It marks the difference in average hourly pay between men and women, with figures varying between different countries and regions. In the European Union (EU), women earned on average 13% less per hour than their male counterparts in 2020.
In the US, female employees earn around 82 cents for every dollar a male employee earns—an average pay gap of 18% on the dollar. The gender pay gap increases even further among minority female employees, with Black women in the US earning around 63 cents for every dollar a white male employee earns.
It’s estimated to take another 132 years before the world reaches gender parity if existing rates of development are maintained, according to the World Economic Forum Global Gender Gap Report 2022.
While many organizations and companies are attempting to reduce the gender pay gap, addressing disparities through education could help to tackle this systemic issue.
BusinessBecause spoke to business schools across Europe to find out the actions that schools are taking to reduce the gender pay gap.
1. Building more inclusive business school classrooms
This is because Graduate degrees in business, such as an MBA or Master in Management, can help women access top jobs after graduation. Without gender parity in the business school classroom, however, disparities in pay are likely to continue.
Business schools are increasingly aware of the importance of building a gender inclusive classroom to facilitate gender parity in the future workplace.
Pallavi Shanbhag, MBA alum from Grenoble Ecole de Management, says that the gender balance of both students and faculty was one of the factors in her decision to attend the business school.
Pallavi is now a Diversity, Equity, and Inclusion (DEI) program coordinator at STMicroelectronics in France.
At Grenoble, there’s mandatory teamwork for every class, with teams comprised of a mixture of different students.
“This diversity enabled us to understand different cultures, backgrounds and career profiles,” she says.
Business schools should invest in strategies to increase representation of women in the classroom.
Alexandra Gerbasi, dean of the University of Exeter Business School, says: “A key role for business schools is to help develop the leaders of tomorrow.”
“We have a great opportunity to instill in our students an understanding that if you have fair and equitable organizations, you will attract the right talent and will be sustainable and successful.”
Female business students might look to some of the best MBA programs for women that are partnered with the Forté Foundation, which awards scholarships to women MBA students and aims to increase women’s enrollment in management degrees.
A drive for diversity is also changing the methodology of business school rankings. The Financial Times Global MBA Ranking 2023 includes a 3% weighting for the category of gender parity among women MBA students, with a 3% weighting for gender parity among faculty.
2. Supporting women MBAs to enter STEM leadership roles
There are certain industries that are less gender diverse than others and the science, technology, engineering, math (STEM) fields make up just some of these.
With fewer women filling roles in these sectors, the gender pay gap is only going to worsen. This is why business schools need to attract more women into STEM and support their career growth into this ever-growing and high-paying sector.
The World Economic Forum Global Gender Pay Gap report outlines that most STEM industries fail to employ women in leadership. Some of the industries with the lowest levels of female leadership are supply chain and transportation (21%) and manufacturing (19%).
“STEM industries are male dominated and it goes back to this deeply embedded cognitive bias. As an educational institute, we have a critical role in inspiring more women to study and work in these areas,” says Christine Sinapi, professor of finance and head of academic programs at ESSCA School of Management.
To tackle the issue of the lack of gender diversity in tech, ESSCA has opened new specializations in areas such as data management and artificial intelligence and are active in encouraging female students into these courses.
Inspirational female role models can also help other women to pursue leadership roles in STEM.
INSEAD’s ‘Ambition Has No Gender’ campaign spotlights successful alumni stories of female leaders at top companies and welcomes students to connect with these female leaders.
3. Providing courses on salary negotiation for women MBA students
Some of the barriers that women face to gaining gender pay parity can be linked to a lack of confidence in areas such as salary negotiation.
“A significant part of the gender pay gap can be attributed to the fact that men are four times more likely to negotiate their salaries,” says Amber Wigmore Alvarez, chief talent officer at Highered.
For business schools, tackling this problem will be about providing salary negotiation workshops and courses on discrimination in the workplace targeted at future female business leaders.
“It’s incredible the amount of business school students and graduates that I see leaving money on the table because they feel that negotiating a salary offered in an initial job offer would be too aggressive, not customary or common in the country they are applying to, or simply lack the confidence to do so,” Amber says.
4. Facilitating career links with diversity-driven companies
Many business schools provide stellar career links to top companies that offer mouth-watering salaries, but schools can do more to ensure that they’re offering career links with companies that champion equality in the workplace in relation to areas such as pay.
Pallavi from Grenoble works in the semiconductor industry for a company that prioritizes DEI efforts in its recognition of the gender imbalance in the industry.
“My company has introduced several programs to help women achieve their career goals. Great efforts are being taken to ensure equity in career development and equal remuneration,” she says.
By providing networking opportunities for business school students to connect with companies that are actively challenging workplace gender discrimination, female grads are more likely to join and climb the ranks at such companies.
Target companies might include those that offer sponsorship or mentorship programs for female business leaders, such as Big Three consulting firm McKinsey’s Next Generation Women Leaders initiative.
5. Closing the gender pay gap among business school faculty
One of the many ways that certain business schools are demonstrating a mission to close the gender pay gap is by reviewing the salaries between male and female faculty.
“As business schools, we also need to be best practice examples of equal and fair employers,” says Alexandra from Exeter. The school conducts a formal review process of academic faculty pay on an annual basis.
“It’s important to consider parental and maternity leave and review the promotion criteria across job grades. When looking at people, it’s not just about their output but reviewing all aspects of performance,” she says.
Business school students, particularly the keen-eyed Generation Z, are increasingly demanding that institutions prove their commitment to DEI efforts, rather than simply advertising their strengths in this area.
The good news for future female business leaders is that for business schools to remain competitive in a tough climate, a greater focus on gender equality in the classroom and in post-graduation careers will be necessary to keep the younger generation from rolling their eyes at any virtue signaling efforts.