In fact, the gender pay gap widens significantly between male and female graduates’ first post-MBA job and their current compensation—from 6% to 17%. Michelle Weiser Ph.D., dean of the School of Business and Technology at Saint Mary's University of Minessota, led the research.
BusinessBecause caught up with Forté Foundation CEO, Elissa Sangster, to find out more about this disparity and how Forté are responding to these findings.
The MBA gender pay gap
According to the study—participants of which graduated between 2000-2022, with 89% residing in the US—the pre-MBA gender pay gap stood at 8% with men earning an average of $83,524 and women earning $76,660.
After completing an MBA, both men and women experienced a sought-after MBA salary boost to similar effect. In their first post-MBA job, the survey found that women’s salaries jumped by 65% compared to men’s salaries rising by 62%.
However, there were intersectional differences to note as underrepresented women experienced a salary increase of 57% on average compared to non-underrepresented women who received a 68% pay jump.
While non-underrepresented men did not experience the biggest pay increase, they were still the highest paid group, due to their favorable salary footing pre-MBA. The survey showed non-underrepresented men earned an average of $135,739 compared to $129,865 for non-underrepresented women and $116,565 for underrepresented women.
Discouragingly, despite this initial closing of the gender pay gap post-MBA to 6%, the pay gap in the current compensation of the alumni surveyed widened to 17%. The biggest pay gap stood between underrepresented women and underrepresented men at 23%.
Post-MBA leadership barriers for women
Taking the findings of the survey, it seems the problem lies in the workplace and the environment that is created for women, which prevents them from advancing alongside their male counterparts.
“Women are reporting a lot of factors that are contributing to their lack of career progression including a lack of sponsors or role models within a company, a lack of career guidance or roadmap to how they can progress in their organization,” says Elissa.
According to the report, 37% of women cited a lack of female leaders and role models as a barrier to their leadership advancement. Women also received fewer direct reports from their management—2.3 compared to 3.4 direct reports that the male employees received.
“I think middle managers do not get enough attention to address the gender imbalance in the workplace. Their direct supervisor is who underrepresented employees and women walk away from when they leave a role. If a company really wants to solve this problem, more training for all managers is really a critical step,” says Elissa.
The MBA alumni surveyed were also asked to name their ideal level of leadership in five years’ time. More women (41%) than men (34%) were looking at mid-management roles, whereas a higher number of men (35%) than women (30%) demonstrated aspirations to reach C-Suite positions.
To tackle these leadership barriers in the workplace, the Forté Foundation offers the Rise Leadership Program designed for professional women with 8-15 years' experience who want to move to the executive level.
“The program offers women the coaching they may not be getting from their employer such as introspection, reflection, and professional leadership coaching,” says Elissa.
Despite its programs tailored to women, Forté recognizes that the onus isn’t solely on women to empower themselves, but on the men currently holding leadership positions and male MBA graduates who will work alongside women to create an environment of inclusivity, where women feel the confidence to thrive.
“Male allyship is something we’ve worked on a lot at Forté such as embedding male ally programs within our business school environment and in companies so that men can really do that self-reflection because making a difference requires them to stop and really understand their own biases and perceptions,” says Elissa.
What can business schools do to close the gender pay gap?
Alongside companies, business schools also have a responsibility to tackle the gender pay gap.
The Forté Foundation works closely with partner business schools to increase the representation of women on MBA programs, and reported a rise to 41.4% in 2022. This is in part, by offering Forté Fellowships to increase accessibility and affordability of MBA programs for women.
Many business schools also offer other MBA scholarships especially for women as well as women in business clubs and skills workshops, and inviting industry professionals to campus to share their experiences and career insights.
“We ask the schools we work with: are you bringing in the right speakers and giving men access to female role models too so that men understand how female leaders approach problems and how it might differ to the way they would?” says Elissa.
The Forté Foundation plans to take the research to its annual MBA Women’s Leadership Conference to gather its partner businesses, business schools, and universities to discuss actionable changes that can be made, Elissa adds.