For women who want to get ahead, getting an MBA will help. But it will help men far more.
A global study into salary levels among 900 business school alumni found that the gender pay gap widened from 3 per cent before candidates started their MBA to 28 per cent five years after graduation.
The salary lift among MBA graduates was substantial regardless of gender, according to figures compiled by the Forté Foundation, which campaigns for greater gender balance on MBA courses.
Salaries on average rose 63 per cent five years after graduation among the survey’s female respondents to $152,806. Their male counterparts, however, averaged a 76 per cent lift during the same period to $211,800.
Men also led larger teams five years after graduation than women, averaging 3.3 direct reports, compared with 1.8 among the female survey respondents.
Having an MBA was better news for people from minority groups. The pay divide between white students and those from black, Hispanic or Latin American backgrounds narrowed from 24 per cent pre-MBA to 12 per cent in current roles.
Reducing the gender pay divide required a change in perceptions among students as well as employers, according to Michelle Wieser, acting dean of the business school at St Catherine’s University in Minnesota, who led the research project.
“We need coaches and careers advisers to play a role to help women prepare themselves for negotiating pay,” she said. “Men have traditionally done a better job at that.”
Apathy among those suffering lower pay was an important issue, Ms Wieser added. Four in ten of those who completed the Forté survey said they were the victim of pay discrimination. Most responded by leaving the company.
Gender pay differences were partly a reflection of the industries where MBA graduates worked, the research concluded.
For instance, more women than men work in finance but men earn 60 per cent more on average than women.
Technology jobs generated one of the smallest gender pay gaps, but far fewer women than men worked in this sector.
The job functions that have the greatest gender balance in pay were those where women had already achieved the most leadership positions. In marketing, the only function in the survey where women earn more money than men, there are more female leaders.
In the consultancy industry, the widening of the gender pay divide was explained by the greater speed that men reached senior ranks, rather than different pay being offered at each level, according to Namaan Mian from Management Consulted, which compiles data on the industry’s pay.
“An average man who has eight years of post-MBA experience usually makes partner on schedule,” Mr Mian said.
“But an average woman who has the same official tenure from start date is more likely to have taken extra time off or worked part-time during that same period, and thus it will take her maybe 10 years to make partner.”
