This Month in Seattle Tech

A Seattle Startup Helps Companies Measure Their Pay Gaps

At the fore of the salary transparency movement, Syndio’s advocating for more than just gender pay equity.

By Benjamin Cassidy March 31, 2022

When Maria Colacurcio started as CEO at Syndio in 2018, class action suits spurred by the MeToo movement had highlighted a glaring need: a way to continuously measure gender pay gaps at large companies. Employers often hired pricey law firms to point out these chasms of inequity on a temporary basis. “You're just playing Whack-a-Mole over and over again, and just crushing the same problems year after year,” says Colacurcio.

So as an alternative, many businesses embraced Syndio’s comparably cheap software. The Seattle startup’s products allowed them to quickly identify pay disparities, pinpoint policies or structural problems causing them, and project how salary remedies would affect their bottom lines.

Broadly speaking, however, more measurement hasn’t led to more equity in the few years since. Women in the U.S. still earn about 83 cents for every dollar a man makes, and the number may be even more pronounced in our city of tech bros. But the conversation around what pay equity entails has grown more sophisticated, per a recent report from Syndio, and is now informing a salary transparency movement the startup stands to help shape.

In 2021, a survey of Syndio’s clients, which include Nordstrom, Salesforce, and Adobe, found that nearly 98 percent of these employers now analyze race along with gender in pay equity analyses. Before George Floyd’s murder and the ensuing Black Lives Matter protests, that number was less than 50 percent.

Which, as persistent gender inequity demonstrates, does not mean change will come immediately. For starters, Syndio’s survey revealed that only 25 percent of companies reviewed stock and equity, and 31 percent had no future plans to do so. Kind of a big deal, especially in the realm of restricted stock units. “The dirty little secrets of pay inequity hide in things like bonuses, incentive pay, and stock options, because discretion across large populations favors the majority,” says Colacurcio. “So the more discretion you have in a decision, the more you're going to have issues.”

Also, Colacurcio stresses, equal pay for equal work is not the same as workplace equity. Opportunity—promotions, performance, retention rate—is what truly broadens median pay gaps. Syndio’s latest product, a platform that uses internal and external compensation data and other metrics for goal-setting, aims to make corporate diversity pledges something more than performative aspirations. Like many others, Colacurcio has heard the promises and rolled her eyes. “Most of the time, these companies have no idea how they’re going to get there.”

It’s not just a matter of moral obligation or good business sense. Increasingly, it’s a legal matter. Multiple states are considering legislation that mandates pay transparency to hasten workplace justice. In Washington, a bill mandating a salary or pay range for many job postings awaits governor Jay Inslee’s signature. And in California, proposed legislation goes a couple of steps further. It aims to narrow median pay gaps by making employers with 100 or more workers publicly report compensation data, as well as provide ranges for new positions. Unlike in the UK, which requires companies to disclose gender pay gaps, California would also break down discrepancies by race and ethnicity. And its effects wouldn’t just be felt locally. “A lot of folks are maybe not thinking about it, because they hear it, and they just dismiss it as a California thing,” says Colacurcio. “But if you have even one employee in California, this impacts you.”

Syndio has helped with briefings on potential laws. For Colacurcio and the rest of her company, it’s a little strange, and gratifying, to see legislatures and others suddenly take up the cause of pay disclosure. The startup has posted salaries on job postings for a while now, as well as new roles internally. Its Pay Finder tool keeps their offers competitive. “Starting pay is the biggest factor in any pay equity analysis,” she says. “When you have this mentality of ‘start low, stay low,’ that's really bad, because it compounds the gap over time.”

Colacurcio is confident that companies can’t explain away this racial inequity as stridently as gender discrimination. The Smartsheet cofounder notes that California’s legislation would force companies to report compensation for different types and levels of work as well. “It's a full body scan,” she says. “There's nowhere to hide.”

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