Is Temporal Flexibility Key to Closing The Gender Pay Gap?

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money money moneyYou don’t need to work in a male dominated occupation to find your pay check weighs light relative to your male colleagues – particularly, if you’re in business.

In March 2015, the US Census Bureau released the latest pay statistics from 2013, including median earnings by detailed occupation, showing that full-time working women earn 78.8% of what full-time working men do. The census data revealed that across 342 occupations, women (barely) out-earn men in only nine.

Across the nine, the female pay advantage is “nearly inconsequential,” ranging from .2% (counselers, dishwashers) to 6.2% (producers and directors), with a margin for error that could wipe the gap. Yet a very significant pay gap (advantage: male) persists across most professions, even when women are prevalent in them.

Data on relevant occupations illustrates the point:
Occupation % in occupation who are women Women’s earnings as a % of men’s earnings
Securities, commodities, & financial services sales agents  30%  55%
Financial specialists, all other  55%  60%
Personal financial advisors  31%  61%
Financial clerks, all other  61%  62%
Financial analysts  32%  63%
Financial managers  54%  64%
Market research analysts and marketing specialists 56%  75%
Accountants and Auditors  59%  75%
CEOs  23%  76%
Compensation, benefits, & job analysis specialists  74%  78%

Source: Drawn from US Census Bureau, 2013 American Community Survey

While frustrating gaps in occupations that are historically male-gendered (eg CEOS, financial analysts, securities) may come as less of a surprise, the gap within female skewed jobs (financial clerks, marketing, accounting) underlines that closing the gender pay gap takes more than female representation.

Are men just more valued? Nancy F. Clark of Forbes WomensMedia writes that when men move into female dominated occupations such as nursing, the overall pay of that occupation and level of tasks included in the job remit begins to improve. If appears that when men enter an occupation, its value goes up.

But, what’s going on in finance and business?

Gender Penalties Are Bigger in Business Jobs

Claudia Goldin, Henry Lee Professor of Economics at Harvard, found in her research that when it comes to explaining the majority of the residual gender pay gap, “what happens within each occupation is far more important than the occupations in which women wind up.”

Among high-earning occupations, Goldin found those grouped as “business” have the biggest gender pay “penalty” for “being a woman relative to a man of equal education and age, given hours and weeks of work” whereas “science” and “technology” occupations have the smallest ones.

Census Bureau data shows that women make up only 24% of “computer, engineering and science occupations” and earn 83% as much as men. Women make up 54% of “business and financial operations occupations” but earn only 75% as much as men.

Non-Linear Earnings Are Penalizing Women

“Quite simply the (residual) gap exists because hours of work in many occupations are worth more when given at particular moments and when the hours are more continuous,” writes Goldin.

In many occupations, earnings “have a nonlinear relationship with respect to hours” – for example, a 70 hour week is rewarded in well over double the earnings of a 35 hour week and working 9-11 am counts much more than working 9-11 pm.

It’s less a matter of whether women take time off work to have children or seek flexible hours. It’s whether they are disproportionately penalized for the time they are absent from the office or for working their hours outside of the standard work day.

“Some occupations have high penalties for even small amounts of time out of the labor force and have nonlinear earnings with respect to hours worked,” Goldin writes, and then the gender pay gap is bigger. “Other occupations, however, have small penalties for time out and almost linear earnings with respect to hours worked.”

In previous research, Goldin and Katz quantified the occupational difference in pay penalty among Harvard 1990 graduates. They found that a similar 10 percent hiatus in employment 15 years after receiving their BA (18 months break) meant a decrease of earnings of 41% for MBAs, 29% for JDs or PhDs, and 15% for MDs.

Reduction in earnings as a result of time-off “was linear in lost experience” for MDs, but highly nonlinear for MBAs. “Any time off for MBAs is heavily penalized,” reports Goldin.

Remuneration penalties can result in women going to a different occupation, shifting down within the occupation hierarchy, or being out of work. The research found that when part-time work is largely available, women take off less time (eg pharmacists). Because it’s less available in business, women end up taking off more time even with higher penalties.

Goldin writes, “A flexible schedule often comes at a high price, particularly in the corporate, financial, and legal worlds.”

Closing the Gap

Goldin suggests that the last chapter to achieve gender equality involves “changing how jobs are structured and remunerated to enhance temporal flexibility.”

She found that certain contextual factors close the gender pay gap, such as when colleagues can more easily be substituted for each other and when information can easily and cheaply be relayed between colleagues.

Forbes contributor Clark advises to get the ball rolling on arranging temporal flexibility before you need it – anticipating and addressing the issues that need to be overcome.

How committed is your firm to making temporal flexibility work for women and for the company itself? What evidence do you see? Firms that are serious about gender equality will be proactive in making it work – and add up – for both.

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Voice of Experience: Heidi Stam, Managing Director and General Counsel, Vanguard Group

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Heidi Stam“Choose something that you love because if you love what you do, work hard and learn as much as you can, everything else will come.”

Directly out of law school Heidi Stam took the law firm route as was suggested, working for a large firm and then a boutique firm. She realized litigation didn’t resonate so she switched to deal work, which she describes as the antithesis of litigation. “I loved helping two parties build a solution together,” she says.

After having her first child, though, she started debating her options and found out that the SEC was looking for lawyers. With her experience in corporate deal work, she believed it could be a good fit until she learned they were offering a position in the investment management division. Unfamiliar with that vein, she turned it down – and was surprised when two days later one of the interviewers called her and expressed their disappointment that she had passed. They offered a chance for her to come back and talk to attorneys and get a feel for the work; so instead of a day of interviews, she had two attorneys at her disposal to learn more about the role, which she eventually accepted.

“It was the best thing I’ve ever done,” she said, ultimately spending 10 years in five different positions at the SEC, which eventually led to her role at Vanguard. “You never know what will present itself to you, and being open minded and flexible can help your career.”

A Company on the “Vanguard”

When Vanguard’s CEO contacted her, she said she was particularly interested because of her high regard for the company: In her role at the SEC she had had the opportunity to see all the investment management firms and mutual fund companies in the country.

“I knew Vanguard was a special company with top-notch leadership and terrific values; it was a risk worth taking to leave Washington and join them.” She joined as head of securities regulation in 1997, and became general counsel in 2005, joining the senior executive team.

The firm has been expanding internationally and so the legal and compliance function has been growing simultaneously. Part of her role will be to build that function for the next decade, which involves working globally in different cultures and countries and through different legal systems and compliance regulations.

“We’ve embraced the challenge because we’re excited about the opportunity. Seeing the team collaborate on this work makes for a rich and exciting experience,” she said.

Other industry developments that she will help oversee include the growth of Vanguard Personal Advisor Services in which Vanguard is offering a hybrid model of a professional advisor paired with an online experience that they believe offers a superior approach at a very low cost. The service recently launched after two years of preparation and Stam believes that it’s a model that will work for investors at all stages of life. “Our mission is to offer the best chance for investment success and we think this program will deliver that. “

For Stam, the achievement she is most proud of is her ability to teach others as she grows her team. “When I look back on my career, what’s most satisfying is the ability to have touched all those people along the way. Hopefully they feel they learned something, or I put them in a better position to lead or otherwise progress.”

That achievement underscores her philosophy that a great team dynamic produces superior results. “Understanding your role within a team and what you can do to help create a strong team environment is very important as you move through your career.”

Increasing Women in Leadership Positions

Stam says that her industry seems to attract a higher representation of men than women and that creates its own challenge: women should not be daunted by the current numbers. To that end, she says she is privileged to be one of the founding members of Vanguard’s Women’s Initiative for Leadership Success (WILS), which was started seven years ago.

The WILS organization is designed to support the women at Vanguard and create an environment that fosters development and encourages women in their leadership abilities.

So far she says there has been great success, with more than 4,000 members and an increase in internal promotions as more women pursue senior leadership roles. “We’ve helped women at Vanguard see what they can do, and now we’re focusing s on external hires.”

As Stam points out, the funnel doesn’t have a high representation of women, but the company is committed to patient hiring because they know the benefits that women in senior roles offer.

Although the firm has an equal overall representation of women and men, she said that their goal is to make sure there is similar diversity in senior leadership roles. “It’s been a personal pleasure to see the number of women role models increase,” she said.

On the home front, Stam has a “wonderful husband,” and four adult children.

“The last one was a two-fer” she says, indicating her 21-year-old twin girls, as well as a son who is 26 and a daughter, 28. “I wouldn’t change a single thing.”

By Cathie Ericson

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Theglasshammer.com 6th Annual Women in Tech Event: How Pursuing Your Passion and Taking Career Risks Can Help You Thrive

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By Melissa J. Anderson (New York City)

The Glasshammer 6th annual Women in tech eventThe women speaking at our 6th annual women in technology event last week emphasized the importance of taking risks to advance in your career.

“There is an infinite number of paths to a rewarding career in technology,” said moderator Dana Kromm, a senior partner in the Private Equity/ Mergers and Acquisitions practice in San Francisco at Shearman & Sterling.

“It’s up to you to pursue your own passion and take your career where you want to take it,” she added.

The panelists included Maureen Erokwu, founder and CEO of Vosmap and an advisor to Lesbians Who Tech; Lori Fellela, Senior Director of End User technologies at TIAA-CREF; Mary T. McDowell, former EVP and Head of Mobile Phones at Nokia and now a director on several corporate boards; and Sinead Strain, global head of Fixed income currencies, and commodities technology (FICC) at Goldman Sachs.

They shared stories from their own careers in tech and offered advice to the women in the audience on how to advance and thrive. Several of the panelists took risks on projects and even promotions changes early in their careers, which, they said, ultimately helped set them on the track to career growth and great learning even if in the moment, it didn’t feel that way.

Career Advancement- how can following your passion take you further?

Erokwu described how her passion for photography led to her to found Vosmap, a digital mapping company that has a contract with Google Street View. Similarly, Fellela began her career working in tech support, “climbing under desks,” before she decided to pursue a more creative path as a developer. She then switched into roles where she could interact with people more as well as work with technology. Fellela shared with how she believes hiring great people is really important to both enjoy and and advance at work.

McDowell described how she began her career developing products that began to become commoditized at Compaq and HP. When she got a call from a headhunter about an opening at Nokia in the completely different field of Telecoms, she jumped at the chance.

“Maybe it was hubris,” she said with a laugh. “I thought, I don’t know much about telecoms but ‘I’m smart – I’ll figure it out.” She did figure it out to become head of an entire business.

Strain also took a several risks in her career, including two big moves. The first time she moved from Dublin to London and then, later, she moved to New York City, for what was supposed to be a three month project. Instead, she found her new home.

Mentors and Sponsors

The women discussed how mentors and sponsors have also shaped their career paths. In turn, the panelists described what they look for in a mentee or someone who can mentor them.

Strain said she looks for passion, and someone who is looking for advice and is open to feedback.

“That’s the most powerful thing you can get,” she said, adding that sometimes feedback can sting but that’s the most powerful conversation someone can have.

McDowell said she looked for people with ambition.

“It’s more rewarding to help take the rough edges off someone who is pushing hard than to light a fire under someone,” she said.

Similarly, several panelists described how clients also helped them advance in their careers.

“Clients can be your biggest advocates,” Erokwu said. Relationships and referrals can help build business, and talk up your skills before you get the next job.

Networking

The panelists all agreed that both internal and external networking can be valuable to career advancement since it opens up opportunities to you build relationships with people who can help you in your industry and beyond.

my advice to women is to get out there, get away from your desk and meet people – Lori Fellela

For example, Strain described how she had initially approached her company’s women’s network with skepticism. But she quickly learned that it was a good way to find support from colleagues. Moreover, she said, participating in the group taught her a lot of organizational skills as well.

“It’s not enough to just come – it’s not like watching TV,” Fellela agreed. “You have to participate, my advice to women is to get out there, get away from your desk and meet people”.

Networking outside work can also help women advance. Fellela described making a business connection with a woman she met while volunteering with her daughter’s sports boosters club. Erokwu said being part of the Lesbians Who Tech community had also helped her grow in her career and make new connections that literally has given her product and firm real exposure which has translated into business.

“Inviting other women to those communities ultimately makes those communities stronger,” she said.

Additionally, advised McDowell, it’s important to build relationships with peers, not just people who are more senior.

“You never know where people are going to advance to,” she said. McDowell got her first board seat because one of the board directors was someone she had gone up against in an intense negotiation years earlier. He remembered her when he saw her name on a slate of candidates for the opening and recommended her for the job.

Advice

Finally, the panelists shared the advice they wish they’d heard earlier in their career.

“I wish someone had told me to find someone who’s been to where I’m going,” Erokwu said, adding that she thinks she has finally found that person.

“My advice is to get out and go meet people. Talk to people and make connections,” Fellela said. “Have those relationships before you need them.”

Kromm agreed. “The sooner you start building your network the better it can be,” she said.

McDowell discussed the importance of culture fit in an organization.

“Can you be your best self? Will your work be rewarded? Think of yourself as a valuable resource, ask yourself ‘what’s the best ROI’ for you”? she said.

Strain emphasized the importance of pursuing risks.

“When you’re confronted with two options where there is a safe one and a risky one, consider choosing the risky one if it makes sense, she said. She added with a smile, “It might be more fun.”

All panelists agreed that using networks like theglasshammer and technology specific organizations like Anita Borg Institute (ABI) are a great way to find support and strategies to advance as a woman in technology.

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Voice of Experience: Reena Agrawal Sahni, Partner, Shearman & Sterling LLP

Reena Agrawal Sahni“I don’t like to give advice because I believe that we each find our own path in life, but I do try to lead by example,” says Reena Agrawal Sahni, a partner at Shearman & Sterling and head of the firm’s US Bank Regulatory practice. “And that is important to me because I have learned from watching the examples set by others.”

As early as her first job after law school, clerking for Judge Jon O. Newman of the U.S. Court of Appeals for the Second Circuit, Sahni found such a mentor and exemplar. “Working with someone of that caliber who was excellent at everything he did, but did it with ease, grace and good humor, gave me a model for how I wanted to conduct myself professionally,” she recalls.
After the clerkship, Sahni spent several years in private practice, gaining experience in a variety of corporate practices, such as bankruptcy, capital markets, M&A, internal investigations, and bank regulatory issues, and in the latter found a niche that was especially fascinating. “I found that the bank regulatory practice was the perfect mix of transactional, academic, and advisory work. It never gets boring because it is so client focused. It is all about the clients’ needs regardless of where that takes you,” she says.

Sahni then spent two years at the U.S. Securities and Exchange Commission in New York, where she led investigations into securities fraud. She says moving from private practice to the government was especially gratifying, where again she was fortunate to benefit from the example of hard work in the service of the public interest set by her colleagues at the agency.

Expertise in Demand

That experience was cut short when the financial crisis hit in 2008. The financial regulatory landscape changed dramatically, and with her bank regulatory expertise much in demand, she returned to firm work, focusing on Dodd-Frank-related developments.
In August 2014, she joined Shearman & Sterling as a partner in the Financial Institutions Advisory & Financial Regulatory practice. Much of her work is with foreign clients who are dealing with U.S. regulations, an aspect of the work that she finds endlessly interesting. “We are really helping clients solve problems and accomplish their business objectives in a heightened regulatory environment,” she explains. “The industry as a whole has been undergoing a seismic shift in regulation and supervision, and it is an exciting time to be practicing in this area. Significant policy questions about what the regulatory framework should look like are still being debated. I feel fortunate to be a part of that debate.”

Reflections on Women in the Legal Field

Reflecting on her career, Sahni says that she wishes she had appreciated how much value she was bringing to clients by working hard and being creative, even in her early years. “As a junior associate, there can be a tendency to underestimate your contributions, especially when you’re working with so many experienced people,” she says. She encourages others to realize their worth and the significant value they bring to the table.
Sahni advises women entering the industry to seek outpeople who they admire and on whom they’d like to pattern their careers. “Be bold and learn from their experiences,” she says. “They’ll be willing to talk to young lawyers about how they progressed, and even though everyone figures out on their own what works for them, you can learn a lot by inquiring about the paths others have taken.”

She herself has learned a lot from the women she considers her mentors and peers, noting, “I’m constantly inspired by the way that the women I meet manage their careers.”
Though relatively new to Shearman & Sterling, she has been impressed with the level of commitment that the firm has to women and diversity in general. She’s currently involved with the women partners’ group, where they share best practices for how to connect with clients in different ways.

Having a one-year-old and a five-year-old at home doesn’t leave Sahni much time for hobbies, but she tries to balance her passion for her work with time with her family. “I was concerned on our last family vacation when our five-year-old wanted to stay up late writing my work emails for me,” she says, laughing. “But I was proud of the example my husband and I are trying to set for her and her sister to work hard and accomplish your goals.”

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