Catalyst: Women MBAs Lag Behind Men in Jobs, Pay, Promotions

Posted by: Louis Lavelle on March 3, 2010

There’s a really interesting, albeit not all that surprising, report from Catalyst, the group working to expand opportunities for women in business.

In 2007 and 2008, Catalyst surveyed 9,927 alumni who graduated from 26 leading business schools in Asia, Canada, Europe, and the United States. Less than half, 4,143, were men and women who graduated from full-time MBA programs and were working full-time at the time of the survey. The goal was to find how women with MBAs fared (relative to men) in terms of pay and career trajectory after receiving their degrees.

The answer: not well. Even after correcting for years of experience, industry, and global region, Catalyst found that women were more likely than men to start their first post-MBA job at a lower level. That basic finding held even when considering only men and women who aspired to senior executive level positions, and even among survey respondents who did not have children. Overall, 60% of women started on the post-MBA career ladder at the lowest of rungs, entry-level positions. For men, that number was 46%.

Men also had higher starting salaries than women—even after taking all the same factors into account. Overall, men had a pay premium in their first post-MBA jobs of $4,600.

It would be nice to think that once hired women eventually catch up to men on the career ladder, but you'd be wrong. Catalyst also found that at the time of the survey men were twice as likely to have reached the CEO/senior executive level, and had higher salary growth. Even among men and women who started in entry-level positions and were otherwise identical in all ways that matter (received their MBAs in the same year, had the same amount of experience), men still outpaced women in terms of promotions and pay.

The numbers are depressing, and the authors of the report, Nancy M. Carter and Christine Silva, were as depressed as anyone by the findings. They wrote:

Companies pinned hopes on these on these highly trained graduates from elite MBA programs to help navigate through the white-water of the global economy. With the same prestigious credentials, one would expect these women and men to be on equal footing in the pipeline and their career trajectories gender-blind. What emerged, however, is evidence that the pipeline is in peril--one that, for women, is not as promising as expected.

While the overall results of the study are not all that surprising (who hasn't heard the statistic that women earn only 75 cents for every dollar men earn?), what is surprising, at least to me, is that this pay gap doesn't disappear when examining groups of "high potentials" who are virtually identical except for gender. After all, the typical rationales for the pay gap are things like career choices, interrupted work histories caused by motherhood, and other factors specific to women. Correct for them, and at least theoretically, you should get perfect parity. But you don't. So something else must be at work--either something nefarious, like discrimination against women, or something we haven't thought of yet.

I also find this interesting in connection with the statistics about the number of women pursuing MBAs, which now hovers somewhere around 30% at top full-time MBA programs. The usual explanation for this has always been that women are reluctant to enroll in full-time programs in their late 20s because they're busy starting families. But maybe something else is at work. If you take the Catalyst research at face value, then maybe some women already knew what Catalyst is just now discovering and are making a rational economic choice instead. If pay and career trajectories for women really are not all they're cracked up to be, then maybe forking over $300 grand for a top-tier MBA just isn't worth it.

Food for thought. Are there any female MBAs who feel that they've been passed over for raises or promotions in favor of men, or who feel the game is somehow rigged in men's favor? Please tell us your stories.

Reader Comments

Not Sure

March 3, 2010 2:40 PM

Quit sensationalizing. Catalyst, a "group working to expand opportunities for women in business"....this is your unbiased source?

From the report: “The top reason for leaving the first post-MBA job was career advancement. The top reason women and men left their first post-MBA job was for faster career advancement, men more so than women. More men than women said they left to earn more money or receive better benefits. More women than men said they left because of a difficult manager.” So, according to this report, if you switch jobs for career advancement and better compensation, you’re more likely to be better compensated and achieve greater career advancement than someone who switches jobs because of personality conflicts. This is discrimination?

This survey doesn’t include benefits like paid time off and sick leave? Wonder why?

How about hours worked per week? They seem to have “forgotten” to include that, too. A less biased source of data (the US Bureau of Labor Statistics) may be able to help here:
“On the days that they worked, employed men worked about 0.9 hour (52 minutes) more than employed women. This difference partly reflects women's greater likelihood of working part time. However, even among full-time workers (those usually working 35 hours or more per week), men worked longer than women--8.3 versus 7.7 hours.” (http://www.bls.gov/news.release/atus.nr0.htm)

The media needs to stop portraying garbage spun from special interest groups as fact.

BW's Louis Lavelle

March 3, 2010 3:35 PM

First, who said Catalyst was an unbiased source? I didn't. In fact, that's why I included the description of Catalyst...so readers know it has an agenda. Second, who portrayed the survey findings as fact? Again, not I. If that were my goal, I probably wouldn't have said: "if you take the...research at face value..." I would have just taken it at face value.

You point out a couple of possible shortcomings in the study, but your entire argument hinges on facts that may or may not be true. You imply that women take more time off, but provide no evidence that that's true, or even meaningful. And the BLS data you cite is for all employed men and all employed women--you have no idea if the BLS findings are true for MBA grads from top universities.

Even if the difference in hours worked is the same for these MBA grads, are you seriously suggesting that women deserve to be passed over for raises and promotions because men work an extra 36 minutes a day? I wonder what all the hard-working female MBAs out there have to say about that.

Louis Lavelle
Associate Editor
Bloomberg BusinessWeek

On the Mark

March 5, 2010 11:09 AM

You are 100% on the money so to speak. I completed my MBA in 1998 from Kenan Flagler at UNC-Chapel Hill (certainly not a second tier school), and did not see an immediate trajectory in my career. In fact, I was told in no uncertain terms "not to wear the degree on my sleeve." I had a male counterpart who completed his degree a few years later (not at KFBS or an equivalent) and he was offered an opportunity out of the gate to move into Corporate Finance. I had more experience than he did, even before I completed mine, and was told those jobs were not for me. I have (obviously) left that organization, but continue to see my MBA not considered a deal-breaker at all.

I also know of a bank who had different pay scales for women and men. The challenge is that pay is considered personal and confidential, so you really cannot do a proper analysis of disparate pay rates. But it DOES exist.

I did take 3 months off with each of my children (3), but during the preganancy had as good or better of an attendance record. And when I returned, I have always come back as committed as always. The other factor in "time off" is that women are still the primary caregivers for not only children, but also aging parents. We bear the majority of the responsibility for affairs at home and at work.

Great article and even though, as you mention, the Catalyst group may have an agenda, the spirit of the research is completely on track. Maybe if it is discussed enough times, it will make a difference.

Thanks for continuing the conversation.

A Frustrated Engineer

March 5, 2010 11:13 AM

Absolutely. I am currently an engineer in an IT department, waiting to hear back regarding admission to business school. I have 6 years of work experience - 4 at the current company - as well as a Masters in Computer Science. In the past 4 years here, I have put in long hours (averaging 9 hour days) to turn around several failing, multi-million dollar projects, often as the least experienced member of the project team. While these accomplishments have been praised in performance evaluations each year, they have failed to result in promotion to a title on par with my efforts.

At the same time, a male colleague with a Bachelors degree and 5 years of work experience - all at this same company - has been promoted 3 times over the past 4 years and is 3 levels above me. Initially, I assumed he had built more of the systems or had acquired some in depth business knowledge that I lacked but have since learned that he has only contributed to 1 or 2 systems during his time here. Obviously one can't extrapolate too much from a personal example, but it is frustrating.

Similarly, I accepted my first engineering job from a summer internship. After becoming friends with other male new hires, I learned that my starting salary was $2,500 less than theirs, despite my internship experience and a 4.0 undergraduate GPA in Computer Science.

Whatever the cause, I believe there is truth to this study. And I certainly don't believe the problem is limited to women in business.

BW's Louis Lavelle

March 5, 2010 4:49 PM

On the Mark and A Frustrated Engineer, thanks so much for sharing your stories. They certainly help explain why so many smart, talented, hard-working women get fed up with the corporate world. It's one thing to work hard day after day and get rewarded for it, as the men in your stories obviously did. It's another thing altogether to put in the same amount of work (or more) and get passed over for the raises and promotions that are your due. I hope both of you end up working for an employer that truly appreciates the work you do. Second class corporate citizenship based on gender isn't something that should be allowed by companies, or tolerated by women. Best of luck in your careers.

Louis Lavelle
Associate Editor
Bloomberg BusinessWeek

Raoul

March 9, 2010 3:35 AM

Instead of complaining,

"The numbers are depressing, and the authors of the report, Nancy M. Carter and Christine Silva, were as depressed as anyone by the findings."

" So something else must be at work--either something nefarious, like discrimination against women, or something we haven't thought of yet."

why don't some of these business oriented women start their own businesses and apply fair practices?

do you get the same picture in businesses run or controlled by women?

RC

March 9, 2010 2:14 PM


I agree with the results of the study. However, one could argue that part of this attributed to how aggressively one has pursued the opportunities and negotiated the offers. On average men are more aggressive. In a fair world one would be rewarded on merit, however it seems that in the capitalistic corporate world you have to fight for your promotions / raises.

For eg., when my wife got a job offer, I told her that she needs to go back with a counter offer and sort of outline a strategy to try and maximize the offer. She listened patiently and said that we have only one problem. "I already accepted"

How women do we know, have decided their shopping decision based on money.

Another good example would be to look at car purchases. I would like to see the data set on average price discount son negotiated on cars when separated by gender.

The bottomline is I do agree that women have a difficult time in the corporate world but on average, but men probably whine and put up more of a fight to get the bigger pay checks.

Anonymous

March 10, 2010 7:45 AM

Sometimes I think women are harder on other women than men. Several years ago I worked at a company that was owned and managed by women. I started in an entry level position within the same month as my male counterpart. We had similar work experience (practically none). The differences between us: I went to a school ranked in the top 5, he went to a 2nd tier. I graduaded with a higher GPA than he did. I worked 50-60 hours a week, he worked 40. Guess what, he still made $5,000 more than I did. When I found, I approached the VP she was so shocked and embarrased that I had found out, she could never look me in the eye after that. She gave me the $5,000 right away, but our working relationship was ruined.

A Female MBA Candidate

March 11, 2010 3:39 PM

I think RC is dead on. Women are raised to be kind, polite, nurturing. While we aren't ALL like that 100% of the time, it is easy to see why when it comes to aggressive negotiations, men see better results. Also, many men may have the added incentive of needing to provide for a family. Many women can look at their salaries as 'gravy' so that extra $5,000 isn't necessary, but it's nice to have.

Maybe what we should do is start teaching women early on that being aggressive/assertive doesn't make you a bad woman. Teach better negotiating skills earlier in school (I took my first negotiating class as a second year MBA student). Or, maybe it's ok to let each woman take personal responsibility for what she makes and how far up the ladder she climbs. Work experience, projects completed, degrees earned, there is still an aspect that can't be measured in studies like these: leadership.

Sara, an outsider

March 11, 2010 5:08 PM

I am a woman with an MBA from a top 5 business school working in advertising. You'd think that working in a field like this, where men and women seem to take entry level jobs with equal frequency, that high potential women would flourish... however, this is really not the case. I've been through a series of senior positions at a series of companies where men reward other men with raises and promotions while women get passed over or put into dead end roles. Male C-level executives openly call female executives "bitchy" "aggressive" and "not team oriented". To the last commenter's point, perhaps it isn't the women that need to be educated but the men.

I don't regret getting my MBA but I wonder if my expectations for my own career are too high?

Jennifer B

March 11, 2010 11:01 PM

I recommend the book ‘Necessary Dreams: Ambition in Women’s Changing Lives’. The book looks at the research on what happens to high-achieving women in the work force, and it isn’t pretty. Ambitious women are generally tolerated, even encouraged, when young, but then resented and passed over after a certain age. This is true even when the usual culprits are controlled for: maternity leave, childcare, etc.

The conclusion of the book is that ambitious women who are looking for fulfilling careers leave male dominated corporations and instead start their own businesses. It’s advice I’ve taken to heart.

Concerned Second Year MBA

March 12, 2010 12:18 AM

I'm definitely concerned by this Catalyst report and some of the personal stories posted here. I am an African American woman (double whammie) and my goal for my career is to be the CEO of a Fortune 500 or start my own corporation. Yes, I know...big lofty goals! But I was hoping that by now...2010...things would have changed, but I see that the more things seem to change the more they stay the same. Well, I plan to fight the good fight, I plan to be very agressive and if they call me a Bitch so be it as long as they call me the HBIC (Head Bitch In Charge). Ladies, against all odds, we can do all things.

facts

March 12, 2010 12:21 PM

In 2007 the Wall Street Journal collected data from business schools on mean and median compensation for the class of 2005 MBAs by sex. My institution, an elite b-school, reported mean male total compensation was 19% greater than female total compensation, and median compensation was 12% higher for men. Starting salary similarly favored males; the mean annual base salary was 9% higher for males, the median 5% higher for males.
I found this difference interesting, if not remarkable at the time, but I don’t believe the WSJ published this information for the business school rankings at the time, and I found the omission curious.

BW's Louis Lavelle

March 12, 2010 1:18 PM

I really want to thank everyone for sharing their stories...they've been a little depressing to read (in terms of the treatment you've received) but also inspiring. Concerned 2nd Year MBA, I'm glad to hear you haven't given up your big lofty goals, and I hope the same is true for everyone else--giving up is the one guaranteed way not to achieve them. Facts, I don't recall the Wall Street Journal story you referenced, but I know that BW once tried something similar. In 2002, my predecessor as b-schools editor surveyed the members of the MBA class of '92 (30 top schools) on their career progression since receiving their degrees. I'm sure we sliced and diced the data by gender, but I can't seem to find it on the BW site...it looks like it's no longer on our server. It was called "What's an MBA Really Worth?" If anyone has a working link, please post it here. Thanks all.

Facts

March 12, 2010 3:09 PM

http://www.gsb.stanford.edu/jacksonlibrary/articles/hottopics/pfeffer.html

the above site contains the full text of the article you are looking for by Jennifer Merritt - BW 9/22/2003

Facts

March 12, 2010 3:15 PM

http://www.gsb.stanford.edu/jacksonlibrary/articles/hottopics/pfeffer.html

the above site contains the full text of the article you are looking for by Jennifer Merritt - BW 9/22/2003

Bubba

April 15, 2010 2:38 PM

First, Catalyst claims they controlled for variables such as years experience, but we don't see the data. Second, $4,600 variance, on what average? $60k, $80k, $100k? That respresents only 5-10% variability. This sounds like a lot, but the error margin on the study itself is probably larger than that.

Personality traits are probably the biggest issue. Aggressiveness has been discussed, but the bigger one is probably "likableness". People hire and promote those they like, plain and simple.

Limited sample pool. the problem is in every "story" you are only comparing 1 woman to 1 man. for every woman that says "I was passed over for a man", could it bee that other males in the group also didn't get that promotion? does every company on the planet consists of groups of 2, 1 man and 1 woman? No. So if the average team is 4 men and 1 woman and 80% of the time a man is promoted (or given a raise), does this not fall in line with the law of averages instead of some gender-based conspiracy?

I'm shocked by the MBA folks in here that are overlooking these larger group dynamic and statistical issues.

TTT

January 31, 2011 3:28 AM

The statistic is that 'women earn just 75% of what men do for the same job' is so bogus that no serious business publication would publish it. Clearly, BBW is no longer a serious publication.

There are tons and tons of studies debunking that tired old lie, on top of basic common sense that anyone who has actually worked in the private sector would have.

The real truth is :
"Women earn 75% of what men earn, for doing just 50% of the work that men do."

So women are actually paid MORE than men. Yes, more.

Joop

January 31, 2011 10:49 PM

I agree - the tired old lie that 'women are paid just 77% of men for the same job' is so heavily debunked (and easily disproven by basic real-world observation), that any MBA who actually believes it has disqualified themselves from any pretense of having a business education.

No one can call themselves qualified to work in a merit-based business setting, while still believing that absurd myth.

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