June 8, 2018 • 24 mins
The pay gap goes way deeper than just men's and women's salaries—that's why just paying women more doesn't solve the problem. In this episode, Claire Suddath talks to Salesforce.com Inc., the San Francisco software company that began doing pay equity audits in 2015 and has found a pay gap every single year. Host Rebecca Greenfield looks at another software company, Fog Creek Software, Inc., and how radical pay transparency is helping equalize salaries. And Ellen Huet reports on Adobe Systems Inc., which says it's closed its pay gap but is still trying to tackle inequities around parental leave that can hold some women back.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
M M. I have a question for you, Claire. If
a company knows it has a pay gap and it
wants to fix it, why not just pay women more.
I mean, it makes sense to me, but it's not
actually that easy. In the short term, it works, but
(00:21):
as a permanent solution not really. Take Salesforce, for example,
the big San Francisco software company. They tried it and
they're still working on it. The process started in two
thousand fifteen when they decided to do an audit to
find out if they even had a pay gap that
first year. They kept it pretty simple. They looked only
(00:43):
at base salaries people with the same job type, broken
down by gender. They found that six percent of Salesforce's
employees were being underpaid for no apparent reason. It wasn't
because they were working fewer hours or didn't have a
lot of experience. They working pairing software developers to software developers,
receptionists to receptionists. So did they then pay those people
(01:07):
more money? Yep, Salesforce spent three million dollars that first
year bumping people up. Granted, its revenue that year was
six point seven billion, but still that's a lot of money.
And not just women got races. There were some men
who were being underpaid too, So then everything was fixed. Yep,
the end. No, actually it was the exact opposite. When
(01:32):
they did the audit again the following year, they added
race to the equation, factored in bonuses in addition to
base pay, and found another eleven percent of people who
are underpaid. Fixing that cost the company another three million dollars.
Here's Cindy Robbins, the head of HR at Salesforce. That
second year was also a big learning for us because
(01:53):
it was a year that we had just finished acquiring
some of our biggest acquisitions, four team companies that we
acquire the previous year. So when you acquire fourteen companies,
you acquire also their pay practices. So they keep bumping
up people's salaries. But are they doing anything to keep
the paygap from coming back again and again? Yeah, they are.
(02:16):
They figured out that those eleven percent of people, a
lot of them were new to the company and had
basically arrived at Salesforce already underpaid, and Salesforce had been
naively basing their salaries off their old ones. Are recruiting
organization is no longer asking the question what is your
current compensation. Now it's what is a compensation you expect,
(02:38):
which is making candidates pause and think about it, And
we're not forcing them to answer it on the spot.
They may need some time to do their own level
of research and come back to us. Yeah, but asking
someone what they think they should make still puts the
burden on them to say what they deserve exactly. And
if you're underpaid but don't know it, you might low
(03:00):
all your own offer. So it's not a perfect solution. No,
And when they did the analysis again this year, Salesforce
found another six percent gap, costing another two point seven
million dollars. Part of the problem is that there's so
many factors that go into creating the pay gap, Plus
Cindy keeps thinking of new factors to add to her analysis.
(03:21):
I never thought to myself, oh, should I look at
how we distribute merit? Oh should I look at how
we distribute promotions at the beginning of the year, by gender,
by pay practices. It sounds like Salesforce is trying and
has made some strides, but it hasn't fixed the pay gap. No,
and the company doesn't expect to fix it as then
(03:42):
eliminate the entire issue. Anytime soon. The pay gap is
just a numerical reflection of the way or society and
economy are set up. No matter what size your company is,
you're probably going to encounter at least some of the
factors that lead to the pay gap. That's something Cindy
says has been hard for people to understand. You know,
do we still want to be fixing six percent of
the population. No, But you know, it's an audit and
(04:07):
data is being inputed, Assumptions sometimes are being made. I
think you're always going to have to do the audit
every single year, and that they're always there's always going
to be some level of room for error, and that's
the error you want to identify and you want to fix.
But our systems perfect to ensure that we are paying
everyone equally, not yet, and that's what we're working on.
(04:35):
When you look at the world, you know what the
population like, Where is our place like? Where is our value?
Women deserve equal for equal work and nation one, the
median salary for men is greater than women in nine
point six percent of major occupations women do they want.
(04:56):
We want to end gender inequality, and to do this
we need everyone involved. It's a concept called information a symmetry.
If you don't know what the going rate is for
your salary, it's easier for the company to rip you off.
Girl Power equalization between the sexy. I ask no favor
for my sex. All I ask of our reden is
(05:17):
that they take their feet or fur lex. Welcome back
to the paycheck. I'm Rebecca Greenfield. Salesforces struggle brings up
an important point about fixing the pay gap. One company
paying women more money is like taking advil for a
broken bone. The pain is going to come back until
(05:41):
the bone heals. That's why Salesforce has to do it's
pay audits year after year. It doesn't exist in a vacuum,
and it also only addresses one facet of the pay gap,
not the issue of the highest paying jobs generally being
held by men. But there are solutions to the pay
gap that attempt to heal the bone. Take how Salesforce
(06:04):
no longer asks new hires what they made at their
previous jobs. Women tend to start out at lower salaries
than men, so basing salaries on what people were paid
before only perpetuates that inequality. They're about a dozen places,
including Massachusetts, California, and New York City, where asking about
a job applicants previous salary is illegal. But the solution
(06:29):
isn't perfect. Like I talked about with Player, women can
still end up making less than men for other reasons.
They might low ball their offers, they might be perceived
as too aggressive during a negotiation. They might still not
ask for enough money. But there's more than one way
to treat paid disparities at a deeper level, like total
(06:50):
salary transparency. If everyone knew how much everyone else was making,
then it would be tough for employers to get away
with paying certain people less for no reason. And if
you know what you could be making, you're more likely
to ask for what you deserve. Total pay transparency is
kind of extreme. People generally don't like talking about money,
(07:14):
and right now employers take advantage of that. It allows
them to keep a chunk of salaries below market rate,
and that saves the money. One person who refuses to
buy into that social taboo is Jen Schiffer. She's a
software engineer in New York, and she talks about her
salary about as freely as other New Yorkers talk about
real estate prices. But I've always been super like transparent
(07:39):
with people who asked me to be with my salary,
which kind of got me in trouble of my last
job without like Trump, troubles of fake idea. But I
did have coworkers who are upset at how much I
was talking about and trying to talk about. Luckily, Jen
now works at fog Creek, a small software company that
last to your instituted a policy known as radical pay transparency,
(08:04):
everyone within a company knowing what everyone else is making
more or less. I decided to investigate, you know, for
me at a personal level, it was about treating workers right.
That's a Neil dash the CEO of fog Creek. He
took over the company in December. He came with a
(08:27):
mission to make fog Creek and tech in general more
fair to people, regardless of gender or race. You know,
I grew up in a household with you know, my
mom being in the union her whole life, and and
you know, understanding the importance of respecting workers. I don't
think it's any secreted women and other underrepresented groups in
tech that end up trying to negotiate their way to
(08:51):
face fair salaries may or may not get there and
really sort of ending up behind right when they start,
and that permanently impacts the trajectory of your whole things
over your lifetime. The company only has about three dozen employees,
but still that's no guarantee people were being paid fairly. Transparency,
in theory, would not only reveal any pain equalities that
(09:14):
had cropped up in the twenty years fog Creek existed
before and Neil got there, it would also help ensure
that things stayed equal over the long term by holding
the company accountable. Here's Jessica Moy, the head of culture,
which is like hr at fog Creek. I was a
little nervous that going from you know, not transparency to
transparency it was going to kind of like create adverse
(09:35):
reactions for certain people because I just didn't know. I mean,
people reactively differently to sharing financial information and people's level
of comfortability. It's very different. Like I said, people don't
like talking about money, people who make too much money
don't want to feel guilty about it, and people not
making enough don't want to feel like dupes. That's why
(09:58):
fog Creek decided to take transparency slow, and Neil sent
out a survey asking people what kind of salary information
they'd be okay with sharing. He found out not everyone
was as enthusiastic about pay transparency as he was. There
were some people that were just sort of like, I
don't know how I feel about this. I've never encountered
this question before. I don't know what the implications are
(10:19):
about talking about my pay and and and in some
cases really going deep into it with some of our
team members, and they were like, you know, my family
has never talked about pay, and I'm you know, I'm
worried about like open salary transparency because like my brother
and I don't know what each other makes, and like
I don't want that to be awkward at Thanksgiving. Even
gen Scheffer, who talked a big game about salary transparency,
had some anxiety. I'm like, are there other engineers here
(10:42):
comparing themselves to me? And if they find out I'm
making like more than them, will they feel slight? And
if I'm making less than them, will they feel like
that's fair? Like I I don't know, Like I don't know.
I'm the I'm the only woman on my team, and
so there's not many women engineers at the company. I
(11:03):
am always very insecure about whether guys I work with
or alongside, would think that I am as valuable as
a company says I am. Still not a single person
said they preferred the status quo. The company wanted more
pay transparency. The next step before telling anybody anything about
(11:24):
what their colleagues were making was to do an internal
audit of compensation at fog Creek, and we found that
we had inequities. I mean, I think any any company
that's been around for more than five minutes is going
to if they're being honest. And Neil used the data
to help and figure out what constituted fair pay. In
the first place. He looked at what people on each
(11:45):
team we're making, and then he compared that information for
similar positions that he found on sites like pay scale.
Using all of that, he decided on a range that
made sense for each job title. I was curious to
know if, as expected, women had ended up making less
than men. Yeah. I think the majority of people that
were at the high end of the range or men
(12:07):
for sure, But I think the people that weren't the
low end of the range two were also men. So like,
it's probably reflecting more the fact that we don't have
as good a gender balance as you should to men
are over indexed on both the high end low end
of the spectrum. He raised the salaries of two people
he found out weren't making enough money even before making
all the pay data public, But there were also some
(12:28):
people he found who were making too much money. Those
people got to stay where they were rather than go
for truly radical pay transparency. Bog Creek decided to share
just those salary ranges with no names attached, just job titles,
and Neil wouldn't tell me what those were exactly, But
finally last September he was ready to share them with
(12:50):
the rest of the company. At one of their monthly
town hall meetings, he gathered everyone together. Some people were
actually in the office but others were remote, and he
put all the data up on the screen and there
wasn't a mutiny, but not everyone was happy. You know,
some stuff we screwed up, Like we have some departments
as a small company that are one person, so we
(13:13):
listed a salary range for the role of the only
person in that department and they're like, okay, well, my
salary is basically out there like everybody else is in
a team, and it's a range. But they're like, if
if this is the only person in this role, everybody
knows exactly what I make to within a five thousand
dollar band. Jessica moy was one of the people who
didn't have anonymity. I'm the only person in my position,
(13:35):
so it's pretty clear, like my this is Jessica's Valerie band,
and everyone knows that's my job. And I never had
any issue with that, So for me, it wasn't like
a thing to process. I was like, this is what
I make. Even though Jessica didn't mind that everyone knew
her salary, you can see why some people might. Jun
(13:56):
Scheffer was also in a range of her own, but
she had a different problem him. I think it was like,
some of these ranges are pretty wide, but I would
feel more comfortable of bringing in other underrepresented people into
the company once I know it's like completely fair and
Neil knows he has more work to do. To Jen's point,
after the town hall, fog Creek decided to put salary
(14:17):
ranges on all of its job postings so that people
know they're getting hired on a level playing field. You
can't build trust just by saying trust me and not
showing anybody the work, especially in in tech, whereas so
many people have come from other companies that weren't treating
them right there weren't weren't you know, being fair to them, UM,
and so transparency is just the foundation upon which you
(14:39):
build a relationship between an employer and a worker that
is trusting. And you know, we try to do that
and everything we do. Given how much anil believes in
pay transparency, I asked him how transparent he planned to
be with his own salary. It was absurd because I said,
this is the range that I make the bottom of it.
(14:59):
So I like, UM, made a structure for any future CEO.
I guess, but I was. I just sort of disclosed
my personal salary because I was like, I don't I
want to model the thing I want people to feel
comfortable doing. Up to now, we've just been trying to
solve the pay gap by looking at the numbers. But
(15:21):
there are all kinds of things that happen at the
office and at different points in women's careers that make
a big difference over time in the amount of money
they make. And the biggest thing of all is motherhood.
Nothing trash is your earning potential, like having a kid.
Men and women start their careers making about the same
amount of money, But the pay gap really starts to
(15:42):
show up when men and women hit their late twenties.
That is, when employers think women are about to have kids.
One study found that the bulk of the pay gap
happens between ages twenty six and thirty three for college
educated women. And this isn't just because women cut back
their hours to pick up slack at home. Mothers make
proportionately less than men based on ours worked, research has found.
(16:06):
So what if we could do something about that, make
sure women could have kids and keep earning as much
money as their male colleagues. Adobe, the San Jose based
company that makes design software and also the flash plug
in you used to watch videos on the internet, last
year announced that they closed their gender pay gap one
percent in the US. That's for men and women doing
(16:28):
the same jobs, But that still doesn't mean the working
environment was perfectly equal, especially for women and men who
have kids. My colleague Ellen Hewitt explains, Caitlin Azzie works
at Adobe as a recruiter, but right now she's on
maternity leave. So Dylan was born on New Year's Eve,
so she squeaked in there. We got the tax right
(16:49):
off and everything. So and she was ten pounds six ounces,
huge baby. Yeah, we have big babies in our family.
Both men and women at Adobe get sixteen weeks of
paid paternal or maternal leave, regardless of whether they're the
primary caregiver. Birth Mothers get an additional ten weeks of
medical leave. That's compared to less than six weeks at
(17:12):
the average private company in the US that offers paid
leave for a new child, so already they're doing pretty well.
On top of that, the company gives employees the option
to take a more flexible work schedule, like when they
come back from leave. They call it Adobe Flex Time.
This is Ellen Ellen. I met with Caitlin along with
(17:40):
Rosemary Arianta Keiper, who oversees the flex Time program. Here's Caitlin.
I'm learning with me in a new mom It's like
you can plan for the you know, every single thing,
but nothing really goes to plan. So just having it
be you know, maybe I need to work from home
a couple of times a month, or you know, three
times in this one week, or just having that to
me is really really I can see be very helpful
(18:03):
when I return back to work, coming back to work
after having a child can be really hard, no matter
how much time you got from eternity leave, you're just
starting to figure out what being a mom is like,
or how to juggle caring for the kids you already
have plus the infant you just brought home. Without the
flexibility to ease back into full time work, some women
(18:24):
might decide to downshift to part time, which drastically limits
their earning potential. That usually involves a job switch, and
if going back to your old job with a new
baby is difficult, finding a new job is much much harder,
especially when you factor in the cost of daycare. In
the US, lots of women decide that it's just too
much and stay home for good. When Caitlin comes back
(18:47):
to work this month, she plans to take a day
each week to work from home so she can spend
the afternoons with her daughter. Adobe has offered the flex
time option for years, but it was only in the
last year that they started promote doing it internally and
training managers how to talk to their employees about it.
For Caitlin, that was a hugely important change. She was
(19:08):
already nearing her due date by the time she found
out the option existed. I think, um, before they rolled
out this program and the framework was more standardized, I
don't necessarily think people first knew that this was an option.
I think it gives people, at least me, a little
bit more of empowerment to think about what I need first.
Before they rolled it out, I just assumed I'd come
(19:30):
back full time and you know, you would be a
hard couple of weeks and then you just get thrown
back in and that's that. And um, that was sort
of my assumption. And so I just don't think people
want to ask for for more unless they, you know,
unless it's something that they can say, hey, it's a
point to a policy or point to something that's more normalized,
because I think there is a you know, there is
(19:51):
always pressure to be here if you can and things
like that. Rosemary knows that pressure well. As the vice
president of Global Rewards for a OBI. She knew that
even though the option for a flexible schedule was out there,
a lot of people who might benefit from it weren't
taking it. Yeah, I think there was the sentiment of
(20:11):
not realizing that they could take it. It does seem
to give permission and lend itself to the ability to
be able to say, look, this is documented somewhere, it's
kind of a formal policy. They're promoted. So it does
seem to give more permission to individuals to feel like
they can ask for it. You know, oftentimes the type
of relationship you have with a manager and kind of
the value system or or what they believe is important
(20:33):
dictates oftentimes how much they're willing to provide flexibility. And
what we realized was in some organizations it happened seamlessly,
it wasn't an issue, and in others, um managers weren't
as willing um to do it because they felt like
they had demands or or weren't sure how they could
um manage the program equitably across the organization. Since making
(20:57):
Adobe flex time more of a formal policy less September,
Adobe has seen a ten increase in the number of
people choosing it. Rosemary says that the more normal a
flexible work schedule seems, the less likely it is that
people who take advantage of it will be implicitly penalized
for doing so. Because here's what's worrisome right now. Even
(21:19):
though both parental leave and flex time are offered to
men and women, men are still taking way less time off.
What we're seeing is is most men, on average are
taking closer to one month. And the feedback that we've
got is is is because you know I've got we
don't both need to be at home. Is essentially the
response that we've gotten, even though they both have the
(21:40):
ability to be at home. The point of encouraging men
to use programs like parental leave and flex time isn't
just so that women have some help at home, although
it's that too. The point is so that women and
men share the burden of childcare more equally, including the
workplace penalties that come with it. When you miss a
may your career opportunity because you're at home taking care
(22:03):
of the kids. That can be frustrating. But right now,
women still do twice as much of the childcare in
the US. That means that those missed opportunities are falling
disproportionately on them. I'd love to see more men start
taking the time off right and taking advantage of these programs,
because I think that act in itself will also kind
(22:24):
of level the paying field. Two parents each with the
flexibility to balance work and home life. It does sound
pretty idyllic, It's also good for women's earnings. A study
in Sweden found that for each month of paternity leave
(22:45):
the father takes, the mother's income rises by an average
of seven percent. But in the US, at least, we're
a long way from that kind of thing being normal.
Only of private sector workers get any paid for rental
leave at all. Changing the way we deal with women
and men and work isn't something that happens all at once.
(23:09):
Paid discrimination has been illegal since the sixties, but that
hasn't stopped companies from paying women less over the years.
That's because sexism is a way bigger problem than the
pay gap. No one company is going to solve sexism
for everyone, but Rosemary is right. The more places where
gender equality is the norm, the harder it is for
(23:31):
everyone else to keep treating men and women differently. Next
week on The Paycheck, we're going to talk about how
individual women are trying to solve the pay gap for themselves.
Some are even resorting to motivational chanting. You are not
(23:58):
going to want to miss it. Thanks for listening to
another episode of The Paycheck. If you like the show,
please head on over to Apple Podcasts or wherever you
listen to rate, review, and subscribe. This show was reported
by Ellen Hewitt Claire Subteth and hosted and reported by
me Rebecca Greenfield. It was edited by Jillian Goodman and
produced by Liz Smith. We also had help from Francesca Levie,
(24:21):
Janet Paskin, and Magne Henrickson. Our original music is by
Leo Sidron, carry Vanderyott did the illustrations on our show page,
which you can find at bloomberg dot com Slash the Paycheck.
Francesca Levie is Bloomberg's head of Podcasts
M M. I have a question for you, Claire. If
a company knows it has a pay gap and it
wants to fix it, why not just pay women more.
I mean, it makes sense to me, but it's not
actually that easy. In the short term, it works, but
(00:21):
as a permanent solution not really. Take Salesforce, for example,
the big San Francisco software company. They tried it and
they're still working on it. The process started in two
thousand fifteen when they decided to do an audit to
find out if they even had a pay gap that
first year. They kept it pretty simple. They looked only
(00:43):
at base salaries people with the same job type, broken
down by gender. They found that six percent of Salesforce's
employees were being underpaid for no apparent reason. It wasn't
because they were working fewer hours or didn't have a
lot of experience. They working pairing software developers to software developers,
receptionists to receptionists. So did they then pay those people
(01:07):
more money? Yep, Salesforce spent three million dollars that first
year bumping people up. Granted, its revenue that year was
six point seven billion, but still that's a lot of money.
And not just women got races. There were some men
who were being underpaid too, So then everything was fixed. Yep,
the end. No, actually it was the exact opposite. When
(01:32):
they did the audit again the following year, they added
race to the equation, factored in bonuses in addition to
base pay, and found another eleven percent of people who
are underpaid. Fixing that cost the company another three million dollars.
Here's Cindy Robbins, the head of HR at Salesforce. That
second year was also a big learning for us because
(01:53):
it was a year that we had just finished acquiring
some of our biggest acquisitions, four team companies that we
acquire the previous year. So when you acquire fourteen companies,
you acquire also their pay practices. So they keep bumping
up people's salaries. But are they doing anything to keep
the paygap from coming back again and again? Yeah, they are.
(02:16):
They figured out that those eleven percent of people, a
lot of them were new to the company and had
basically arrived at Salesforce already underpaid, and Salesforce had been
naively basing their salaries off their old ones. Are recruiting
organization is no longer asking the question what is your
current compensation. Now it's what is a compensation you expect,
(02:38):
which is making candidates pause and think about it, And
we're not forcing them to answer it on the spot.
They may need some time to do their own level
of research and come back to us. Yeah, but asking
someone what they think they should make still puts the
burden on them to say what they deserve exactly. And
if you're underpaid but don't know it, you might low
(03:00):
all your own offer. So it's not a perfect solution. No,
And when they did the analysis again this year, Salesforce
found another six percent gap, costing another two point seven
million dollars. Part of the problem is that there's so
many factors that go into creating the pay gap, Plus
Cindy keeps thinking of new factors to add to her analysis.
(03:21):
I never thought to myself, oh, should I look at
how we distribute merit? Oh should I look at how
we distribute promotions at the beginning of the year, by gender,
by pay practices. It sounds like Salesforce is trying and
has made some strides, but it hasn't fixed the pay gap. No,
and the company doesn't expect to fix it as then
(03:42):
eliminate the entire issue. Anytime soon. The pay gap is
just a numerical reflection of the way or society and
economy are set up. No matter what size your company is,
you're probably going to encounter at least some of the
factors that lead to the pay gap. That's something Cindy
says has been hard for people to understand. You know,
do we still want to be fixing six percent of
the population. No, But you know, it's an audit and
(04:07):
data is being inputed, Assumptions sometimes are being made. I
think you're always going to have to do the audit
every single year, and that they're always there's always going
to be some level of room for error, and that's
the error you want to identify and you want to fix.
But our systems perfect to ensure that we are paying
everyone equally, not yet, and that's what we're working on.
(04:35):
When you look at the world, you know what the
population like, Where is our place like? Where is our value?
Women deserve equal for equal work and nation one, the
median salary for men is greater than women in nine
point six percent of major occupations women do they want.
(04:56):
We want to end gender inequality, and to do this
we need everyone involved. It's a concept called information a symmetry.
If you don't know what the going rate is for
your salary, it's easier for the company to rip you off.
Girl Power equalization between the sexy. I ask no favor
for my sex. All I ask of our reden is
(05:17):
that they take their feet or fur lex. Welcome back
to the paycheck. I'm Rebecca Greenfield. Salesforces struggle brings up
an important point about fixing the pay gap. One company
paying women more money is like taking advil for a
broken bone. The pain is going to come back until
(05:41):
the bone heals. That's why Salesforce has to do it's
pay audits year after year. It doesn't exist in a vacuum,
and it also only addresses one facet of the pay gap,
not the issue of the highest paying jobs generally being
held by men. But there are solutions to the pay
gap that attempt to heal the bone. Take how Salesforce
(06:04):
no longer asks new hires what they made at their
previous jobs. Women tend to start out at lower salaries
than men, so basing salaries on what people were paid
before only perpetuates that inequality. They're about a dozen places,
including Massachusetts, California, and New York City, where asking about
a job applicants previous salary is illegal. But the solution
(06:29):
isn't perfect. Like I talked about with Player, women can
still end up making less than men for other reasons.
They might low ball their offers, they might be perceived
as too aggressive during a negotiation. They might still not
ask for enough money. But there's more than one way
to treat paid disparities at a deeper level, like total
(06:50):
salary transparency. If everyone knew how much everyone else was making,
then it would be tough for employers to get away
with paying certain people less for no reason. And if
you know what you could be making, you're more likely
to ask for what you deserve. Total pay transparency is
kind of extreme. People generally don't like talking about money,
(07:14):
and right now employers take advantage of that. It allows
them to keep a chunk of salaries below market rate,
and that saves the money. One person who refuses to
buy into that social taboo is Jen Schiffer. She's a
software engineer in New York, and she talks about her
salary about as freely as other New Yorkers talk about
real estate prices. But I've always been super like transparent
(07:39):
with people who asked me to be with my salary,
which kind of got me in trouble of my last
job without like Trump, troubles of fake idea. But I
did have coworkers who are upset at how much I
was talking about and trying to talk about. Luckily, Jen
now works at fog Creek, a small software company that
last to your instituted a policy known as radical pay transparency,
(08:04):
everyone within a company knowing what everyone else is making
more or less. I decided to investigate, you know, for
me at a personal level, it was about treating workers right.
That's a Neil dash the CEO of fog Creek. He
took over the company in December. He came with a
(08:27):
mission to make fog Creek and tech in general more
fair to people, regardless of gender or race. You know,
I grew up in a household with you know, my
mom being in the union her whole life, and and
you know, understanding the importance of respecting workers. I don't
think it's any secreted women and other underrepresented groups in
tech that end up trying to negotiate their way to
(08:51):
face fair salaries may or may not get there and
really sort of ending up behind right when they start,
and that permanently impacts the trajectory of your whole things
over your lifetime. The company only has about three dozen employees,
but still that's no guarantee people were being paid fairly. Transparency,
in theory, would not only reveal any pain equalities that
(09:14):
had cropped up in the twenty years fog Creek existed
before and Neil got there, it would also help ensure
that things stayed equal over the long term by holding
the company accountable. Here's Jessica Moy, the head of culture,
which is like hr at fog Creek. I was a
little nervous that going from you know, not transparency to
transparency it was going to kind of like create adverse
(09:35):
reactions for certain people because I just didn't know. I mean,
people reactively differently to sharing financial information and people's level
of comfortability. It's very different. Like I said, people don't
like talking about money, people who make too much money
don't want to feel guilty about it, and people not
making enough don't want to feel like dupes. That's why
(09:58):
fog Creek decided to take transparency slow, and Neil sent
out a survey asking people what kind of salary information
they'd be okay with sharing. He found out not everyone
was as enthusiastic about pay transparency as he was. There
were some people that were just sort of like, I
don't know how I feel about this. I've never encountered
this question before. I don't know what the implications are
(10:19):
about talking about my pay and and and in some
cases really going deep into it with some of our
team members, and they were like, you know, my family
has never talked about pay, and I'm you know, I'm
worried about like open salary transparency because like my brother
and I don't know what each other makes, and like
I don't want that to be awkward at Thanksgiving. Even
gen Scheffer, who talked a big game about salary transparency,
had some anxiety. I'm like, are there other engineers here
(10:42):
comparing themselves to me? And if they find out I'm
making like more than them, will they feel slight? And
if I'm making less than them, will they feel like
that's fair? Like I I don't know, Like I don't know.
I'm the I'm the only woman on my team, and
so there's not many women engineers at the company. I
(11:03):
am always very insecure about whether guys I work with
or alongside, would think that I am as valuable as
a company says I am. Still not a single person
said they preferred the status quo. The company wanted more
pay transparency. The next step before telling anybody anything about
(11:24):
what their colleagues were making was to do an internal
audit of compensation at fog Creek, and we found that
we had inequities. I mean, I think any any company
that's been around for more than five minutes is going
to if they're being honest. And Neil used the data
to help and figure out what constituted fair pay. In
the first place. He looked at what people on each
(11:45):
team we're making, and then he compared that information for
similar positions that he found on sites like pay scale.
Using all of that, he decided on a range that
made sense for each job title. I was curious to
know if, as expected, women had ended up making less
than men. Yeah. I think the majority of people that
were at the high end of the range or men
(12:07):
for sure, But I think the people that weren't the
low end of the range two were also men. So like,
it's probably reflecting more the fact that we don't have
as good a gender balance as you should to men
are over indexed on both the high end low end
of the spectrum. He raised the salaries of two people
he found out weren't making enough money even before making
all the pay data public, But there were also some
(12:28):
people he found who were making too much money. Those
people got to stay where they were rather than go
for truly radical pay transparency. Bog Creek decided to share
just those salary ranges with no names attached, just job titles,
and Neil wouldn't tell me what those were exactly, But
finally last September he was ready to share them with
(12:50):
the rest of the company. At one of their monthly
town hall meetings, he gathered everyone together. Some people were
actually in the office but others were remote, and he
put all the data up on the screen and there
wasn't a mutiny, but not everyone was happy. You know,
some stuff we screwed up, Like we have some departments
as a small company that are one person, so we
(13:13):
listed a salary range for the role of the only
person in that department and they're like, okay, well, my
salary is basically out there like everybody else is in
a team, and it's a range. But they're like, if
if this is the only person in this role, everybody
knows exactly what I make to within a five thousand
dollar band. Jessica moy was one of the people who
didn't have anonymity. I'm the only person in my position,
(13:35):
so it's pretty clear, like my this is Jessica's Valerie band,
and everyone knows that's my job. And I never had
any issue with that, So for me, it wasn't like
a thing to process. I was like, this is what
I make. Even though Jessica didn't mind that everyone knew
her salary, you can see why some people might. Jun
(13:56):
Scheffer was also in a range of her own, but
she had a different problem him. I think it was like,
some of these ranges are pretty wide, but I would
feel more comfortable of bringing in other underrepresented people into
the company once I know it's like completely fair and
Neil knows he has more work to do. To Jen's point,
after the town hall, fog Creek decided to put salary
(14:17):
ranges on all of its job postings so that people
know they're getting hired on a level playing field. You
can't build trust just by saying trust me and not
showing anybody the work, especially in in tech, whereas so
many people have come from other companies that weren't treating
them right there weren't weren't you know, being fair to them, UM,
and so transparency is just the foundation upon which you
(14:39):
build a relationship between an employer and a worker that
is trusting. And you know, we try to do that
and everything we do. Given how much anil believes in
pay transparency, I asked him how transparent he planned to
be with his own salary. It was absurd because I said,
this is the range that I make the bottom of it.
(14:59):
So I like, UM, made a structure for any future CEO.
I guess, but I was. I just sort of disclosed
my personal salary because I was like, I don't I
want to model the thing I want people to feel
comfortable doing. Up to now, we've just been trying to
solve the pay gap by looking at the numbers. But
(15:21):
there are all kinds of things that happen at the
office and at different points in women's careers that make
a big difference over time in the amount of money
they make. And the biggest thing of all is motherhood.
Nothing trash is your earning potential, like having a kid.
Men and women start their careers making about the same
amount of money, But the pay gap really starts to
(15:42):
show up when men and women hit their late twenties.
That is, when employers think women are about to have kids.
One study found that the bulk of the pay gap
happens between ages twenty six and thirty three for college
educated women. And this isn't just because women cut back
their hours to pick up slack at home. Mothers make
proportionately less than men based on ours worked, research has found.
(16:06):
So what if we could do something about that, make
sure women could have kids and keep earning as much
money as their male colleagues. Adobe, the San Jose based
company that makes design software and also the flash plug
in you used to watch videos on the internet, last
year announced that they closed their gender pay gap one
percent in the US. That's for men and women doing
(16:28):
the same jobs, But that still doesn't mean the working
environment was perfectly equal, especially for women and men who
have kids. My colleague Ellen Hewitt explains, Caitlin Azzie works
at Adobe as a recruiter, but right now she's on
maternity leave. So Dylan was born on New Year's Eve,
so she squeaked in there. We got the tax right
(16:49):
off and everything. So and she was ten pounds six ounces,
huge baby. Yeah, we have big babies in our family.
Both men and women at Adobe get sixteen weeks of
paid paternal or maternal leave, regardless of whether they're the
primary caregiver. Birth Mothers get an additional ten weeks of
medical leave. That's compared to less than six weeks at
(17:12):
the average private company in the US that offers paid
leave for a new child, so already they're doing pretty well.
On top of that, the company gives employees the option
to take a more flexible work schedule, like when they
come back from leave. They call it Adobe Flex Time.
This is Ellen Ellen. I met with Caitlin along with
(17:40):
Rosemary Arianta Keiper, who oversees the flex Time program. Here's Caitlin.
I'm learning with me in a new mom It's like
you can plan for the you know, every single thing,
but nothing really goes to plan. So just having it
be you know, maybe I need to work from home
a couple of times a month, or you know, three
times in this one week, or just having that to
me is really really I can see be very helpful
(18:03):
when I return back to work, coming back to work
after having a child can be really hard, no matter
how much time you got from eternity leave, you're just
starting to figure out what being a mom is like,
or how to juggle caring for the kids you already
have plus the infant you just brought home. Without the
flexibility to ease back into full time work, some women
(18:24):
might decide to downshift to part time, which drastically limits
their earning potential. That usually involves a job switch, and
if going back to your old job with a new
baby is difficult, finding a new job is much much harder,
especially when you factor in the cost of daycare. In
the US, lots of women decide that it's just too
much and stay home for good. When Caitlin comes back
(18:47):
to work this month, she plans to take a day
each week to work from home so she can spend
the afternoons with her daughter. Adobe has offered the flex
time option for years, but it was only in the
last year that they started promote doing it internally and
training managers how to talk to their employees about it.
For Caitlin, that was a hugely important change. She was
(19:08):
already nearing her due date by the time she found
out the option existed. I think, um, before they rolled
out this program and the framework was more standardized, I
don't necessarily think people first knew that this was an option.
I think it gives people, at least me, a little
bit more of empowerment to think about what I need first.
Before they rolled it out, I just assumed I'd come
(19:30):
back full time and you know, you would be a
hard couple of weeks and then you just get thrown
back in and that's that. And um, that was sort
of my assumption. And so I just don't think people
want to ask for for more unless they, you know,
unless it's something that they can say, hey, it's a
point to a policy or point to something that's more normalized,
because I think there is a you know, there is
(19:51):
always pressure to be here if you can and things
like that. Rosemary knows that pressure well. As the vice
president of Global Rewards for a OBI. She knew that
even though the option for a flexible schedule was out there,
a lot of people who might benefit from it weren't
taking it. Yeah, I think there was the sentiment of
(20:11):
not realizing that they could take it. It does seem
to give permission and lend itself to the ability to
be able to say, look, this is documented somewhere, it's
kind of a formal policy. They're promoted. So it does
seem to give more permission to individuals to feel like
they can ask for it. You know, oftentimes the type
of relationship you have with a manager and kind of
the value system or or what they believe is important
(20:33):
dictates oftentimes how much they're willing to provide flexibility. And
what we realized was in some organizations it happened seamlessly,
it wasn't an issue, and in others, um managers weren't
as willing um to do it because they felt like
they had demands or or weren't sure how they could
um manage the program equitably across the organization. Since making
(20:57):
Adobe flex time more of a formal policy less September,
Adobe has seen a ten increase in the number of
people choosing it. Rosemary says that the more normal a
flexible work schedule seems, the less likely it is that
people who take advantage of it will be implicitly penalized
for doing so. Because here's what's worrisome right now. Even
(21:19):
though both parental leave and flex time are offered to
men and women, men are still taking way less time off.
What we're seeing is is most men, on average are
taking closer to one month. And the feedback that we've
got is is is because you know I've got we
don't both need to be at home. Is essentially the
response that we've gotten, even though they both have the
(21:40):
ability to be at home. The point of encouraging men
to use programs like parental leave and flex time isn't
just so that women have some help at home, although
it's that too. The point is so that women and
men share the burden of childcare more equally, including the
workplace penalties that come with it. When you miss a
may your career opportunity because you're at home taking care
(22:03):
of the kids. That can be frustrating. But right now,
women still do twice as much of the childcare in
the US. That means that those missed opportunities are falling
disproportionately on them. I'd love to see more men start
taking the time off right and taking advantage of these programs,
because I think that act in itself will also kind
(22:24):
of level the paying field. Two parents each with the
flexibility to balance work and home life. It does sound
pretty idyllic, It's also good for women's earnings. A study
in Sweden found that for each month of paternity leave
(22:45):
the father takes, the mother's income rises by an average
of seven percent. But in the US, at least, we're
a long way from that kind of thing being normal.
Only of private sector workers get any paid for rental
leave at all. Changing the way we deal with women
and men and work isn't something that happens all at once.
(23:09):
Paid discrimination has been illegal since the sixties, but that
hasn't stopped companies from paying women less over the years.
That's because sexism is a way bigger problem than the
pay gap. No one company is going to solve sexism
for everyone, but Rosemary is right. The more places where
gender equality is the norm, the harder it is for
(23:31):
everyone else to keep treating men and women differently. Next
week on The Paycheck, we're going to talk about how
individual women are trying to solve the pay gap for themselves.
Some are even resorting to motivational chanting. You are not
(23:58):
going to want to miss it. Thanks for listening to
another episode of The Paycheck. If you like the show,
please head on over to Apple Podcasts or wherever you
listen to rate, review, and subscribe. This show was reported
by Ellen Hewitt Claire Subteth and hosted and reported by
me Rebecca Greenfield. It was edited by Jillian Goodman and
produced by Liz Smith. We also had help from Francesca Levie,
(24:21):
Janet Paskin, and Magne Henrickson. Our original music is by
Leo Sidron, carry Vanderyott did the illustrations on our show page,
which you can find at bloomberg dot com Slash the Paycheck.
Francesca Levie is Bloomberg's head of Podcasts
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