How Appit Ventures Eliminated Its Gender Pay Gap
Having a diverse, skilled workforce is paramount to this software company’s success
For many employers, the gender pay gap remains a prevalent issue even as we enter 2020. While significant progress has been made in recent years to close this gap, women in Colorado aged 16 and older who work full-time, year-round reportedly make 86 cents on the dollar compared with men who work full-time, year-round.
Which is why when Amanda Moriuchi became the CEO of mobile app development company Appit Ventures in 2018, she put eliminating the wage gap at the top of her to-do list.
The reason why? Moriuchi couldn’t see a plausible reason the gap existed in the first place. That, and it was her belief that if she eliminated the gap, she could hire a skilled, diverse staff.
“I have a fundamental core belief that diverse teams are strong teams,” Moriuchi says. “Especially in our business, when we're developing custom software, the value that we bring to our clients is a way to creatively solve a business problem that they have. Diversity is critically important to our survival.”
Recruiting and retaining a diverse and talented workforce, in Moriuchi’s mind, required making the hiring process as transparent and stress-free as possible. “When somebody is looking for a job, the biggest question that they want answered right away is what the pay is going to be,” Moriuchi says. “But if you look at job searching today, no employer tells the job seeker what the pay is going to be until the very end of the process. It’s a huge waste of time.”
So, Appit Ventures, at Moriuchi’s helm, standardized its pay scale.
Standardizing the Pay Scale
Now, Appit employees are compensated based off of two factors: the position itself (Appit hires project managers, developers, designers and quality assurance personnel) and the experience level required for the position (junior-level, mid-level, senior, etc.). And each year, every employee gets a consistent (pre-agreed upon) raise determined by the same factors.
In order to create and define this pay scale, and the subsequent annual bonuses, Moriuchi and her team researched (using Payscale, Salary.com and Glassdoor) what its competitors and other companies in its industry were paying for similar positions and took an average across these based on position, level and years of experience. The results of which now live in a “salary spreadsheet,” which is used every time a position becomes available.
The outcome of this pay scale has been multi-faceted. According to Moriuchi, it has decreased negative competition within the company because everyone knows what everyone makes (and why); the increased transparency has bred trust and honesty between her and her employees; recruiting has become easier, as her employees are more willing to network and vouch for the company; and she has clarity on budgeting, which makes it easier for her to make good decisions as a business owner.
For other employers considering a similar approach to tackling the pay gap, Moriuchi advises: “Just do it. As the employer, it is your responsibility to determine how much you are willing to pay your employees. And so don't rely on your employees to tell you what they think they should be paid, because if you do that, you’re furthering the pay gap.”
Hiring for Diversity
Specifically, the standardized scale has helped the company simplify and improve its hiring process. For any position, the process begins with a 15-minute pre-screen where the prospective employee is told exactly what they will be paid and what their raise will be each subsequent year of employment. From there, the prospect can determine whether or not they want to continue with the hiring process.
While some people do opt-out at this point, Moriuchi mostly sees further interest. And if there is further interest, the prospect is interviewed by both the hiring manager and the would-be team. Appit also has a standardized set of interview questions based on the role to eliminate bias at this stage of the hiring process.
“Everybody gets the same chance, the same opportunity, to present who they are,” Moriuchi says.
More work to be done
Appit is a custom software development company that was founded in 2012 that has grown to include 36 employees, with two more joining this month. While Moriuchi has yet to study how standardizing salary affects retention, she has noticed a palatable increase in engagement and perceived loyalty.
As for what’s next? Moruchi is working to ensure her employees are celebrated and motivated on an individual basis. “I believe that if you give people enough time and enough money, they do their best work,” she says. “I’ve already given them enough money and time, but looking ahead to 2020, what is the extra per that would make you feel really good? And it’s different for everyone.”