The Gaping Hole in Silicon Valley’s Meritocracy Myth

Women and people of color are still being lowballed by recruiters, stonewalled in negotiations, and passed over for promotions

As protests against racial injustice erupted across America over the last month, I watched with interest as companies in the tech industry, where I’ve spent my career, came out with statements of solidarity, donated to the cause of racial justice, and promised to do better with their diversity and inclusion efforts. What got left out of most of these conversations was a reckoning with the long-standing problem of pay inequity for women and BIPOC (Black, Indigenous, and People of Color). This prompted me to reflect on and share my own experience of being underpaid as a first-generation immigrant Asian woman compared to my white male colleagues.

When I tweeted about my experience, I was surprised to receive responses from over 200 women and BIPOCs who shared their own stories of being lowballed by recruiters, stonewalled in negotiations, and passed over for promotions.

One person claimed that women at the major tech company where she worked were often hired at a lower “internal level” (which determined pay) than male colleagues, even when they shared the same title. I heard from the female cofounder of a startup, who said when the startup was acquired by a larger company, she was offered half the salary of her male co-founders, and then they stonewalled and bullied her in negotiations, leading her to quit. “The whole experience left me so shook it took me months to even consider looking for employment,” she said.

We couldn’t help noticing that a group of us that included all five women in the class were making 20% less on average than the others (who happened to all be white men with computer science degrees).

The responses I received prompted me to write about this to urge leaders to fix structural pay inequity in the industry, and to offer advice to other professionals from similarly underrepresented backgrounds on how to negotiate for fair pay.

I started my tech career in Silicon Valley more than 10 years ago, after graduating into the 2008 recession. Not wanting to take out graduate student loans during a recession, I deferred my plans to attend law school and took the first tech job I could find, working in customer service at a San Francisco solar finance startup. Dealing with irate customers meant I had to triage their problems while acting as a conduit to product and engineering, serendipitously leading me into product management.

My dream of becoming a lawyer rerouted to becoming a product manager. But when I started applying to product roles, I was met with skepticism. “We only hire people with engineering degrees and/or MBAs,” many hiring managers told me. I found this absurd since the actual day to day job of a PM has nothing to do with coding, but rather facilitation, problem solving, research, and working through people issues. Nevertheless, I taught myself to code by enrolling in a Ruby bootcamp and building apps on the side. I was hungry to prove myself as “technical enough” and prove the naysayers wrong.

After honing my project management and technical skills at three successive startups, I felt like I needed some coaching to learn product management formally, so I applied to Facebook’s Rotational Product Management (RPM) program, aimed at developing and training future product leaders from a wide range of backgrounds. I was ecstatic when I received my Facebook RPM offer in spring of 2014. My recruiter told me that my offer was nonnegotiable when she read me the offer package over the phone; my first-generation Chinese immigrant parents had taught me to be grateful for whatever the world offered. Considering my humble beginnings in customer service making $45K a year in San Francisco, I was over the moon to receive an offer of a six-figure salary with a signing bonus and an equity package. Taking my recruiter’s words at face value, I signed my offer without negotiating.

A year into my job at Facebook, I started to notice inconsistencies in our total compensation packages through conversations with a trusted circle of colleagues. A group of three women PMs, including myself, began to aggregate our total compensation across our starting class of 25 product managers. Looking at our spreadsheet, we couldn’t help noticing that a group of us that included all five women in the class were making 20% less on average than the others (who happened to all be white men with computer science degrees). Discussions with the other RPMs revealed that while some of us had been told that our offer was nonnegotiable, the same recruiter had allowed others to negotiate for better offers.

While all the women in the class were being underpaid relative to their peers, this discrepancy did not break down neatly along racial or gender lines, or by experience or qualifications. In trying to understand this gap, we speculated that the recruiter might have been willing to negotiate offers with candidates who had better credentials, or competing offers to use as leverage. However, these reasons went against the basic tenet of Facebook’s RPM training program: that we all started on the same level, doing the same job. The program was supposed to be a great equalizer since it recruited candidates from different backgrounds — banking, consulting, teaching, and graduates straight out of college.

After my experience at Facebook, I vowed to myself that I would never be taken advantage of again in salary negotiations.

When we took our findings to HR, they told us that people do not come to Facebook for compensation but for the experience. Soon afterwards, a top female VP reached out to us and said that she was on our side. She said that the pay gap was not that significant and assured us if we only worked hard to get promoted, Facebook would close any pay differences between us and our colleagues.

A couple of months later, I received a surprise invitation to meet with HR. I thought I was about to get fired for raising my voice about the salary discrepancy. Instead, the HR rep asked me to accept a one-time payment of $20,000 to adjust for the salary discrepancy. I accepted the bonus and I walked out of that meeting feeling confused and helpless. A one time payment of $20,000 felt like a nice gesture, but my base pay remained unchanged, and it got me thinking about how, similar to compounding interest, a 20% deficit could compound over the course of my entire career.

I later learned that Facebook had made similar one-time payments to others in the class who had been underpaid, but without making a public or internal statement explaining what had happened or promising to revise their hiring practices. The arbitrary and opaque nature of the pay discrepancy and how Facebook chose to deal with it left me feeling disillusioned with the company. I stayed on for another year, feeling like a second-tier citizen the whole time. Up until the point that I learned I was making 20% less than my colleagues, I had believed in the myth of meritocracy in Silicon Valley.

Our RPM class faced a huge attrition rate as product managers left for higher paying jobs at other companies. I fought hard for a promotion that fell through after my sponsoring manager left the company. With my one advocate gone, I started looking for new opportunities.

After my experience at Facebook, I vowed to myself that I would never be taken advantage of again in salary negotiations. I felt cheated, indignant, and angry. I wanted to correct the wrong I had experienced at Facebook.

Like many children of immigrants, I was taught to be grateful for what others offered to me while children of white upper middle class families were taught to advocate for themselves and ask for more. Unwiring my brain from the survivalist immigrant mentality would be pivotal on my journey for pay equity. I began to study negotiations and read business school case studies to prepare myself for my next offer. My old manager at Facebook taught me how to anchor high.

So when Tumblr founder David Karp recruited me to move to New York and redesign Tumblr mobile content creation, I began to negotiate aggressively with multiple offers in hand. I told my Tumblr recruiter how much equity I was walking away from at Facebook and asked to be made whole with my new offer. At the same time, I walked away from a competing offer from another major tech company because they refused to give me a senior PM title, even though they offered me a senior PM salary. Walking away from that suboptimal offer empowered me to value my own worth. I accepted the offer at Tumblr because they valued me intrinsically.

Companies that want to live up to their stated goals of improving diversity in their organizations need to recognize that diverse candidates come from a wider array of backgrounds as they’ve had to face institutional bias at every stage of their education and career. You can’t expect to find a lot more women or BIPOC candidates for your roles if you keep looking through the same narrow pipeline of Ivy League computer science majors, or widen your pipeline only to offer diverse hires lower pay to do the same job because they don’t have the same credentials as the white male candidates. If you say you value diversity in your organization, that value has to be reflected in how you pay your employees.

It’s unfair to put the burden of fixing an unjust system on the women and BIPOCs who are most harmed by it.

When it comes to pay equity, the tech industry is notorious for its wide disparities. A 2018 Hired study found that 54% of women in tech surveyed had learned at some point that they were being paid less than their male colleagues. According to the Institute for Women’s Policy Research’s report on pay equity and discrimination, wage disparities widen even more when cut by race and gender across all industries.

What holds women and BIPOCs back from negotiating

The reason we don’t have pay equity is because startups and large corporations have benefited from opaque salary bands and offer negotiations. Corporations take advantage of information asymmetry during negotiations, leaving interviewees ill-equipped to ask for their fair market rate, and employees in the dark about whether they are being paid and given raises equitably with their colleagues. This is especially acute for women and BIPOCs, who are subjected to conscious and unconscious bias from recruiters and hiring managers.

It’s unfair to put the burden of fixing an unjust system on the women and BIPOCs who are most harmed by it. The onus should be on companies to implement equitable recruiting and hiring practices. That said, if you are a woman or BIPOC, do not shy away from having hard salary and compensation conversations with your colleagues. If you are someone in a privileged position, consider sharing your compensation with your fellow women and BIPOC colleagues. Until we can push more companies to be like Buffer in salary transparency, let’s help each other negotiate by sharing our own data and offering advice to others.

Still, it’s important to remember that the best time to ensure that you get compensated fairly is before you join a company since it’s much harder to revise your compensation after you have accepted an offer. Negotiate for higher pay at the offer stage by doing research on market rates for similar roles and industries by accessing pooled data sources and interviewing resources like 81cents, Level.fyi, and Candor, and anchoring high. Don’t lowball yourself, as Hired’s 2020 study shows many women candidates do and decline to answer questions about your salary history.

Finally, before going into a negotiation, know your BATNA: Best Alternative to a Negotiated Agreement, or what you plan to do if the negotiation falls through. Walking away signals to the other party that you are worth more. Sometimes you may get called back with a better offer; sometimes not. The whole point of walking away is an exercise in self-confidence.

What employers must do

Meanwhile, if you’re a business leader, recruiter, or hiring manager, here’s how you can avoid putting the burden of fixing a broken system on the women and BIPOC candidates and employees who are consistently failed by it.

Don’t ask the “salary history” question to people who interview for your roles. Asking interview candidates about their current or last salary can be used against them, perpetuating their salary deficit into the next job. In the last few years, California, Massachusetts, New York City, and a number of other regions in the U.S. have outlawed the practice of employers asking candidates about their salary history, as it is known to perpetuate pay inequity. Where it remains legal, recruiters and hiring managers should stop asking for the last job’s salary because it perpetuates pay gaps over the course of a person’s career.

If there are pay inequities at your company, document and fix them before your employees feel compelled to do it for you. Conduct pay audits, and make your hiring practices transparent. Companies that have well-defined pay bands and career tracks, and required performance reviews tend to have higher pay equity. At Square, company leadership reportedly agreed to conduct pay audits and close compensation gaps after some employees conducted their own.

Economic justice is an issue of social justice. What might seem like a small difference in compensation can compound over time, leading to vast gaps in generational wealth. Having the title of engineer when it should be engineering manager could keep you from becoming a CTO or CEO one day. I want leaders to establish clear and transparent standards for pay equity, and for women and BIPOCs to fight for what we deserve. We need to arm ourselves with the right knowledge, support system, negotiation tactics, and policy changes to push for economic justice and equity.

Product-focused investor empowering underestimated founders. Writer. Advisor.

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