Jobs for the Girls? Management Jobs, Gendered Roles and the Wage Gap

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Group Of Women Meeting In Creative Office

By Cindy Goodman

Women’s representation in management is higher than it’s ever been, but advancement it seems appears to happen more in certain professions than others.

As women make up most of the new management jobs created from 1980 to 2010, but they do so in fields that are female dominated and have the largest gender wage gap.

By using data on full-time managers from the U.S. Census and American Community Survey for the years 1980 and 2010, researcher William Scarborough found of the nearly 4.5 million new jobs in management created since 1980, women have obtained the majority of them. In 1980, not a single management occupation was majority women. By 2010, some occupations are female-dominated while others are male-dominated.

The research shows women have high representation in management in fields such as health services, education administration, and human resources and low representation in management in professions such as computer information, transportation, architecture and engineering. In addition, women still make up less than one-quarter of chief executives and public administrators.

Scarborough told The Glass Hammer what he found surprising was the positive advancement women have made into management positions in the field of finance. “Culturally, finance has been seen as more of a masculinized profession, but the research shows 54 percent of management jobs in finance are held by women,” he said.

Scarborough said he also found it surprising that only 23 percent of CEOs of companies of all sizes in the U.S. are women, according to the Census. The percentage is unchanged since 1980, he noted.

At a recent Women’s Leadership Summit, KPMG Chairman & CEO Lynne Doughtie shared her thoughts on female representation in management. “We still have a lot of work to do to advance women in leadership roles and into roles that have been traditional been held by men. We need more role models to give women confidence to pursue those unconventional careers.”

Striking, though not surprising, Scarborough’s research found women are paid less than men as managers across all occupations. He also found the more women managers in a profession, the higher the gender wage gap.

For example, women have made big advancements in management in the medical administration and health services field, according to Scarborough. In that profession, 70 percent of managers are women, up from 47 percent in 1980. “It’s one of the fastest-growing fields in the country, which is good news for women in management. However, the bad news is that there is a 20 percent gender wage gap in management positions in that field, which means the women in management are underpaid,” he told The Glass Hammer.

On April 10, Equal Pay Day, LeanIn.org president Rachel Thomas, discussed the organization’s fight to educate people and companies about the gender pay gap, including the even larger gap for women of color. “No matter how you slice it, women are paid less than men,” she told CNBC.com. “The more educated women are, the larger the gap is.” Thomas said one in three men don’t believe the pay gap exists. Her organization encourages employers to conduct pay audits and be aware of bias in performance reviews. She also encourages women to aggressively negotiate their salaries.

Some companies are setting organization-wide goals around gender parity, recognizing that when women rise, their representation in management lifts the entire organization. In a report titled Getting to Equal, Accenture, a global consulting and professional services firm, found women are three times more likely to rise in organizations with women already in leadership and where there is a women’s network. Accenture found when women rise, men do, too.

Now, the consulting firm has set bold goals of achieving a gender-balanced workforce by 2025 and ensuring 25 percent of its managing directors are women by 2020. Globally, 32 percent of Accenture’s newly promoted managing directors are women. “There are companies that talk about gender parity, and companies that do something about it,” said Pierre Nanterme, Accenture Chairman & CEO on a video that accompanied the Getting to Equal report. “Companies should have equal numbers of men and women. It means pay and access to leadership opportunities should be equal. My pledge is to continue to drive this at agenda at Accenture and to evaluate and accelerate opportunities to bring more women into leadership roles.”

Of course, it’s not as easy as merely setting goals. In a dialogue prepared for International Women’s Day, Meggy Chung, co-lead for Citi Women Affinity in Singapore, stated to create an inclusive culture, managers need to be educated on unconscious bias and the importance of inclusive behavior, and organizations need to create opportunities to involve women in franchise-wide networks or initiatives. They also need to offer a mentoring platform that is accessible, she said, and noted that career progression for women is generally more difficult than men because of several factors, including how women’s identity is perceived in a corporate environment. A different support system to help women goes a long way in pressing for progress in this space, she said.

To move toward gender equality: Scarborough sees several steps that can make a difference. He believes diversity training is a start, along with setting goals as Accenture has done, and holding managers accountable for diversity on their staff. “It’s really about thinking about your environment and what strategy will be most successful in creating gender parity in your organization,” he said.

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Tips for Women on Negotiating Salary Now That Equal Pay Is Mandated

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Guest contributed by Susan Brennan

On April 9, a US appeals court ruled that a woman cannot be paid less than a man for the same job simply because they had a prior lower salary.

While this is certainly progress in the right direction, it will be interesting to see how companies enforce and track this in action.

Do you cringe a little when you think about salary negotiations? While negotiating your salary might feel like something you would rather avoid, deciding, whether or not, to accept a salary offering and having the confidence to negotiate for higher, is a skill that take you well beyond your life right now.

However, pay secrecy or being discouraged to discuss salary is a real thing that many people, especially women, deal with. According to a survey from the Institute of Women’s Policy Research, 51 percent of women reported, “The discussion of wage and salary information is either discouraged or prohibited.” And with women in the United States earning on average 80 cents to every dollar a man makes, the time for women to feel confident to earn what they deserve and have these conversations is now.

Here is a guide on salary negotiating from the moment you receive the offer to the moment you and your future employer agree upon a number.
  • Before the offer—and even the interview—do your homework so you have data to back up your case

Before you start talking numbers, figure out how much you need to live by doing an inventory of your fixed expenses. This is called determining your bottom line. What do you have to pay every month rain or shine; rent, child care, food, car payment? This isn’t necessarily the number you should settle for, but it will give you your bottom line—then build up. Caveat: Employers do not care what your expenses are, so don’t use this as an argument for more money.

  • Know your worth

There are a lot of resources to help you determine what the market is paying for similar positions and experience levels. Websites like Glassdoor and Payscale allow you to plug in a job title and years of experience and get a range for what the market will bear for that kind of role. The numbers will take into account geography and a number of other factors that have an impact. Across industries, pay gaps vary. For example, female doctors earn significantly less than male doctors, an average of 28 percent.

There are also some awkward situations you need to be ready for, such as:
  • On the first interview, you’re asked about your salary expectations. A good (and honest) response is to tell the interviewer that at this point, you’re focused on learning more about the role and what you will be doing before moving forward with salary. If you absolutely need to answer, never provide a single number; have a range ready based on your research so you have data to back you up. If you’re asked about salary on an online application, try to skip that question or enter a range if possible; otherwise enter the high end of your range.
  • You get the offer at a lower salary than you expected. First, express that you are excited about being offered the position and the value you can add to the company. Then add something like this (given that you’ve done your homework on fair market salary): “I did want to talk to you more about the base salary because I’ve done research around comparable roles with my background in [insert experience], and my expectation was that I would be in the range of [insert range here] and I’m wondering if there’s room to negotiate.” And make sure you also ask questions about benefits such as health coverage, retirement matching, and vacation; they can add a lot of value and should be taken into consideration.
  • You want to negotiate the salary. Should you email, meet in person, or make a phone call? The natural tendency for a difficult conversation is to email, but when it comes to salary it’s very important to have a conversation if you can. You can certainly send email to say you would like to talk more about the offer, but set up a time to talk. It will help both of you get a good read on each other, and you can get answers quickly. If the answer is “No” to negotiation, ask when you could expect to get closer to your range. “How do people in this position historically move up the range? How often will I be reviewed and see salary increases?”
  • You get the call with the job offer and salary you want. Should you accept? First and foremost, do not say “Yes” right away, as it binds you without knowing the full terms of the offer, including benefits and reviews. Pause, take a deep breath, be gracious; and buy some time. A good response: “I’m thrilled to get the offer and I will definitely take some time to think about it. Could you send an email with all of the details and we can schedule a follow up call to discuss?” This is important: Do not make verbal acceptance to an offer without reviewing all the details! It may seem counterintuitive to pause after all your work negotiating, but there are a lot of other details that are part of the offer. The contracts are typically written by a lawyer or human resources personnel and can be binding— even if you’ve only made a verbal agreement. Carefully review the agreement once you receive it.

The bottom line of successful salary negotiation especially for women: Know your budget and have data on the market range (versus a single number) to back up your worth. Don’t be afraid to ask for what you deserve; but make sure you are vision-driven—the value you will add to the company—and data-informed.

Susan Brennan is Associate Vice President of University Career Services at Bentley University and co-host of the career advice podcast Counter Offer, the podcast that helps you love Mondays. Over the past decade, she has put Bentley on the map for delivering impactful career education and outcomes, with 99% of first-year students participating in her team’s ground breaking career development course and 97% of 2017 graduates employed or attending graduate school within six months of graduation.

Disclaimer: The views and opinions of guest contributors are not necessarily those of theglasshammer

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The Girl With The Draggin’ W-2

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By theglasshammer team

pay gap

Image via Shutterstock

Wells Fargo Securities’ Economics Department recently released a report entitled, The Girl with the Draggin’ W-2, which explores the complexities of the gender pay gap. Following publication, we received many questions from interested readers. Diane Schumaker-Krieg, Global Head of Research, Economics, & Strategy for Wells Fargo Securities, responds to these questions below.

  • What were the most surprising results of the study?

Despite huge advances in technology and the ability to work remotely, the highest paying jobs continue to reward those who can work the longest and least flexible hours. Physically showing up at the office (or wherever you’re required to be) is still a prerequisite for getting ahead. And that puts primary caregivers — usually working moms — at a disadvantage.

  • Why haven’t we closed the gender gap? Why has progress stalled? Because society hasn’t fully accepted that fixing the problem for women means we also have to fix the problem for men. Both men and women need greater flexibility in their lives. Yet, it is still difficult for men to tell their employers they need time off to take their child to the doctor or to tell new acquaintances at a barbecue that they’re stay-at-home dads. Until these evolving realities are more socially accepted, the costs/burdens will fall on women. Some of the most successful women in our Research division have spouses that are full-time dads. In fact, Jodi Kantor of The New York Times wrote an insightful piece a couple of years ago, “Wall Street Mothers, Stay- Home Fathers” that features three senior women in my department.
  • Given that female enrollment in college is surpassing that of men, why aren’t we seeing increased pay parity?

Actually we are. The wage gap would be six percent higher if women were not out-achieving men educationally. But women are more likely than men to major in fields that pay less upon graduation — for example, education and social work versus computer science and engineering.

  • Talk about the role that cultural and societal expectations play. Is part of the problem that women don’t advocate for themselves or seek out sponsors? What remains unexplained about the gender pay gap?

Not advocating for oneself forcefully enough is certainly a factor. A well-known Carnegie Mellon study showed that men are four times more likely than women to ask for a raise and when women do ask, they typically request 30 percent less than men. This may be rational because women are viewed more negatively for asking! Of course, if you don’t ask, the answer is always “no.”

  • Another factor is women’s tolerance for risk and failure. There are many studies showing that men will apply for a job if they meet just 60 percent of the qualifications, while women feel they need to be 100 percent qualified. This fear of failure is a big factor holding women back.

And women tend to be over-mentored and under-sponsored. Mentors can be great sounding boards, but their influence on one’s career trajectory often ends with advice. On the other hand, sponsors tend to be senior executives who can publically advocate on behalf of their protégés and accelerate their advancement. Women are 50 percent less likely than men to have a sponsor.

Finally, women often don’t get the benefit of honest performance feedback because male managers are reluctant to provide it, fearing an “emotional response” or risk to their own careers.

  • Are there specific industries that perpetuate stereotypes and gender barriers?

I I have worked on Wall Street for most of my career, and it has certainly gotten a lot better, especially on the trading floor. But overall, hard-charging occupations like investment banking, private equity, venture capital and M&A are more difficult for anyone, not just women, who need more flexibility. One of the advantages of working in Research is that while there is a great deal of travel and frequent client dinners, there is no penalty for writing a research report at your kitchen table at 3 A.M. So even within hard-charging occupations, there are opportunities for flexibility.

  • What is the economic reasoning behind closing the gender gap?

Greater labor force participation — many women are now on the sidelines because after factoring in the cost of childcare (which has grown more than twice as fast as median household income), for many, it doesn’t pay to work. A McKinsey Global Institute study indicated that full gender equality could add 11% to 26% to global GDP by 2025 — a staggering $12 to $28 trillion. One positive factor is women returning to the workforce and working late into their 60’s and even 70’s. Nearly 30 percent of women aged 65-69 are working (up from 15 percent in the late 80’s).

  • How can businesses benefit from closing the gender pay gap? Do you think corporations are realizing this?

For businesses, closing the gender pay gap would not only attract more women but just as importantly help businesses retain the high-caliber women they already have by making it more economical for working moms to stay in the game. And of course there are countless studies showing that more diverse companies simply perform better — higher ROE, higher sales growth and stronger corporate oversight. That’s because they’re tapping into a deeper pool of talent that mirrors the diversity of their customers and discourages groupthink.

  • Are there any policy solutions — either in the legislative or private sector that would help to move the needle forward?

On the legislative front, I think it’s very interesting that the state of Massachusetts now makes it illegal to ask a job applicant about their prior compensation. This could be a huge step forward, since women are generally paid less and asking for prior compensation perpetuates the wage gap.

In the UK, companies with 250 or more employees must publish their gender pay gaps within the next year under a new legal requirement and will be encouraged to detail an action plan to address inequities.

In the private sector, shareholders can and should hold companies accountable. In fact, nine tech companies were asked by shareholders to study compensation and commit to closing the pay gap. Several of them publicly made commitments to do so. Amazon, Apple and Intel have reported that they’re near 100 percent pay parity.8

Diane Schumaker-Krieg is Global Head of Research, Economics and Strategy and leads all fundamental research across all sectors and asset classes for Wells Fargo.

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Closing the Investment Gap – Why Is It As Important as the Pay Gap?

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man-and-woman-standing-on-money-featuredBy Nicki Gilmour

Closing the investment gap for women as well as the better- documented pay gap needs to happen. What is the investment gap? And why are most women, even highly paid professional women still missing out? Sallie Krawcheck just wrote a post about the cost of not realizing what we are missing financially by not investing properly on LinkedIn.

Sallie is inviting theglasshammer.com readers to join Ellevest, her new women- orientated advisory for women (and men too) to close the investing gap. I caught up with Sallie this summer and she is someone who I admire greatly and Sallie is a woman who has been there, formidably at the top of the best financial institutions in the world for many years. I asked her why should we care about solving the investment gap?

Sallie responded,

“The investment gap is real and closing it is the best professional advice that nobody is telling you. We need to talk about the real costs of a career break and the real cost of earning less and investing less. We want to empower the individual. I am about unleashing the power.”

Why should we want both men and women managing our money?

A recent survey conducted by The CFA Institute called “Gender Diversity in Investment Management – New research for practitioners on how to close the gender gap” found that most female CFA members (70%) and nearly half of all CFA members in total (48%) believe that mixed gender teams of investment professionals lead to better investment performance results because of more diverse viewpoints.

Interestingly, these are the people who are involved in funds, and often run them directly. In the same survey, institutional investors also scored high in believing there was positive aspects to having a gender diverse team in place as seen in the California State Teachers’ Retirement System encouraging State Street Global Advisors to create the SSGA Gender Diversity Index ETF (ticker: SHE) in 2016 and seeded it with a $250 million investment.

Meanwhile, in the same study, retail investors were less convinced in the value of women working in wall street bringing higher returns with nearly 50% of those surveyed believing diversity does not matter when it comes to who manages money.

We can conclude from this that the people least close to the process saw the least value in it. That means people like you and me, and people who are not like you and me, can have a range of differing values, education and identities and yet have the same sexist ideas about who we think should lead companies and run money for us.

There is research including the most recent piece from Credit Suisse last week that suggests adding women makes a difference, obviously the right women, but we would say the same about men so we have to be careful to not over scrutinize this concept.

I am a fan of testing reality against research and Joe Keefe, President and CEO of Pax World Management LLC is a leader who is seeing real results.

We caught up last week and chatted about the Pax Ellevate Global Women’s Index Fund, which is chaired by Sallie Krawcheck, and has just reported a recent milestone, outperforming the MSCI World Index* for the two-year period ending June 30, 2016 and has $100 million in assets under management.

Joe is a man who gets it and one of the first men to grace our column of the same name. What is it that creates this higher performance when women are present in decision-making seats? Joe comments,

“I believe that having higher female representation at board and senior management level is a causal factor, not just a correlative factor, for higher performance because it is the entire corporate governance structure that tends to improve with women in place.

Pressing Joe on the finer details on being sure that the factor that drives the performance, he told me,

“We try to keep all other variables neutral to allow for an apples to apples comparison for performance analysis.” And added, “This is the only global index of its kind and beyond the research, this is real money from real investors in real time proving the point, not theory.”

How can we link investor gains to the talent pipeline inside firms?

As I reported earlier this year, rather than wait for companies to take action themselves or rely on legislation to be enacted, the Pax Ellevate Global Women’s Index Fund is the only global fund and the original index. State Street’s U.S. based SHE Index and other new funds also provide a way for people to fight the gender gap directly by investing in companies that put a premium on women in leadership positions.

Morgan Stanley launched a proprietary gender-diversity framework for ranking more than 1,600 stocks globally this year citing,

“Calls for more female participation in the economy have grown louder, often based on political or cultural arguments founded on fairness. Yet, a persuasive argument for diversity and equality can also be anchored to the bottom line, where ensuring that more women are working and leading in the workplace is simply good business, especially for investors who not only care about the ethics, but also want returns.”

To make sure this theory of ensuring more women are leading becomes action, the onus falls on three groups.

Group 1: The investors have to vote according to their belief in diversity. That means you and me as well as the institutional investors.

Group 2: The intermediaries need to better inform clients better and this could involve reducing the biases of some financial planners and advisors who regardless of being male or female harbor ideas and loyalties that do not help their clients.

Group 3: The other group that needs to do something to ensure that there are companies to list on these indices is of course the leaders and talent process people inside firms.

Sometimes the research on diversity enhancing performance is lost on gatekeepers such as financial advisors and consultants who often do not understand the importance of diversity. I have had a personal experience with that myself with a very “old fashioned” shall we say female advisor who told me point blank not to invest in a women’s fund (and could not seem to say the LGBT acronym). I asked Joe Keefe what to do in these situations and he told me that people should invest directly in the Pax fund or find advisors who understand the benefits of seeing the research in action.

Joe Keefe comments,

“I truly think that we are heading towards higher numbers of women on boards and in senior management teams, and I believe that we could reach 40/50% female representation in our lifetimes. More and more people are realizing that the research is right and the returns are there.”

Sallie Krawcheck, chair of the Pax Ellevate fund agrees,

“It is simply smart business to invest in women and we believe that this investment case will continue to be borne out over time by the performance of this Fund.”

Awareness is the first step, and people like Sallie Krawcheck and Joe Keefe are giving us the chance to put our money where our mouth is and maybe make up for that pay gap that most of us are experiencing (whether we choose to believe it or not.)

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Apples-to-Apples, the Gender Pay Gap Exists

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money money moneyThis week we hit “Equal Pay Day” on Tuesday, a day which symbolizes the extra days women must work to make the same salary as her male peers did last year.

According to the Demystifying The Gender Pay Gap survey by Glassdoor, the biggest myth about the gender pay gap is that it doesn’t exist at all, as 7 in 10 employees across seven countries assumed men and women received the same pay for the same work. But even when narrowed down to an apples-to-apples comparison within companies, researchers found a significant gender gap exists.

The Apples-to-Oranges Gap

Every time the gender pay gap comes up, it seems we have the apples-to-oranges data and the apples-to-apples data. Apples-to-oranges data compares men’s earnings to women’s earnings without breaking down the factors at play.

The recent Catalyst data summary of Women’s Earnings And Income reports that in the U.S. in 2014, women earned 79% as much as men in annual earnings. Based on Census data of median weekly earnings in 2015, full-time working women earned 81% as much as men, but only 72% as much within full-time management, professional, and related occupations.

Data has shown that female income tends to level off around age 35-40, as gendered workplace penalties reach full swing, while male income doesn’t level until 50-55 years old. The American Association of University Women reports that “women are typically paid about 90 percent of what men are paid until around the age of 35, at which point median earnings for women start to grow much more slowly than median earnings for men. From around age 35 through retirement, women are typically paid 75 to 80 percent of what men are paid.”

This difference has a significant impact on women’s lives, resulting in an average of $10,800 less in annual earnings, or nearly a half million dollars across a career, and a dramatically lower retirement security (44% less median income) for longer-living women, which ultimately spells an economy issue.

The Apples-to-Apples Gap

In their recent survey, Glassdoor created apples-to-apples salary comparisons by factoring in “differences in education, experience, age, location, job title, industry and even company.”

In the U.S, they found an apples-to-oranges 24% pay gap, or that women earned 76% as much as men. When they controlled for age, education, and years of experience, the gap was 19%.

When they looked at the same job title at the same employer at the same location, the highly “adjusted”apples-to-apples gap was still 5.4% – women earned 94.6 cents on the dollar of her male peer sitting next to her.

For a full-time working woman at median earnings, that’s a $2,140 loss per year. But for a woman who earns $100,000 a year, the loss is $5,400 annually.

The “adjusted gap”also increased with age – 6.2% at 35-44 years old, 9.5% at 45-54 years old, and 10.5% at 55-64 years old.

Among industries, the “adjusted”pay gap for insurance was among the biggest at 7.2% and finance was 6.4%. Among occupations, C-Suite professionals had one of the largest gender pay gaps (27.7%).

Apples-to-Oranges Is Still a Gender Bias Issue

Gender bias is still a significant driver of an apples and oranges comparison – it’s a big factor of the context that makes the difference exist at all.

According to Robert Hohman, CEO of Glassdoor, “occupational sorting”explains 54% of the overall “unadjusted”pay gap – the sorting of men and women into different industries and different roles in the economy, through non-subtle and subtle societal influences.

Education and experience were minor factors of explanation (14%). In fact, an April Gender Pay Inequality report from the U.S. Congress Joint Economic Committee stated, “The typical woman with a graduate degree earns $5,000 less than the typical man with a bachelor’s degree,”and that “women’s median earnings are lower at every level of education.”

Sincerity Is Transparency

The gender pay gap has been stagnant for the last decade 2006 to 2015 (change was 20 times faster in the preceding decade) and is not except to close until 2059.

Recent executive proposals by President Obama to target the gender pay gap by having the Equal Employment Opportunity Commission collect companies salary data has prompted reactions of government overreach, but the overall intention is to get targeted with a persistent problem.

As long as the persistent gender gap belongs to everyone, it belongs to nobody, and that’s why transparency matters. 70% of employees feel salary transparency is good for employee satisfaction and for business.

Certainly, a pointed finger sparks transparency, especially if it’s being pointed publicly or by shareholders, and especially if there’s nothing to hide. With the recent Glassdoor finding that female computer programmers experience one of the highest “adjusted”occupation pay gaps at 28.3%, the big names in Tech have been coming out to champion their equal pay.

On Monday, both Facebook and Microsoft announced publicly that men and women earn equally at their companies. Amazon and Apple have publicly stated similar findings based on employee pay surveys, prompted by shareholder proposals requesting disclosure of pay equity assessments, filed or co-filed by Pax World. Intel also shared their equal pay findings recently.

Now what if companies began to feel the same external pressure to disclose their C-Suite pay findings around that whopping 27.7% discrepancy?

When it comes to the gender pay gap, it seems the only real language of sincerity is indeed transparency, and companies have the chance now to use it.

By Aimee Hansen

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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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Narrow the Hidden Executive Pay Gap Starting Now

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Woman-on-a-ladder-searchingWomen reaching for the top rungs of the executive ladder will want to watch for the hidden pay gap. As Bloomberg writes, “Even top female workers can’t catch a break when it comes to pay inequality.”

As women move to senior ranks, the gender pay gap widens. Your best career management play? Begin closing it now.

A March 2015 study by the Federal Reserve Bank of New Yorkprovides insight into the hidden pay gap between top male and female executives. Based upon 1992-2005 S&P’s Execucomp data, it covers executive compensation in the S&P 500, the S&P Midcap 400, and the S&P SmallCap 600. The research focused on Chair/CEOs, Vice Chairs, Presidents, CFOs and COOs.

Less Incentive Pay

The researchers found 93% of the pay gap between male and female executives is due to disparate incentive pay – bonuses, stocks granted, and stock options.

Accumulating year upon year into “firm-specific wealth”, incentive pay encourages executives to elevate corporate performance. But the study found overall women executives reaped less of it. Pay disparities held true even when age, title, tenure and firm size were controlled for.

Pay Less Sensitive to Performance

The value of incentive pay such as stock options rises and falls with the company’s performance, but leading a firm to equal strong performance pays off more for men.

Researchers found that a $1 million increase in firm value increases firm specific wealth for a male executive by $17,150 but only $1,670 for a female executive (<10%), since, as

Bloomberg notes,women’s “incentive compensation tied to the company’s equity tends to be lower.”

Pay More Exposed to Under-Performance

Researchers found that pay sensitivity goes in the oppositedirection when firms under-perform: “Overall, changes in firm performance penalize female executives while they favor male executives.”

A one percent increase in firm value creates only a 13% increase in firm specific wealth for a female executive, but a 44% increase for a male executive.

But a one percent decline in value creates a 63% decline in firm-specific wealth for a woman executive, and only a 33% hit for a man. A female executive’s incentive pay is hit twice as hard for firm under-performance.

The researchers found no differences in firm performance by gender to explain pay disparities.

As Fivethirtyeight writes, “Male CEOS get bonuses; female CEOS get blame.”

Less Influence On Pay?

The researchers theorize that men hold more insider purse strings, such as greater influence with Board Members and influence on their compensation.

CFOsummarizes the authors speculation stating the gender gap “does not reflect executive performance but ‘different degrees of managerial power of female and male executives,’ with women ‘less entrenched’, than men and exerting less control over their compensation due to limited access to informal networks, gender stereotyping, and an inhospitable corporate culture, along with their younger age and lower tenure.”

Bloomberg writes, “Men, on the other hand, who are more entrenched in an organization and can cash in favors after years in the industry, are more likely to be able to steer their pay in a way that’s more favorable for them.”

Change Means Transparency

Compensation would not remain one of the hidden, insidious biases still alive in the old boy’s club if met with disclosure.

The researchers call for greater transparency.

They write, “Our analysis suggest that performance pay schemes should be held to closer scrutiny and raises a note of concern for the standing of professional women in the labor market as incentive pay becomes more prevalent.”

Co-author Stefania Albanesi told Bloomberg, “increasing transparency in general in an organization but specifically with how your pay is set relative to others in similar positions is going to be helpful.”

Albanesi notes that it’s important to get transparency sooner. The gap doesn’t magically appear at executive level – it compounds. As incentive pay popularizes at lower ranks, disparities will build annually so inequality has to be addressed early.

“The accumulation is going to be there even when women get promoted, and also possibly if you move to another firm, because usually your past compensation is used in some degree,” Albanesi said. “These differences can be very, very persistent.”

Brave the Discussion

Women can’t afford to keep quiet about pay.

The systemic gap is unlikely to change as long as having children results in a cascading impact on salaries and opportunities for women. Increasing pressure to offer temporal flexibility and returner programs is essential.

But at an individual level, you can push for transparency and initiate the conversation of negotiating your compensation.

As Business Insider points out, women may face a “social cost” of negotiating salary but they can’t afford not to negotiate. Settling early compounds to highly significant salary differences later in your career.

According to Forbes, in a study for her book Women Don’t Ask, Stanford’s Margaret A. Neale found only seven percent of women MBAs negotiated their job offer salary compared to 57% of men MBAs.

Neale explains that if one person negotiates a $7,000 rise on a $100,000 offer and another settles, then 35 years later that $7,000 gap equates to a difference of eight working years to accumulate the same wealth, and that’s if both people experience identical raises and promotions in their career.

When women don’t negotiate, they affirm the pay gap status quo. Strategic salary negotiation is a career and gender equality move.

Let’s bring the pay gap out of the entrenched corner (offices) it hides in and put it on the table.

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