Gender Pay Gap: Whose Decisions Dig the Divide?

A new study finds that much of the gap in pay inequities between men and women can be traced back to their own choices about careers and job choices. Still, HR professionals can play a role in helping to overcome long-standing misconceptions about gender-based roles.

Tuesday, November 27, 2012
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The gap between male and female salaries has been the subject of debate and discussion for many years. Recently, two researchers conducted a study which focused on the role of applicants' choices in the job search process and how those choices may impact pay. Research subjects included 1,255 men and women entering the job market after graduating from a large, elite, one-year international MBA program.

The focus of the researchers, Matthew Bidwell and Roxana Barbulescu, was on industries and jobs at the highest levels of pay, and they considered ways in which the men and women sorted themselves out of job opportunities -- or were sorted out by recruiters, focusing specifically on Wall Street-type investment-banking and consulting jobs.

Matthew Bidwell, an assistant professor at The Wharton School in Philadelphia, says "the reason why we thought it was an interesting question is a lot of people are interested in this phenomenon called gender segregation."

Gender segregation, he says, suggests there are certain jobs which tend to be disproportionately occupied by women and others which tend to be disproportionately occupied by men. People are interested in why, he says. They're particularly interested in why because of issues related to pay. It tends to be that jobs that are more likely to be occupied by men pay better.

The difference between men and women's pay in the United States is about 20 percent, says Bidwell. About half of this difference can be explained by differences in the kinds of jobs they go into.

The two broad hypotheses are discrimination of one kind or another, or that different people simply like different work. "It's quite hard to tell those stories apart because usually what we see are the jobs that people end up in."

He says he and Barbulescu had a very unique opportunity to look at the issue because they could look at both the kinds of jobs people were applying to and where they were being offered jobs. 

What they found, says Barbulescu, an assistant professor at McGill University in Montreal, was surprising. "When women seek to have the same opportunities, there are some barriers that they themselves see, whereas other people -- men, for example -- may not perceive." 

Their results, she says, suggest that it's not necessarily the hiring process itself that leads to issues of discrimination, that in fact many legislative changes have had a positive impact on these issues. Instead, she suggests, companies need to be taking a larger look at what's happening and see what else about their companies may be keeping women from applying.

What are the workplace cultures in place? What is the culture like? How do women perceive the organization and do they see themselves fitting into the company?

"When we construct a set of choices in our minds in terms of the kinds of things we would like to pursue -- organizations, occupations, specific kinds of workplace, people make certain selections in terms of how they include objects in that set," says Barbulescu. "What we're finding is that some of that selection is also based on the notion of how compatible the workplace is in terms of how people see themselves, particularly in terms of their gender." Some organizations, she notes, may be seen as being more family-friendly. Others may be more closely associated, by both men and women, as having more stereotypical male environments. Those more stereotypical male environments, she says, can be a turnoff for women.

"In our study, this was the case for Wall Street types of jobs," she says.

These results, says Alan Johnson, managing director of Johnson Associates, a New York-based compensation consulting firm that caters to Wall Street and investment-banking firms, are "actually quite consistent" with other academic studies done in the past.

"The majors that people choose or the lifestyle choices that people make, economically, for a long time have been found to be huge factors in the differences of pay," he says. "I think the difference for society is that that doesn't feel fair, necessarily, but it is kind of the economic outcome."

At an individual level, however, there's not a lot that can be done to remedy the inequities on a broad scale, other than to have individuals become aware that the choices they make -- in terms of where they go to school, what majors they pursue, and what types of occupations and industries they are drawn -- to will have an impact on their overall earning power, he says.

Employers, though, can and should be taking steps to both ensure that their pay is equitable internally and that they are taking steps to recruit, attract and retain employees not only regardless of gender, but regardless of sexual orientation, veteran status and other protected classes.

The American Association of University Women in Washington publishes gender-gap reports twice a year in The Simple Truth About The Gender Pay Gap. The most recent report indicates that, in 2011, women working full time in the United States typically earned just 77 percent of what men earned, a gap of 23 percent, says Christi Corbett, a research associate at the organization.

She says she agrees with the study authors' perspective that part of the pay gap between men and women is related to gender segregation in jobs. "It seems like what an employer could do, if they wanted to attract more women, is actively recruit women and put together a campaign to encourage more women to apply."

Corbett recalls a study of women in engineering programs at various colleges, saying: "Some schools get a lot more applications than others. So, one of the recommendations that came out of that report is for schools to actually recruit women because a lot of times people just choose from those who apply."

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The same holds true for employers, she says: "If they want to have higher numbers of women in their organizations, they can go out and recruit them."

A first step for HR professionals, suggests Barvulescu, is taking a close look at the kind of language that is being used in materials to promote the company. Organizations, she says, should strive "to depict the workplace in more gender neutral terms and show that the workplace can be a place where both men and women feel at home." This might include referencing programs that provide work/life flexibility and accommodation.

Bidwell agrees, acknowledging that these issues can be tough to address because the attitudes are so ingrained. "These things are really quite hard to fix because they draw upon a quite ingrained sense of belief," he says.

A woman might think: "It's going to be hard for me to get hired into this type of job and I'm not sure it's really the type of thing I want to do, because it really doesn't fit with how I see what I can be doing as a woman."

Men have similar perceptions about jobs for which they are best suited. Organizations that have positions that tend to be seen as very gender-specific, in either direction, should make more of an effort to reach out to that opposite sex, he says.

The solution isn't a simple one, agrees Laura Fries, an executive vice president with DHR International, an executive-search firm based in Chicago. It's one that requires a sound and comprehensive strategy that starts at the top. "One-off solutions do not succeed."

She says she has seen companies in male-dominant industries -- such as accounting -- successfully navigate these issues through "a comprehensive paradigm shift and options and tools for women to use so that they can succeed in attracting more women, promoting more women and having more women in the absolute top leadership."

In her work as a recruiter, she says, she is seeing a change and a concerted shift in culture and approach.

"I will tell you that I specialize in diversity in executive search and some of the premiere organizations in the United States are coming to us showing their strategy for increasing women in either mid-management or executive leadership roles and they're asking for our assistance for certain positions. But they're coming at it not from just a war for talent approach -- they're coming at it from 'We have changed our culture, we have a great story to tell, we have role models and we want more women to tap into those role models.' So I am definitely seeing that."

It is important for employers to evaluate their own situation, says Johnson, and that's something that can be easily done.

"If you're not an employer of choice and your gender balance or pay levels can't be explained," says Johnson. "I think you should figure that out and fix it because, by definition, you're losing a lot of talented people."

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