The Forté Foundation, a nonprofit organization guiding women into business leadership through access to business education, released its most recent study on the MBA gender pay and promotion gap, barriers to women in leadership, and disparity in work-life issues. The report highlights the progress made — and candidly confronts the daunting mission ahead.
Key Findings of the Latest Forté Foundation Research
“The gender pay gap has narrowed since 2016 and 2018, but has not budged during the pandemic despite calls for pay equity and transparency,” says Forté CEO Elissa Sangster.
While women, men, and underrepresented minorities all see an initial post-MBA job salary boost, gaps already exist and widen by gender and race as careers progress, according to Forté’s research. Pre-MBA, there is an eight percent pay gap in men’s favor compared to women, which works out to an average difference of $6,864 annually. The first post-MBA job sees the gender gap narrow to 6 percent; however, the dollar amount actually increases to $8,681. Men’s salaries average $135,391, and women’s salaries $126,710, both a 65 percent increase. But, under-represented minority women see just a 57 percent salary bump and average the least at $116,565 post-MBA.
The “current compensation” MBA gender pay gap sits at 17 percent, a big improvement from 2016’s 28 percent, but still significant. It’s also worth noting that it hasn’t changed since the 2020 Forté report. Men are earning an average of $209,011 currently, versus $173,070 for women.
Forté found that women don’t advance to the same level as men, have fewer direct reports, and are less likely to have a documented career plan and associated career development coaching and mentoring. Over the same time period following their MBA, men receive 2.2 promotions, women receive 1.8, and under-represented minority women see 1.5. This data reflects the barriers to leadership that women face and men don’t, such as lack of sponsorship, confidence, and female role models. Men also rarely have the childcare challenges that women do.
“Line” roles (those with profit and loss responsibility and thus higher pay) are still more likely to be filled by men. Women, who are more likely to fill “staff” roles (those without profit and loss responsibility), still make less than men when they do achieve line roles. One unexpected result Forté found was that under-represented minority women make more in staff roles than line roles, earning an average of $145,736 vs. $168,016 when in a staff role. They are the only demographic group to do this.
Sangster observes, “Women need to take on leadership roles with profit and loss responsibility to get on the CEO track. When they do, they earn more, but still less than their male peers. They also face greater barriers to leadership including lack of a formal career plan, sponsorship, and female role models – all things that can be addressed by company leadership, managers, and women – ideally working together.”
Forté also uncovered how the shifting labor market sparked by the pandemic affected men and women differently. While both value hybrid work as an ideal work environment, more women and underrepresented minorities relocated to a new city in order to have remote work options, and more women decided that they wanted to work from home exclusively.
Since women overall experience less career satisfaction than men (reporting a 3.8 out of 5 vs. 4 out of 5 for men), it makes sense that they changed employers during the pandemic more than men. More telling, women will be more likely to change employers in the next year, especially underrepresented minority women.
The study was conducted online, surveying 1,476 MBA alumni from over 60 elite MBA programs in the U.S., Europe, and Canada between October 18 and November 21, 2022. Michelle Wieser, Ph.D., Dean, School of Business and Technology at Saint Mary’s University of Minnesota, led the research.
“There were some surprising findings from this research,” Sangster explains. “In particular, the number of women, especially underrepresented minorities, who plan to change jobs in the next year, is likely tied to a lack of career progression, equal pay, and workplace culture. Another eye-opener was the higher-than-expected percentage of women and underrepresented minorities who relocated to a new city during the pandemic due to the ability to work remotely. These trends, coupled with return-to-office mandates by some companies, may negatively impact their ability to retain diverse employees.”
Women who reported they were unsatisfied with their careers cited the top reasons as “career progression” and “current salary.” Those who intend to leave their current employers named “work culture” and “lack of respect” as their motivation, similar to their reasons for leaving a past employer. Women are more likely in their current work environment to lack a formal plan for advancement and receive mentoring or coaching than men. These workplace conditions threaten to cost organizations valuable talent as women seek supportive, flexible, and moreover, empowering work environments.
Sangster has sage advice based on the data in the study, sharing with Clear Admit, “Apply the same rigor in your job search that you relied upon in selecting your MBA program. Run the numbers on culture fit, advancement opportunities, success of previous MBAs, etc., to ensure you know what lies ahead of you. The MBA opens doors and increases pay, but just like any career, advancing requires that you take ownership of your journey. Don’t wait for someone else to determine your career trajectory. Be vocal about your aspirations, do the research so that you understand the playing field, and make sure you have a network of people around you who are committed to your success.”
Read the report here.