Gap in UK Start-Ups

Recent data has shown that tech companies still have a long way to go until they reach gender pay equality, especially in start-ups and scale-ups. In this blog, we decided to discuss some of the things that companies can do in order to help close the gap!

The gender pay gap in UK start-ups and scale-ups is 25%, which is way above the national average of 15%. In the past, it wasn't uncommon that men and women would be paid different salaries despite being in the same role. Now the gender pay gap is driven by two main factors.

Not enough women in leadership positions:

One of the main factors that's causing this issue in seniority levels is that men tend to be in more senior positions than women. In a salary and benchmarking dataset that's been provided by Payspective, it shows that across UK start-ups and scale-ups, gender distribution across all employees is at 48% women in comparison to 52% men. However, when looking at gender distribution in leadership positions (Directors and C-level), the representation of women typically drops down to 33%.

When looking at Founders and C-level roles, the representation of women continues to drop down further to 19%. A key driver for this is that C-level positions in start-ups are typically taken up by the founding team, and 80% of start-ups in the UK are founded by majority men.

A more positive trend in the start-up space that's currently unfolding is that the number of female founders is starting to rise, which has since doubled across the last decade. Although the figures still aren't as high - back in 2018, 21% of funded UK start-ups had female founders, when this figure was only at 11% in 2011.

Not enough women in tech roles:

Another factor of the gender pay gap is a skew in terms of role by function that both men and women work in, with men frequently holding the highly paid technical roles such as engineering, data sciences and software development.

This holds even more weight in the start-up economy globally than just the UK market, simply because start-ups tend to have a much higher proportion of technical roles than traditional businesses, therefor the gender skew within these roles has a bigger impact on the gender pay gap.

What you can do to help bridge the gender pay gap.

Create Transparency - Companies in the UK with less than 250 employees aren't required to report their gender pay gap, however, internal transparency around gender and pay in your business could be a positive step to take. It's essential that you understand how your business pay gap compares to companies that are similar and what the driver of this gap is.

Adopting transparency can also help you in your recruitment process - whether this is including a salary range or other perks, it isn't just good practice to include in a job advertisement, but it can also increase the number of applications to expect.

Support Progression - It's extremely important to ensure that your culture and processes support women being hired or progressed into higher roles. For example, if you think about whether a senior role that you're hiring for could be flexible in the sense that the employee can work from home or various hours to help ensure that work commitments can be combined with other duties - this will allow candidates from a wider background to apply and be considered.

Consciously Hire More Women into Tech - Hiring women into tech roles is a challenge that many companies struggle with - it's especially important for the tech-dominated start-ups and scale-ups to consider. But what can you actually do?

Make a conscious effort to recruit female tech talent. A great way to network with women in tech is attending women in tech events or focus on diversity and inclusivity in your content and recruitment pages, highlight success stories of women in tech roles within your organisation. The effort you put into hiring women into tech roles will pay off in the long run - hiring your 10th woman into a 20 person developer team will prove to be a lot easier than hiring your 1st into a 20 person team.

Appoint A Diversity Manager - Diversity managers help monitor the recruitment process and reduce biased decision making whilst they review recruitment choices. When diversity managers occupy a senior position in a company, it provides trust with employees, knowing that the organisation is pro-actively trying to reduce the gender balance.

Diversity managers will usually have access to all the internal data, which will help to identify biased recruitment patterns. Their role will enable them to question business practice and request more information on how these decisions were made.

They can also ensure that diversity strategies are in place and followed correctly.

Preparation - A final point you can consider is that you need to make sure there are no structural or cultural issues with any pay differences in your company. Typically, men feel more comfortable asking for a pay rise than women, so make sure that you have a process around salary reviews and pay rises in place for everyone, not just the ones who ask.

It has been said that men also tend to apply for a role, even if they're not the perfect fit with the requirements, whereas women will typically only send off the application if they're sure the job is a great fit for them. While a man who is after a part-time job may apply to a full-time position and negotiate it down, a woman would be less likely to do so. If there's potential for a role to be part-time, make sure to include it on the job spec.

At Talented Recruitment Group, we couldn't agree more with inclusivity within the workplace. As a Recruitment Group that works specifically in the IT & Tech industry, alongside FMCG, we have a great part to play in making a difference and we believe it's extremely important to take gender equality into account during the entire process of Recruitment.

We hope to see a positive difference with women in the Tech Industry and we hope to make a difference over the next few years.

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