How do we drive equal pay and equal representation of women in tech?
The Thoughtful Co. is coming at it from two angles: they help women negotiate their compensation, and they help employers build more inclusive workplaces that foster equitable promotion and compensation decisions.
You may have heard of The Thoughtful Co. before. In just over two years they’ve hosted workshops all over the world including at Oxford University and Nokia, consulted with major employers including 1Password and Thurber Engineering, and supported hundreds of women negotiate their pay at employers including Goldman Sachs, Shopify, Uber, and IBM.
Techtalent.ca sat down with co-founders Sophie Warwick and Jillian Climie to learn more.
To kick off, tell us about The Thoughtful Co. and why you co-founded it.
JC: I had spent my career advising on executive compensation, where I helped Board of Directors structure compensation packages for their top executive teams. I’d done this at Hugessen Consulting, Aritzia, and most recently led the global executive and equity compensation teams at Lululemon.
Throughout my career, I had seen so many women leaving money on the table in negotiations and not negotiating important elements like stock options and sign-on awards. I always wanted to do something about this, so in 2021, I decided to leave Lululemon to co-found The Thoughtful Co. I realized I could use my expertise to help women get paid what they deserve, and to help employers build more inclusive workplaces.
SW: I started my career in structural engineering where early on I focused on developing inclusive practices within the firms I was working at, first at Glotman Simpson and then most recently at Entuitive. I co-founded Employee Resource Groups (ERGs), and launched mentorship and sponsorship programs to ensure equitable access for career growth.
In 2018, I co-founded Women in Consulting Engineering (WCE) which is a non-profit that fosters community for women working in the engineering sector with two Canadian chapters and over 1000 members. As Co-Chair of WCE, I met many employers who were passionate about recruiting and retaining more diverse workforces, but didn’t always have the tools and resources in place to do so effectively. I co-founded The Thoughtful Co. so I could support more employers in more industries and regions in building more inclusive workplaces for women.
How do you help women increase their salary and other elements of compensation?
JC: First, we look at our client’s entire compensation package, including items such as restricted stock units, sign-on awards, role scope, employee share purchase plans, profit share, moving allowances, and work-from-home coverage. We understand what’s most important to our client when negotiating and prioritize accordingly.
Next, we’ll take a look at where these components land against market data. We have an internal database of hundreds of data points, many in tech, as well as salary surveys to supplement. With this, we help our clients feel confident in deciding on the specific numbers to ask for.
Finally, we help our clients craft a “negotiation script” so they can powerfully articulate what they want to ask for, using our proven framework. On average, we support our clients in achieving +25% increases in their compensation packages.
From there, we provide other services including employment contract reviews, equity compensation valuations, strength trackers and executive peer analysis. We can do the same analysis for a C-Suite executive that a Board uses to determine her pay.
From an employer’s perspective, how can companies in tech work to close the gender pay gap and drive more gender diversity?
SW: When discussing the gender pay gap, the first thing that comes to mind for many people in the tech sector is two individuals in the same role being paid differently for the same work. This can and unfortunately does happen in practice in some situations. Two factors that play a large role in this are the “Ask Gap” (see below) and the similarity bias.
The similarity bias encourages us to see future potential in those who present similarly to us, and baseline capability in those who are dissimilar to us. When there is uniformity in decision makers, they may be more likely to subconsciously compensate individuals who are similar to them higher because they can project their own future onto them. To tackle this, introducing diversity into evaluators for compensation decisions can increase objectivity. For example, having all compensation recommendations reviewed with a leadership team. If it’s difficult to explain the reasoning, it may be that the rationale is relying too heavily on a “gut feeling” rather than objective criteria to justify the increase.
The other scenario contributing to the gender pay gap that is less commonly discussed, is who is holding the highest paid positions. Assuming an organization has the highest standard of equitable practices in their compensation structure, they would still have a significant gender pay gap if the majority of senior leadership positions were held by a single gender. To combat this – especially in tech, investing in programs to introduce objectivity in promotional decisions as well as equitable access to mentorship and sponsorship is critical. For example, developing scorecards with pre-set objective evaluation criteria for all promotion decisions, or launching a formal sponsorship program that ensures equitable access for all gender identities.
Given today’s macroeconomic environment, what are your top tips for women negotiating their compensation in tech?
JC: An important tip, especially in tougher macroeconomic environments, is to focus the negotiation on you and the value you add to the team or company. What is your unique impact? What key metrics do you contribute to? For example, articulating that you’ve helped the company bring in four new clients this year which directly increases profitability, or that you helped the team implement new software that saves everyone six hours of work time per month, is so persuasive.
Also, think about other elements of compensation to negotiate beyond salary. Stock options are great to negotiate for when tech company valuations are lower because it provides more upside potential. One-time bonuses can bridge gaps when salary bands are frozen. Higher titles can increase your market rate. Severance amounts can and should be negotiated when you’re more senior in your career. There are so many elements to consider that can impact your wealth.
Lastly, understand you still have power in the conversation. Even in tougher times, companies need their best people to drive strategy and performance forward. Turnover is expensive: Gallup estimates it can cost approximately 50% to 200% of an employee’s salary, including the cost of lost productivity, recruitment and training.
What is the Ask Gap?
SW: Women expect and ask for lower compensation than men do. Leadership and HR teams are busy and don’t always have the capacity to proactively review all employees’ salaries. As a result, if you don’t ask for something, it is unlikely that you’ll receive it. Negotiation is an incredibly important and normal part of an employee/employer relationship.
When negotiating, women are more likely to put a lower number forward, or choose not to negotiate at all. Remember that negotiations should be a little bit uncomfortable. If you’re feeling incredibly confident with your number, and feel no nerves about your negotiation, you’re likely undervaluing yourself. Push yourself out of your comfort zone a little bit and remember that a male colleague might be asking for much more.
What are you excited about as you look towards the future in this space?
SW: I’m excited about the positive movement we’re seeing around investing in equitable, inclusive, and sustainable workplaces. We’ve known the business case for gender equity for a long time now, and we’re starting to see some really positive movement. I love hearing the excitement from clients we work with in the tech sector on the opportunity in front of them to make positive change that allows them to build more engaged and productive teams of all genders. So many of the women we work with mention company culture and inclusive practices as non-negotiables for them, so it’s an exciting time to see more workplaces investing in these programs.
JC: I’m excited about the conversations that are being had on these topics in the tech space. So many of the women we work with are ready to take the leap on negotiating where they may have not felt comfortable in the past. So many of the employers we work with are starting to take real actions to move towards building inclusive workplaces. We still have lots of room to go, but I’m optimistic that we’re moving in the right direction.