One of the less encouraging findings of our 2023 C-Suite Salary Report is that the gender pay gap persists among UK startups and scaleups.
For an ecosystem that likes to talk about championing diversity, disruption, and breaking the mould, it’s disappointing to see that gender parity remains more of an abstract goal than a reality. Likewise, we feel it’s insufficient for us to simply report the data, without at least trying to understand the nuances of the challenge and offer some solutions.
As with our previous salary report in 2021, we analysed our data in different ways to try and identify justifications for the pay gap. For example, perhaps our male survey respondents had more experience than their female counterparts? However, when we looked at average basic salary by the length of senior leadership experience, the disparity remained evident – with the most pronounced difference among those who had spent less than 2.5 years in a senior role.
This isn’t just an issue for external hires either. In fact, the gender pay gap is considerably more pronounced for founders than it is for non-founders. It is well documented that female-founded businesses receive less investment compared to their male counterparts - UK government figures show that tech firms founded by women secured only 15% of equity funding in 2022 - so lack of investment may well be a key factor.
It is perhaps no surprise, then, that a greater number of our female respondents said they didn’t consider themselves to be fairly compensated in their current role.
While the same proportion of both genders (39%) said they did feel fairly paid, only 29% of males felt their compensation wasn’t fair, compared to almost half of females. Women were more certain about their feelings too, with only 15% saying they were unsure, as opposed to 27% of men.
Of those females who didn’t feel fairly paid, more than a quarter felt their gender had had a direct and detrimental impact on their earnings.
Of course, that still leaves a majority of women who didn’t believe their gender had been a negative factor and, certainly, there are many reasons why people feel under-compensated – especially in earlier-stage companies and particularly in the turbulent economic environment of the past few years. Furthermore, as with all surveys, there are inherent limitations to our dataset and caution is advised in drawing any firm conclusions.
Still, whichever way we crunched the numbers, we found a gender imbalance – as was also the case in our 2019 and 2021 reports.
It’s not just about equal pay, but equal access to opportunities, too. Take a look at the chart below as it contains what we consider to be a crucial piece of the puzzle. We asked our respondents whether they would consider relocating for a role, to which 41% of females said no. And the men? Just 17.2% ruled out any kind of move.
This is important in the context of compensation because it means there are more limitations to the opportunities available to women, and less scope to progress their careers, build their experience, and pursue higher-paid roles.
Meeting the challenge
Gender pay disparity and equal representation is a complex, nuanced subject and it would be disingenuous to suggest there are simple solutions or quick fixes. That said, as a female-run business ourselves, it’s a topic Upscale Partners is passionate about and, hearteningly, we are often asked by our clients to help them build more diverse senior teams. So, in closing, we wanted to include some points of advice for startups and scaleups that are hiring:
Wherever possible, be prepared to offer flexibility in hours and/or location as this will open up the talent pool
Diverse hires often take longer to find, so make sure you allow that time by starting your hiring process sooner
If you’re working with a hiring partner, insist on seeing female/diverse candidates on the shortlist (we’re always happy to oblige 😉)
Take responsibility for levelling the playing field – don’t lowball a diverse hire if you would have paid more to someone else
Finally, whichever side of the negotiating table you’re sitting on, arm yourself with knowledge in the form of relevant salary benchmarks (on which note, click here to download our 2023 C-Suite Salary Report).