Can an MBA help with long-term pay equity for women? |

Can an MBA help with long-term pay equity for women?

By Guest Writer

Updated July 12, 2023 Updated July 12, 2023

Written by Dr Bernice Ledbetter, founding director of the Center for Women in Leadership at Pepperdine Graziadio Business School.

A recent study from the Forte Foundation, a women’s leadership organisation, found that earning an MBA can boost pay for women and minorities in their first post-MBA job by 57 percent or more.  

Previous Forte research showed that women who obtain their MBA see a 55 to 65 percent increase compared to their pre-MBA earnings, within five years of graduating. Despite these early-career benefits of an MBA, Forte noted that pay gaps by gender and race tend to emerge and widen later in women’s careers. 

In comparison to men, women’s earnings between the age of 30 and 55 in the US are 30 percent lower – the fourth highest gender gap in the world, according to a recent University of California, Irvine study.  

It’s no secret that women face greater challenges in obtaining higher wages and upward mobility in their careers due to persistent gender biases and prejudices. Addressing these challenges requires a comprehensive strategy because there is no individual approach to equalising pay for women in the workplace.  

Responsibility can’t land solely on women 

For certain, the primary responsibility to drive change should not fall solely on women and minorities. Senior management plays a crucial role in making compensation fair by implementing proactive measures to ensure equity.  

Senior managers should conduct regular pay audits to identify and rectify gender pay gaps within the organisation and establish transparent salary bands and criteria based on skills, experience, and qualifications. Implementing policies that promote pay negotiation training and eliminate salary history inquiries can also help mitigate the impact of gender biases.  

Corporate boards can ensure equal pay for women within the organisations they serve by requiring a comprehensive pay equity policy that sets clear guidelines and targets for closing the gender pay gap, and by advancing transparency and accountability in publicly disclosing pay data. Corporate boards can also task their nominating committees to prioritise diversity and inclusion because gender-balanced representation at the highest level fosters an environment that values and rewards equal pay.   

Resources and support for initiatives like mentorship programmes and leadership development for women can further empower them to advance in their careers and bridge the pay gap. 

We should expect these practices from senior management as a minimum. 

With a sound salary management approach in place, women are well positioned to use their training and experience to take advantage of a level playing field.  Here are some insights to aid women pursuing their MBAs: 

Consider early-career MBA training 

Early career training provides numerous benefits including gaining essential skills, better access to “first-rung” or early career opportunities, accelerating professional growth, and enhancing job prospects by establishing strong, long-term, foundational skills.  

Earning an MBA early in your career can result in higher starting salaries and increased earning potential over the long term. Delaying an MBA can cost women in pay significantly with less likelihood of making up that loss over the course of your careers.  

Pursuing a full-time MBA is the fastest route to a graduate business degree. However, a part-time MBA can give women options to accelerate or reduce course loads depending on work and family obligations. Knowing that the historic unemployment rate in the US is nearly 30% lower for those with a master’s versus bachelor’s degree, if a job offer is rescinded or a woman is laid off, it’s more likely she will be hired quickly if she is pursuing or has completed an MBA.    

Consider the composition of senior management and the board 

According to the Forte Foundation research, women account for only 17 percent of executives in boardrooms and 4.8 percent of CEOs at Fortune 500 companies. However, companies with greater representation of women in leadership achieve a 53 percent higher return on equity and 42 percent higher return on sales.  

Women pursuing MBAs should consider the composition of senior management at top companies when deciding to join an organisation as women and minority senior management creates a culture that promotes equal opportunities, mentorship and sponsorship, leading to greater advancement and success for women in their careers. 

Understand salary negotiations 

Women in the job market should research market rates, be able to express qualifications and achievements, and confidently articulate value to the employer. With that information, women can be bold in asking for higher salaries.  

According to recent research from the Pew Research Center, men are more likely than women (32 percent vs. 28 percent) to say they asked for higher pay than what was offered. Working with faculty, mentors and peers can enable women to effectively navigate compensation discussions and secure salaries proportional with skills and contributions.   

Continually acquire new skills and knowledge 

Those who undergo further training before entering the job market generally obtain higher wages and face unemployment less often, according to research from the University of Paris (Sorbonne).  

Building a strong history of accomplishments, seeking additional responsibilities and demonstrating exceptional performance can also strengthen the case for promotions and salary increases.  

Women who cultivate a network, seek mentorship and self-advocate can open doors to new opportunities and higher-paying roles. 

Capture and market successes 

Beyond creating a compelling CV and LinkedIn profile, women should seek to share accomplishments internally and externally, and effectively communicate the value they bring.  

Maintaining a comprehensive record of achievements and quantifying results whenever possible is a great way to be prepared for exampling your worth.  

Seeking outside-the-office exposure opportunities such as speaking at industry events, writing for trade publications, and maintaining a personal website featuring personal accomplishments can help to develop a professional reputation and attract positive attention.  

Consider the worth of a salary increase 

It’s important to note that salary increases are not always worth it. If a career move comes with a detrimental impact on work-life balance, lack of growth opportunities, or limited professional development, the best course may be to forgo higher pay.  

Adverse behaviors like backstabbing, credit snatching, and blame gaming are also an unfortunate reality in the workplace. For women, a toxic office is often a one-way ticket out the door. According to a recent Pepperdine Graziadio Business School survey of 800 professionals, women (29 percent) are more likely than men (19 percent ) to say office politics has caused them to leave an employer.   

Nevertheless, salary gender equity is a legitimate concern. Over the long term, higher salaries mean improved financial security, the ability to invest in personal and professional growth, enhanced quality of life, and the potential for long-term wealth accumulation.  

Earning an MBA can aid in credibility, stability, and the freedom for women to pursue their dreams.  

Dr. Bernice Ledbetter, EdD serves as dean of students at the Pepperdine Graziadio Business School; she is the founding director of the Center for Women in Leadership (CWL) and serves as practitioner faculty of organizational theory and management, where she teaches graduate-level courses in leadership across a range of leadership topics.  

This article was originally published in July 2023 .

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