Mikko Väyrynen
Tuunia Keränen and Henrik Muukkonen, Translation: Apropos Lingua

The salary gap grows on the way to the top

The median salaries of men and women differ. The median man earns 7 000 euros more per year than the median woman. At top management levels, the difference grows to 15 000 euros.

The salaries of university-educated women in the tech sector lag behind the salaries of equally educated men over the span of their careers, finds TEK’s latest labour market survey.

According to the survey, women’s median salary was 89 % of men’s median salary when looking at all full-time employed respondents.

The salary gap in favour of men is visible at all position levels and, relatively, the gap was the widest in top management.

According to TEK’s salary researcher Tuunia Keränen, the salary gap is difficult to explain on the basis of the data collected in the survey, because the data has not yielded any explaining factors.

– The salary numbers do not contain overtime compensations, which means that the salary gap cannot be explained by men racking up more overtime hours. The notion that men would be more active in salary-related matters would not seem to explain the difference either. 13 % of women say they discuss their salary regularly with their supervisor, one tenth of men say the same.

Keränen reminds that the persons responding to the labour market survey shared an educational background and were employed doing similar work.

– The differences do not disappear even if we focused solely on the private sector: even there the women’s median salary is only 89 % of the men’s median salary.

The difference between men and women has shrunk somewhat from 2008, when the labour market survey found women’s median salary to be 84 % of the men’s median.

– Though in the last few years, the difference has remained stable between 88-90 %, says Keränen.

The median salary of a university-educated engineer exceeded 5 000 euros

According to TEK’s labour market survey conducted in October 2020, the median salary of a university-educated engineer in permanent employment was 5 100 per month and the average salary was 5 564 euros per month. The same figures for those university engineers who graduated in 2020 were 3 534 and 3 603 euros.

In other words, the median salary of a university-educated engineer rose by 2.3 percent when compared to last year, and the median salary of recent graduates increased by 0.7 percent.

The median salary of a university-educated engineer in permanent employment was 5 100 per month and the average salary was 5 564 euros per month.

The development of salaries has also been positive in other degree groups, with the exception of other master’s degrees. However, for groups with only a small number of respondents, the uncertainty factor grows and annual swings from side to side are not uncommon. 

Three out of four saw their pay rise

75 % of full-time employed respondents estimated that their salary had increased from last year. 18 % saw their salary remain the same and 3 % stated that they had received a pay cut. The share of those who got a had risen slightly from the 2019 labour market survey.

A general raise was clearly the most common reason for increased salaries: 69 % of respondents who said that their salaries had increased had received a general raise.

69 % of respondents who said that their salaries had increased had received a general raise.

23 % of these respondents had received a raise based on personal performance or merit. A new position with the same employer brought a raise to 13 % of those who received one, and 10 % had received a raise after changing companies.

The median monthly raise of those whose raise was merit-based was 260 euros, which is 10 euros more than in the previous survey. A new position or work task with the same employer brought an average monthly raise of 500 euros while changing workplaces brought an average raise of 600 euros.

In 2020, the general raise was 1.3 percent for most sectors. However, the specifics of the pacing of this raise were negotiated locally.

Performance-based pay most common in the industrial sector

Some six out of ten full-time employed respondents said that they had participated in a performance-based compensation system of some kind. These kinds of systems are most common in the industrial sector, where three out of four respondents were involved in one.

When viewed from the perspective of position, merit-based compensation was more common in managerial than specialist roles. 69 % of executive managers, 72 % of middle management, and a little over one half of specialists participated in a merit-based compensation system.

80 % of those involved in such a system had received a merit-based bonus over the last 12 months. This share has remained the same from 2019.

The average size of the merit-based bonus has remained the same, at roughly 7 % of annual income. Relatively, the largest merit-based bonuses were paid in the industrial sector and the private sector in general where the bonus was 8 % of annual income. 

Position also affects the size of the merit-based bonus. At top management, the median merit-based bonus is 10 % of annual income, while it is 8 % for those in middle management and 6 % for specialists.

COVID-19 made its presence known in the form of layoffs

The share of unemployed respondents had remained at 2.8 %, the same as last year at the time the survey data was collected, but the share of laid-off employees had increased. In 2019, 0.3 % of respondents had said they had feen laid-off either full or part-time. Now this share was 1.7 %.

The survey also probed into the effects of the coronavirus on labour market positions: 11 % of respondents said that they had been laid-off part-time as a result of the pandemic, 4 % had been laid-off full-time and 3 % had been unemployed.

Read more: www.tek.fi/en/salaries

Some 9 500 respondents

The data for TEK’s most recent labour market survey was collected in October–November 2020 and the survey was aimed at TEK members in the labour market. The survey received almost 9 500 responses and the response rate was 21 percent. The number of respondents fell slightly from last year.

Men made up 76 percent of the respondents and 24 percent were women. The respondents’ median age was 41 years. Master of Science in Technology was by far the most common degree as 79 percent of the respondents had completed it. Most of the respondents, or 88 percent, were employed full-time. 2 percent of the respondents worked as full-time entrepreneurs.

85 percent of full-time employed respondents worked in the private sector, about half of whom worked in industrial fields. 95 percent were in permanent employment relationships.

Once again, we would like to extend our gratitude to everyone who submitted a response. Thank you!