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Why women in leadership roles ask for 25% less than men

Women are asking for lower pay than their male counterparts for identical senior roles, according to new research. Here's why.
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Women typically earn less than men. The reasons are not fully understood. Academia, worldly wise women in leadership, and middle managers cracking the surface of Britain’s corporate glass ceiling argue that this may be because women ‘don’t ask’.

The reason they fail to ask is out of concern for the quality of their relationships at work. But how can you measure this?

According to researchers from University of Warwick, our current data sets can’t definitively explain the gender pay gap, whether it’s a confidence issue, a people-over-pay mindset issue, or good old fashioned sexism.

Using matched employer-employee data from 2013-14, the researchers discovered that the “women don’t ask” theory is incorrect. The findings reveal that women do ask. However, women do not get.

The Warwick researchers stress that assuming that women don’t ask is an easy way out of actually dissecting the pay gap puzzle. It reduces the problem to that of a basic psychological trait of one gender. The onus to bridge the gap then falls on female workers. Fix your attitude! Know your worth! Change your behaviour!

The glaring stats

More recently, a study of over 6,000 senior executives in the UK earning at least £70,000 per annum by Norrie Johnston Recruitment (NJR) found the gender pay gap prevalent across all senior leadership roles in every sector in the UK.

There was a 25% difference between the salaries expected by male and female non-executive directors, the one leadership role where women are more visible than elsewhere in corporate Britain.

Male non-exec directors (NEDs) on average are looking for an annual salary of £106,935 whereas women going for the same NED roles expect £83,125.

The data, featured in NJR’s report Women, Pay & Progress – closing the gender pay gap shows that the problem is widespread with men’s salary expectations higher than women’s for 10 of the 13 senior/board-level roles studied.

Men pursuing customer service head roles on average expect to be paid £93,833. In contrast, female customer service heads expect £75,114 – a 22% difference.

There’s a 14.5% difference for financial director roles while for chief operations officers and sales directors the pay gap is 13% and 12% respectively.

Are women set up to fail as leaders?

As an executive search and interim management agency, NJR has recorded these trends. CEO Graham Oates believes that the salary discrepancies arise because candidates limit themselves.

“We’re not saying that companies coming to us with senior roles to fill expect to pay women less than men, absolutely not. The differences we’ve recorded are the salary expectations set by the candidates themselves.”

“When gender pay gap statistics were made public for the first time earlier this year many argued that the major factor behind the disparity was that there are more men than women in senior positions; the challenge was simply to help more women reach the top,” he says.

“However, our research suggests that even when women get into senior roles a major pay gap can still prevail.”

Things are less marked for MDs and CEOs (2.5%), senior change managers (7.5%), facilities managers (3%) and marketing directors (3%), but there’s a gap all the same, and every time it is in favour of men.

There are a few roles where there is almost parity, namely HR, supply chain management and IT programme management.  Furthermore, with chief technology officer (CTO) roles, the salary averages in favour of women, with an 8% differential, but these are the rare exceptions to the rule.

“It’s fair to assume that the senior executives we studied are basing their salary expectations on their most recent roles,” adds Oates.

“If that’s the case, then what appears to be happening is that women somehow find themselves on a career trajectory which culminates in them being on a pay scale which is out of kilter by the time they reach a senior level. This needs to be addressed.”

“The various bodies looking to tackle the pay gap issue need to perhaps consider how young women early in their careers value themselves within the labour market, and what happens to their pay, career path and opportunities as they progress. We need to understand how things get out of step.”

NJR also looked at the day rate expectations of senior interim managers and found that while the gap isn’t as significant, there is still a sizeable disparity for eight of the 13 senior interim roles studied.

The biggest gap is a 15% difference between the day rates of male and female interim non-exec directors in favour of men, and double-digit differences for interim senior change manager and customer service roles.

Again, IT appears to be the one area where the tables are turned, with female interim CTOs and IT project or programme managers expecting a significantly higher day rate than their male counterparts.

Do recruiters have a significant part to play in narrowing the gender gap? Oates believes understanding the data, reviewing trends and highlighting issues are all part of the first step. “As an interface between organisations and the talent they employ, we work hard to ensure that all our candidates are fairly evaluated for all roles and are properly remunerated based on the value that they can bring, irrespective of gender. Hopefully, by flagging these figures we are adding more insight to the debate and drive to eradicate this gender pay imbalance.”

Why do women still lag behind?

The Warwick research follows in the academic footsteps of previous researchers who are trying to uncover why women have less success in the labour market.

One popular theory is that women might consciously choose a less ambitious career path than men, which automatically puts them in a lower salary bracket. Another hypothesis is that women want to be seen as less career-driven when men are watching.

Some research suggests that if women deviate from a perceived female stereotype, this can produce “identity costs” for them. If women behave “out of role” they may be less popular in professional life.

In one lab experiment, for instance, it was shown that males dislike females who negotiate. Moreover, women who display anti-stereotypical behaviour are sometimes accused of exhibiting poor social skills.

Lastly, all such beliefs can become “self-fulfilling-prophecies”, leading women to undervalue themselves. This is called stereotype threat, and explains why girls’ mathematics scores drop when they’re aware of the stereotype that women aren’t as skilled in maths. The same happens for performance in competitions, risk-taking and corporate confidence issues like asking for a raise.

Whether these theories will get us closer to narrowing the gender pay gap remains to be seen.

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About Author

Praseeda Nair

Praseeda Nair is the editorial director of Real Business, and its sister publication for micro businesses, Business Advice. She's an impassioned advocate for women in leadership, and likes to write about management strategies, entrepreneurs, growth companies, and diversity and inclusion.

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