An MBA can boost a woman’s salary but more than 63% but does little to close the gender pay gap unless you work in marketing, according to a new survey of MBA graduates.
The online survey of 900 male and female MBA alumni who graduated between 2005-2017, was conducted by Forté Foundation and led by Michelle Wieser, Interim Dean, School of Business, St. Catherine University.
Key highlights of the survey include:
- Women earn less than men in their last pre-MBA job – and the pay gap does not improve post MBA. On average, women earned 3% less than their male counterparts pre-MBA, the gap widens to 10% for first post-MBA position, and 28% for current compensation, adjusted for years of experience.
- Despite the gender pay gap, the data show a positive return on investment from the MBA with an over 63% salary bump (76% for men), or higher, for both minority and non-minority women and men.
- Women with an MBA don’t advance to the same level as men, have fewer direct reports, and less job satisfaction.
- Around 40% of respondents, primarily women, say they’ve experienced a gender pay gap. How do they combat it? The top responses were: “I have not taken action and do not intend to” and “I left the company.”
“It’s encouraging to see an MBA provides greater economic mobility for women and minorities and narrows the pay gap for minorities in their first job post MBA,” said Elissa Sangster, CEO, Forté Foundation, “but the whopping gender pay gap and income disparity for women and minorities needs to be addressed, and soon.”
“While some salary disparity can be explained by the job functions women choose, there is likely unconscious bias and other factors at play,” Sangster added.
“When we asked women MBAs how they intend to address the gender pay gap they’ve experienced, it’s more common for them to leave the company rather than speak about it with their manager, human resources or company leadership. This is a wake-up call — companies need to take proactive steps to lessen the pay gap, or risk losing highly-skilled women employees.”
Participants in the study were also asked to provide their current job function which allowed a deep dive into what might be driving the gender pay gap with current compensation.
The job functions shown to contribute the most to the gap are Finance (60% gap) and Operations (48% gap). Marketing is the only function where women were shown to earn more than men (2%).
Interestingly, women significantly outnumber men in Marketing and Human Resources, while men outnumber women in Finance, General Management, Consulting, and IT.
Forté Foundation is a non-profit consortium of leading multinational corporations, top business schools in the US and abroad, and the Graduate Management Admission Council. Its mission is to launch women into fulfilling, significant careers through access to business education, opportunities and a community of successful women.
Forté is the leading organisation that provides a national infrastructure for women at all stages of the career continuum to access the information, scholarship support and networking connections they need to succeed in
business careers. Additional information about the Forté Foundation is available online at www.fortefoundation.org.