Equal Pay Day @ Elastic

Today, April 2, is Equal Pay Day in the United States. Why? The current date is a symbol of how far into 2019 American women on average must work to earn what white men earned in 2018. The date varies around the world but the headlines are unfortunately consistent. In a perfect world, Equal Pay Day would be January 1 (or better yet, go away entirely).

While it frustrates me that these pay gaps exist, progress is being made, and Equal Pay Day is an opportunity to have a candid conversation about what pay equity looks like at Elastic.

Two and a half years and nearly 1,000 employees ago, we took a close look at our salaries globally to ensure that we didn’t have unnatural pay gaps based on gender. At the time, it was a manual, somewhat ad hoc process. We had yet to build out our pay bands and compensation structures, to have a comprehensive “leveling” system. We dug in and found a handful of roles where we identified unexpected gaps between men and women in similar roles and we made pay adjustments to fix those issues.

Following this review, we also looked at our recruiting process. We knew that basing offers on past pay has played a significant part in perpetuating gender pay gaps so we stopped asking for prior pay long before jurisdictions started passing mandates making it unlawful.

Fast forward to 2019. We have nearly 1,400 employees in nearly 40 countries. Given our hyper-growth and much more structured recruiting and pay processes, we wanted to make sure that we truly understood where we stood on pay equity. So, this year, we partnered with Economists Incorporated (EI), an external consulting firm, to undertake a statistical pay equity analysis.

Erik Mitchem, our partner at EI, provided an overview of the process and outcome:

“The review was rigorous examining various types of compensation and grouping employees in a number of ways. Our analysis included multiple regression analysis of base salary, variable pay, and on-target earnings controlling for grade, job family, years of service, years in current job, and age at hire (as a proxy for prior work experience). The analysis was conducted by department, job family, headcount rollup, and across all employees to identify potential pay disparities that may exist.”

Candidly, I was anxious to see our results. So where did we land? Again, Erik provided a summary:

“We looked for unexplained differences in pay between men and women and found zero statistically significant pay disparities. For every dollar earned by men, female employees in the U.S. on average earn 99.6 cents in the same grade, job, department, and with similar experience. Globally, female employees earn 98.8 cents for every dollar earned by comparable male employees.

Female employees in Engineering, a profession where gender gaps are often persistent, are paid $1.03 for every dollar earned by men in similar roles and with similar experience.”

Are we perfect? Certainly not. Like many companies, we are on a journey with our approach to diversity, inclusion and belonging. And it is critical that the most basic of our employees’ needs, their compensation, is approached equitably. To ensure that we maintain what we’ve achieved, we will resubmit our pay recommendations after our upcoming annual compensation cycle and then again on an annual basis. Over time, we hope to include further demographic data to deepen our understanding of where other potential gaps might exist, particularly among people of color. I’m incredibly proud that we’ve kept to the path we set out on and were able to validate that doing the right thing is making a difference to pay equity across Elastic globally.