IWD: Gender Pay Gap In South African Tech Widens

International Women’s Day (IWD), celebrated annually on March 8th, is an important day that highlights the achievements of women around the world and serves as a reminder of the ongoing struggle for gender equality.

Apart from celebrating women’s achievements and advocating women’s rights, it also helps raise awareness about gender inequality which is still predominant in workplaces around the world. This year’s theme for IWD is DigitALL: Innovation and technology for gender equality.

A report by OfferZen, South Africa’s largest developer job marketplace on the State of the South Africa Software Developer Nation found that the gender pay gap in South African tech continues to widen: Among entry-level developers, the gender pay gap has increased to 13.2 per cent, up from 6.4 per cent in 2022. At senior levels, the gap has widened from 16.3 per cent to 25.7 per cent. The findings were based on a survey of over 4500 developers.

While the figures are sobering, OfferZen’s CEO and Co-founder Phil Joubert encourages HR and People team leads to consider the nuance behind the data. “It’s easy to reduce the data to a headline, but there are multiple factors at play here. This includes the fact that male developers start coding earlier than women developers. Women, regardless of their profession, also continue to shoulder most of the child-rearing responsibilities, often taking time out from their careers.”

In 2019, OfferZen’s annual report found that over 50 per cent of male developers start coding before the age of 18 years, compared to only 33 per cent of women. OfferZen data found that developers who start coding earlier in life earn higher starting salaries and, as a result, earn more throughout their careers.

“Discrimination is real, but only one factor in the growing gender pay gap in tech. Globally, the trend is moving in a positive direction, but there’s still much to be done. Local companies should reflect on their compensation and ensure that women in tech are being fairly compensated. Reducing the gender pay gap inside companies will help retain high-quality tech talent in a competitive hiring market,” Joubert advises.

High inflation is affecting South African developers’ real salary growth

The good news for South African software developers, according to the report, is that their salaries have increased, despite the global slowdown in tech. Junior developers saw the biggest increase in 2022 at 19.4 per cent compared to 2021. Senior developers have also seen increases of an average of 6.2 per cent, but year-on-year salary growth halved compared to 2022.

While developer salaries continue to increase, the report says, higher-than-average inflation is eating into real salary growth. When adjusted for inflation, entry-level developers are the best off with real earning growth at about 11 per cent, while the salaries of developers with more experience grew by less than 2 per cent.

Cape Town retains the top spot for developer salaries in 2022, with Johannesburg, Durban, and Pretoria catching up at the more senior levels. Gauteng-based developers with more than ten years of experience are separated by less than a 2 per cent difference in salary when compared to Cape Town-based developers.

“With more than half of South African developers working at fully remote companies, we expect the salary difference between cities to decrease even further in the coming years,” says Joubert.

Fully office-based policies are still the exception: Less than 8 per cent of developers have to go into the office every day, the report found.

Local tech industry avoided mass tech layoffs in 2022

The tech hiring spree that kicked off in 2021 slowed down significantly in 2022, with tech giants like Amazon, Microsoft, and Meta laying off thousands of employees. South African companies managed to mostly avoid layoffs in 2022: less than 3 per cent of South African developers were retrenched last year.

Consistent with 2022, about 30 per cent of developers say they plan on changing roles in the next 12 months. The top three reasons developers say they’d leave: Better salaries, benefits, and remote opportunities.

“This relatively high number of job seekers is a promising signal that developers are still optimistic about their job prospects in South Africa. We have a lot of bootstrapped businesses with solid business models and unit economics, which in turn makes them more robust when funding is less easily available, like what we’re seeing right now.”

“For developers, this means that there are still many strong local job opportunities,” Joubert said.

When it comes to benefits, 1 in 5 South African developers still don’t receive common monetary benefits. More developers are receiving medical aid contributions, equity, and bonuses from their employers going into 2023, which is a positive move for companies looking to retain their tech talent.

South African developers are cooling on crypto; AI the most promising industry in 2023

After a tumultuous year that saw the value of Bitcoin crash and multiple exchanges go bust, local developers are cooling on crypto: The share of developers perceiving crypto as the most promising industry has fallen by half.

AI remains the most promising industry for the third year straight. Despite its popularity, most South African developers are not yet working with AI tools or Application Programming Interfaces (APIs). The cost of accessing APIs and a lack of AI-specific knowledge are seen as the main barriers to entry. The release of ChatGPT and trial versions of Open AI tools like GitHub’s Copilot and GPT-3 give developers more opportunities to explore the possibilities of AI in 2023.

While AI, Cloud, and FinTech are still considered top industries by developers, there seems to be growing interest in Virtual Reality, IoT, and Robotics. The popularity of Virtual Reality has doubled from 6.3 per cent in 2022 to 11.2 per cent in 2023. Robotics and IoT saw a rise in popularity by 32.2 per cent and 26.4 per cent, respectively. Interest in VR is expected to spike later this year with the release of Apple’s VR mixed-reality headset.

Volatility in the tech hiring landscape set to continue in 2023

As the local market starts to absorb the impact of a highly volatile global tech climate – combined with a tough macroeconomic outlook for South Africa – 2023 looks set to be a challenging year for tech recruiters looking to hire the best software developers.

“People and Talent teams will need to do more with less: fewer people, less time to fill crucial roles, and less budget. Sourcing high-quality candidates with the right mix of skills, experience, and salary early in the hiring process will be crucial to help companies weather the storm,” Joubert said.