6 Decades After Civil Rights Act, Racial Pay Gap in IT Persists

The United States' Civil Rights Act of 1964 outlawed discrimination based on race, color, religion, sex, or national origin in the workplace. Yet, in the 60 years since the Civil Rights Act, many of the 455 full-time IT professionals responding to ITPro Today's 2024 IT Salary Survey feel that salary parity among different races and ethnicities is worsening.

According to our survey, only 46% believe there is salary parity/equality in terms of ethnicity or family heritage within their organization. This is 10% less than 2023's survey (Figure 1).

Figure 1

In addition, 14% said their companies have not taken positive steps toward establishing salary parity among employees of different races or ethnicities and have no plans to, which is 11% more than 2023's survey result (Figure 2).

Figure 2

And only 35% agreed that their companies are trying to better support employees of color in general (which is down from 40% in 2023) (Figure 3).

Figure 3

Dr. Bob Sarver, an associate professor of business at Waldorf University and a past senior director of supply chain management at Walmart with international experience in logistics and supply chain that included internet fulfillment, pointed out in an email interview with IT Pro Today  that we might be reading too much into differences of survey data from one year to the next, since differences in samples sizes, etc., could cause very different results. Also, "When it comes to salary parity," Sarver said, "there may be a difference between perceived parity and actual parity. … It would be interesting to know if there were established salary guidelines in their organizations for level of skill, years of service, etc., which would nullify consideration of race/ethnicity, especially in the tech field."

In addition, Sarver points to companies in the headlines such as Meta and Google that are downsizing programs that were part of diversity, equity, and inclusion (DEI) investments, which CNBC connected as part of a wider trend of declining DEI jobs. This, along with an election season where issues regarding race are at the forefront, the pessimism regarding salary parity "may be a question of mood of the moment [rather than] their overall employment situation," he said.

While the broad questions addressing impressions of improving or declining salary parity may not tell us too much of the state of the industry, specific results from our 2024 survey suggests that there are significant issues, especially for Latinx IT pros.

One of the most surprising findings in our 2024 survey was the pay disparity for Latinx-identifying IT pros compared with other ethnic groups. In our survey, we had 7% of respondents who identified as Latinx (Figure 4), which is similar representation to Google's reported 6.7% Latinx representation in its 2023 diversity report.

Figure 4

However, we had no Latinx respondents who reported making $175,000 or more a year. This is compared with 26% of respondents who identified as Asian who made $175K or more, 26% of whites, and 24% of Black and African-American respondents (Figure 5).

Figure 5

Unsurprisingly, Latinx respondents were also the most dissatisfied: 30% reported that they were either very dissatisfied or dissatisfied with all aspects of their job, including compensation and benefits — compared with 15% of Asians, 14% of whites, and just 4.76% of Black and African-American respondents (Figure 6). 

Figure 6

Job Insecurity and Long Hours

However, Asian IT professionals feel the most insecure about their jobs. Nearly one-third (32%) of Asian respondents said they feel insecure about their present job, with more than 10% feeling very insecure. In comparison, 10% of Latinx respondents, barely 8% of white respondents, and less than 5% of Blacks/African-Americans are feeling insecure about their current jobs (Figure 7).

Figure 7

When it comes to having a healthy work-life balance, a higher percentage of Black/African-American IT professionals (33%) claim they work long hours, compared with 24% of Asian, 25% of Latinx, and 30% of white IT pros. However, nearly one-fifth (17%) of Asian IT professionals strongly disagree with the statement that they can get their work done in a normal 40- to 45-hour workweek (Figure 8).

Figure 8

On the Move: Why Are Asian IT Pros Looking Elsewhere for Work?

However, when answering the question "How likely are you to leave your organization within the next 12 months?" more than half (55%) of Asian respondents said they were likely or highly likely to leave, the same percentage as Latinx IT professionals. As a comparison, 38% of Black/African-Americans and 32% of white IT pros said they were likely or highly likely to leave their organization in the next 12 months (Figure 9).

Figure 9

While dissatisfied Latinx looking for other jobs is no surprise, why would Asian IT pros respond so highly to wanting to leave their organization?

One possible reason why Asian IT pros would be much more likely to leave their positions than other races is found in Buck Gee and Denise Peck's 2015 research for the Ascend Foundation, "The Illusion of Asian Success," where their research indicated that "Asians were the least likely among all Races to become managers and executives" in the Bay Area technology sector.

In 2021, many Asian American IT pros of all levels described to Bloomberg the burdens and stereotypes preventing them from rising to the top, including the burden of what Margaret Chin, a sociology professor at Hunter College, calls the "forever foreigner" stereotype — the notion that Asian Americans have split loyalties to the U.S. and their ancestral home. This, what is often referred to as a "bamboo ceiling," may encourage Asian IT pros to seek out promotion through new jobs rather than within their current organization. According to ITPro Today's 2024 IT Salary Survey results, less than three-quarters (72%) of Asian IT pros were given a raise in 2023, compared with 90% for Black/African-Americans and 82% for white IT pros (Figure 10).

Figure 10

Benefits of Salary Parity

When, according to a Just Capital Report, only "34% of companies disclose workforce demographics by race, ethnicity, and gender by job category in their EEO-1 Reports or similar intersectional data," it is likely that companies are only relying on merit-based guidelines and not grappling with the effectiveness of implementing diversity and whether the results are producing the fair parity they seek. When the perceptions of IT pros seem pessimistic and parity after 60 years still seems out of reach, IT companies should care about salary parity for two simple reasons: bragging rights and earning more money.

Public optics, such as Adobe's ability to advertise five years of pay parity or Glassdoor's eight years, is an effective way to inspire highly qualified applicants from all backgrounds to apply. (According to Glassdoor's Gender Pay Gap and Salary Transparency report, 3 in 5 [60%] employees would not apply to work at a company where a pay gap exists).  

Perhaps more motivating for organizations is the research shows that diversity significantly improves financial performance, at all levels of an organization.

Paul Gompers, a business administration professor at the Harvard Business School, and Silpa Kovvali a screenwriter and past research associate in the Entrepreneurial Management unit at HBS, researched the impact of diversity of venture capital firms and found that "Diversity significantly improves financial performance on measures such as profitable investments at the individual portfolio-company level and overall fund returns." Concretely, "the success rate of acquisitions and IPOs was 11.5% lower, on average, for investments by partners with shared school backgrounds than for those by partners from different schools. The effect of shared ethnicity was even stronger, reducing an investment's comparative success rate by 26.4% to 32.2%."

One key takeaway from Gompers and Kovvali's research was that the very successful venture capitalists at the very top of organizations were diverse, not just those who worked below (where research also suggests that diversity benefits organizations). When considering salary parity, it's often linked to the different ranking levels within the organization.

Pay Equity Audit: First Step in Addressing Salary Disparities

One simple solution, offered by Amii Barnard-Bahn, a partner at Kaplan & Walker and the CEO of Barnard-Bahn Coaching & Consulting, is to start with a pay equity audit (PEA). "A PEA involves comparing the pay of employees doing 'like for like' work in an organization (accounting for reasonable differentials, such as work experience, credentials, and job performance), and investigating the causes of any pay differences that cannot be justified."

This echoes Sarver's question earlier about whether a company had "established salary guidelines." Taking the time to investigate whether or not a company's guidelines are being followed and fairly implemented is a simple and first step in Barnard-Bahn's PEA process. "The next step is remediation," Barnard-Bahn says. "Depending on budget constraints, companies may raise an employee's salary incrementally over a couple of years until it achieves the target amount … on a go-forward basis."

Barnard-Bahn also cautions those who assume their organization has achieved pay parity simply because it emphasizes merit: "Research demonstrates that organizations that emphasize meritocracy as a core value actually are worse when it comes to pay equity because they don't scrutinize or monitor their behavior. And such optimistic complacency will hurt organizations." It will hurt organizations not only in missing out on great candidates, but also in retaining Black, indigenous, and other people of color (BIPOC) IT pros.

Bridging the equity pay gap, especially for groups like Latinx IT pros, should be the emphasis for companies moving forward. It will make them more profitable. It will attract more qualified applicants. It will give them bragging rights they can be proud of.