Tech’s gender gap: representation isn’t enough without equal pay
Tech’s gender gap: representation isn’t enough without equal pay
A new report published by Compete, in partnership with Power in Diversity, Viola Group and Meitar Law Offices, shows that Israel’s tech sector is still rife with gender disparity particularly in executive roles and seed stage companies with a persistent wage gap
Representation and equal pay for women in Israel’s tech sector is not quite as advanced as some may think, according to a recent report published by HR-tech company Compete for Women’s History Month. According to the report, women’s representation particularly as the hierarchical ladder ascends in Israeli tech is lower than many would think, as is their percentage of total earnings and in comparison to their male counterparts.
Compete partnered with Power In Diversity, the Viola Group and Meitar Law Offices to produce the report entitled “Gender Gaps in Israeli Tech” on the gaps in pay and representation between men and women in Israel’s tech sector. The report was produced using Compete’s real-time compensation and benefits platform and based on data collected from hundreds of Israeli tech companies which utilize Compete, including IronSource, Lightricks, Cato Network, Honeybook, Talon Security, Verbit, Lusha, WSC Sports and more.
“Despite progress in diversity and inclusion efforts, women in tech still encounter barriers to achieving pay equality with their male counterparts,” says the report.
According to the report, women account for 36% of the entire tech workforce but are significantly less represented the further along the company ladder. Women make up over half of jobs defined as “support,” such as administrative assistants, data entry clerks and customer service representatives at 54%; 38% of “professional” roles, such as engineers, accountants and people analytics; 31% of management roles including team leaders, supervisors and department managers; and only 25% of executive roles.
There is a notable pay gap across the board; at the professional level which accounts for the majority of high-tech workers the wage gap is 20%. Even at the support level, where women fill more than half of the positions, there is a 7% pay gap. Even in roles such as product design where women account for 65% of the roles or controllership where women account for 63% of the roles, there is a pay gap of 3%. There are two notable exceptions where the pay gap favors women - in data analysis with a 3% pay gap and security analysis with a 2% pay gap.
The distribution of wages is also skewed - women account for only 17% of earners in the highest percentile, but for 55% of earners in the lowest percentile.
“There are so many programs in Israel whose main goal and agenda is to help women get into tech either through coding or other programs. These are great for helping women to enter the industry, but it's not enough if there are still these gaps. If we’re still paying them less than men we’re not solving the problem,” says Yael Greenberger, Director of Marketing & Business Development at Compete.
Representation matters but it isn’t enough
The wage gap in tech like other industries is often linked to disproportionate representation of women in leadership and senior management roles. According to Compete’s report, women are significantly less likely to be promoted to management roles than their male counterparts across all tech sectors. Even in the HR tech sector, the single field that boasts equal gender representation, only 1 in 4.8 women is a manager, compared to 1 in 2.45 men. In other words, men are nearly twice as likely as women to be managers and this is in a sector where women are equal in number.
“The number of women in tech overall isn’t the only thing that’s important; far more important are women in senior roles and in R&D,” says Noa Gadot, CEO of Power in Diversity, which partnered with Compete on the report. “If senior levels have a pay gap, how can you expect the rest of the organization to be balanced?”
Evidently, while representation matters, it clearly is not enough to tilt the balance. Efforts that have been focused on simply getting women into entry-level positions in tech may need to shift to helping women advance to senior and executive roles, and becoming founders themselves.
“While we have made progress in ensuring men and women are paid equally, we still have a ways to go. The gender pay gap is as much about the amount one gets paid as it is about the way investors and boards look at and value female employees and executives,” says Jeff Shaprio, Partner at Viola, another partner on the report. “Unconscious bias exists, especially in determining compensation.”
In terms of department teams, women are most represented in HR at 94%, G&A at 91%, and Finance at 70%. They are most poorly represented in more technology-oriented departments including Cyber and Security at 22%, IT at 17% and System Ops at 14%.
The disparity in representation and pay is especially noticeable in deep tech sectors. Women only account for 28% of roles in hardware and robotics, 31% of roles in cyber, and 35% in AI and ML. “Women encounter barriers when attempting to enter deep tech sectors, leading to lower achievement of higher salary percentiles,” says the report. This is in part due to the fact that less women have historically pursued higher education in STEM-related fields, though this has been changing.
The report also broke down disparities based on geography. In Jerusalem, women have the highest representation with 42% of tech roles compared to 36% in the Center, 34% in the North, and 31% in the South. However, the pay gap in Jerusalem remains as high as the Center at 22%, and higher than in the Northern or Southern regions. And, most of these roles occupied by women are low-level or entry-based, with 63% of earners in the lowest percentile in Jerusalem being women.
No women at the seed stage
Perhaps one of the most important conclusions of the report is the lack of female representation in seed stage companies, where women make up only 22% of roles. This stage also possesses the largest pay gap at 26% and women account for only 9% of the highest earners. This means that there are very few women who hold key positions in the establishment of tech companies, and the ones who do so earn a fraction of their male counterparts wages. Women are best represented at the Round B & C stage companies at 33% and the lowest pay gap is at the Round D level with 19%, still a substantial amount.
“Women don’t really take part in the very strategic foundations of seed companies that will one day become companies,” says Greenberger, adding that this inevitably has implications for the larger company.
According to the report, “the low ratio of women and salaries in seed stage funding may deter women from working in these companies. This lack of female representation in pivotal roles where foundations are laid and strategies are set is a red flag.”
This is in part due to the traditional route through which most startups are founded in Israel - by graduates of military intelligence units where a pivotal network is founded. Despite progress in recent decades, the vaunted intelligence units remain highly male-dominated so it is unsurprising that the main pool from which Israeli tech founders spring will be similarly homogenous.
In Israel, where companies with over 518 employees are obligated to report internal gender pay, Gadot says that beyond being the ethically correct course of action, closing the gap is simply good business sense. “Women earning less than their counterparts are likely to experience less motivation, invest less over time, and ultimately spend less time in the company. Moreover, the issue could impact your reputation. Do the wise thing, ask yourselves the tough questions: Why does the problem exist, and how can it be best resolved?” says Gadot.
“Closing gender pay gaps is not just about fairness or compliance,” echoes Simcha Koevary, Corporate Partner at Meitar Law Offices, another partner of the report. “Companies that prioritize equal pay not only attract diverse talent but also enhance their reputation and long-term success, as gender equality is both a strategic advantage and a moral imperative.”
Today especially, there is little excuse anymore for Israeli tech companies, to avoid addressing these issues, says Greenberger. “It should be a policy in every company not to have any pay gaps, and just like they use data to deal with security and compliance, they should also use it for gender pay gaps. If a company with 10 employees has the tools to make sure that they’re complying with security they should also be able to do that regarding gender pay.”
