Economy

How Intel Eliminated Its Own Gender Pay Gap

CREDIT: AP Photo/Ben Margot

Intel CEO Brian Krzanich

Every year, tech giant Intel analyzes its employee compensation by gender and ethnicity. But in 2015, it decided to really dig in and answer the question: Do we have a gender wage gap among men and women doing essentially the same work?

So it drilled into the data, comparing pay across job types and levels and comparing employees with similar education, experience, performance, and responsibility. And it found something surprising: there was no gap in pay between men and women when measured this way. “We nearly fell out of our chairs,” Danielle Brown, the company’s chief diversity and inclusion officer, said. It’s notable given that on average, across the economy, women make 79 percent of what men do and experience a wage gap in every industry, even when accounting for a variety of explanations.

The company chalks the lack of a gap up to work it’s been doing for a while. “We’ve invested a lot of time and attention in making sure all processes, from recruiting to performance management to promotion…build in fairness and equality,” she said. As one example, the company examines its annual performance reviews to make sure they appear to be fair for women and people of different ethnic backgrounds and that those people are also being promoted at comparable rates.

The next step for Intel is to examine its compensation levels not just by gender, but also by racial groups to make sure there is pay fairness by race. The gender wage gap, across the workforce, is far larger for women of color than for white women.

It also wants to make sure that no pay gap creeps back in. “Once we achieve 100 percent [equity], we want to stay at 100 percent, that’s very important to us,” Brown said. So it will continue to do annual audits of its pay levels to ensure that everything seems comparable.

At a time when many technology companies say they’re focusing on changing an industry that is still overwhelmingly white and male, often producing few results, Intel stands out for other work it’s doing on diversity. While there is certainly plenty of room for Intel to go further, the steps its taken appear to be paying off.

The company isn’t new to this game. Founded in 1968, Intel is no startup. And Brown says the issue of diversity has been on its radar for the last decade. The main approach over that time was to conduct unconscious bias training for its employees, which tries to uncover the prejudices everyone holds but may not be aware of. But it wasn’t working. “We were’t seeing the results that we wanted to see from all that work,” she said. The share of its employees who were female or from diverse ethnic backgrounds stayed stuck in about the same place over those ten years.

So last year, CEO Brian Krzanich made a public pledge to have all levels of its own workforce reflect the gender and racial makeup of the American workforce by 2020 and committed spending $300 million toward reaching it. As an interim step, the company also committed in 2015 to ensuring that at least 40 percent of its new hires in the U.S. would be diverse — in other words, not white men — and that it would retain employees it already had from those diverse backgrounds at the same rate as their white male peers.

The company says it met, and even beat, its own goals last year. More than 43 percent of its hires were from diverse backgrounds, it announced in its recent report, a 35 percent increase over the year before. It also successfully retained diverse employees at the same rate as non-diverse ones. “It was the first time in nearly a decade we were able to achieve that,” Brown said of the latter benchmark.

Brown described the tactics the company used to make progress. One way is by roping its entire workforce into the effort. “We hold every Intel employee worldwide accountable to these diversity goals through a companywide bonus program,” she said. Its workforce was told of the twin goals of increasing diverse hiring and retention at the beginning of 2015 and that they would get bonuses if they were met. That way everyone was bought in.

It also expanded its reach and did more to make sure new hires felt welcomed. Brown said that, for example, it increased the number of colleges it recruits from by 60 percent over the last year, part of its effort to broaden the pools it draws from away from the traditional ones it’s relied on. It also brought diverse candidates into the company for hiring days that aimed to get them excited about working at Intel. And once people were hired, it tried to find ways they felt welcomed in right off the bat. “We can’t just hire people in,” Brown explained. “We have to make sure integration is successful.” To that end, it launched a program that brings all of the women it hires together at headquarters for a week.

Intel’s workforce now looks a bit more like America, although it certainly has plenty of room to expand. Overall, its U.S. employees are just under a quarter female and more than half white, while its technical workforce is about 80 percent male and 50 percent white. Its leadership team is even less diverse, at more than 82 percent male and nearly 70 percent white.

Intel also doesn’t aim to necessarily make its workforce mirror the American population, but to mirror the “market availability” of women and people of color for particular roles. That means that while women make up half of all Americans, the company says they only make up 22.7 percent of the technical labor force pool it draws from for its technical employees, so it’s aiming for that share. Similarly, it says that just 4.5 percent of the technical labor market is African American, while 8.4 is Hispanic. There are plenty of factors that serve to depress those shares, from discouragement in school to follow these career paths to workplaces that push people out of the field.

It also wants to do more than it achieved in 2015. “There’s way more work to do in this space,” Brown said. In 2016, it wants to retain even more diverse employees than white men. “Retention is going to be a very key focus for us, especially looking at the underrepresented minority population,” she said.

To get there, it will do a number of things. Its leadership will be trained in how to run more inclusive teams; a program it launched in December to help encourage these habits has already drawn the interest of 25,000 employees around the world. Intel is also tapping white men to get involved in the efforts as allies. “As women and underrepresented minorities, we can’t make this change alone,” Brown said.

And while the company has done things like offer increased paid parental leave in a bid to retain more women, Brown said it’s also recognized that cushy benefits can only go so far if someone is working with a bad manager. So it’s focusing on better training for those key leadership roles. “A lot of the everyday decision to say or leave a company is driven by the experience with managers,” she said.

The company also recognizes the difference between achieving diversity and achieving actual inclusion. “Diversity gives you a critical mass of difference,” she explained. “But if we’re really going to change the game, we have to focus on changing our culture.”

It’s not just about doing the right thing. For Intel, it’s a business decision. “We’re transforming into much more of a diversified company, and we truly believe that diversity and inclusion are key to this evolution and our continued relevancy and growth,” Brown said. “We’re appealing to a far broader set of consumers, in different age ranges and ethnicities, around the world. We know in order to deliver cutting-edge products and innovations, we can’t have the same set of people working on problems and products.”