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Pay Equality

Pay Equality

We are a company that strives to do the right thing. Equal pay for equal work should be a given but it often isn’t. Women are outpacing men on college degrees yet still earn only 79% of what a man earns, and this statistic is often worse for women of color. Spotify signed the equal pay pledge in 2016 but we began our journey towards equal pay a bit earlier.

We thought of a multitude of factors that might affect pay equality between men and women. These are just a few of the areas where we are trying to make a difference:

  • In the US, not enough time is given to raise a child and often, women end up leaving the workforce to raise a child which can be career stunting. Additionally, because women often receive more parental leave than men, they are often perceived as the primary caregiver in the workplace. To combat these possible issues, we implemented equal and increased leave for both men and women globally so both are viewed as equal caregivers.
  • Women in the past have often been discouraged from pursuing higher paying STEM jobs. We encourage women to pursue these careers and regularly hold Girls Who Code events and women centric meet-ups to give girls role models
  • There could be a bias when rewarding performance and often women have not negotiated as strongly as men when it comes to salary negotiation.

To help combat this last point, in 2015 we began a global gender wage gap salary analysis to ensure we were paying fairly. We compared average male salary to average female salary by job and location. If women’s average salaries were below 5% of men’s averages, we flagged them. In collaboration with our HR business partners and managers, we researched these discrepancies. The main factors we take into consideration for difference in salary are performance, experience, and niche skills. If no justifiable reason was found for the salary discrepancy, we proposed an adjustment. In 2015, 7 adjustments were made. In 2016, 3 adjustments were made.

We plan to remain active with the Equal Pay Pledge community. In September, I attended a roundtable at the EEOC hosted by EEOC Chair Jenny Yang and OFCCP Director Pat Shiu and other companies interested in speaking about this topic. Ideas were shared on how to implement, improve, and take action on pay equality. I learned we have an advantage because Spotify is a young and nimble company. There are many challenges larger and older companies face. It’s often difficult to audit for gender wage gap because large companies may not have as clear data to work with, often have acquisitions that can make this data even messier, and don’t have the support from the top. In addition, once the problem is known, it can be difficult to action on this as budget is harder to allocate to the issue. We are fortunate because this initiative came from the top and we were able to action on our findings quickly.

This is still a fairly new exercise for us so we’re not saying we have the right formula down yet or the correct process, but it’s a start. We will continue to revamp and improve the process annually. My next hope and action is do this exercise across ethnicities (at least in the US) as this has also historically been an area of pay inequality. We’ll always keep improving and trying to balance the scales.

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