The gender pay gap explained: Women are less likely to negotiate

Recently I read through the excellent Richard Lloyd Sydney Accounting Salary Report - 2017. I have seen many salary surveys over the years and most are a boring copy of each other with very little new to say about the data that has been gathered. The pedestrian reporting of salary differentials across skill levels, although mostly diligently gathered and reported, was rarely enlivened with a fresh angle on the data subsets that were available. 

The directors at Richard Lloyd, Geoff Balmer and David Landau, have managed to do a fantastic job of creating a survey with interesting questions, credible data, relevant commentary and a very readable graphic design. 

The data gathered from over the 2,000 accounting staff that took the survey has revealed some very interesting, but unsurprising, data. 

Here are the major results: 

Role classification  (and gender split of respondents in each category)

Median base salary 

 

Difference

Women

Men

Support (67% W, 33% M)

$60,000

$60,000

0

Mid-level, Junior Management (45% W, 55% M)

$92,000

$106,000

Men paid 15.2% more ($14,000)

Senior management (27% W, 73% M)

$143,000

$167,000

Men paid 16.8% more ($24,000)

 

The report elaborates on this data as follows:

 When examining other variables such as hours worked, years of industry experience, tenure and education it remains clear that the only significant differentiator is gender. The exception is at the Senior Management level, where the only difference is in terms of number of hours worked, as well as tenure. However when comparing like-for-like, men and women, we can still see that the gap still persists

The like-for-like comparison is:  

Senior Management, 3-5 years' tenure, CPA/CA qualified: 

Median base salary for Men: $164,000

Median base salary for Women: $150,000 

Men are paid 9.3% more than women ($14,000)

Even when benefits and bonuses are factored into the comparison the gender difference remains wide and pervasive: 

Role classification  

Mean value of bonus

 

Difference

Women

Men

Support

$812

$1 602

Men paid 97% more ($790)

Mid-level/junior

Management

$5,670

$8,503

Men paid 50% more ($2,833)

Senior management

$17,925

$21,082

Men paid 18% more ($3,157)

  

Role classification  

Mean value of benefits

 

 Difference

Women

Men

Support

 

$1,168

$1,243

Men paid 6% more ($75)

Mid-level/junior

Management

$1,819

$2,381

Men paid 31% more ($562)

Senior management

$4,179

$6,265

Men paid 50% more ($2086)

 

The obvious question to ask is: Why is this gender gap so prevalent no matter how you cut the data? 

The answer may be found in the research from fifteen years ago by a team of researchers, led by Carnegie Melion economics professor, Linda Babcock. 

Their research, detailed in her book, co-authored by Sara Laschever, Women Don't Ask has a central theme: Women are far less likely than men to initiate a negotiation. 

In 2003 here's how the New York Times reported the book's findings: 

"One of Professor Babcock's surveys, for example, found that half of men had started a negotiation within the previous two weeks, while half of women had started their most recent negotiation more than four weeks earlier. Most women did not anticipate negotiating again for another month, while half of men expected to within a week. 

In another survey, 20 percent of women said they never negotiated. 

Not only do women shun negotiations, the authors also point to evidence that women ask for less when they make the all-important opening offer, and then concede too quickly. 

Why? Professor Babcock and Ms. Laschever offer several explanations. Men see situations as adaptable; women see them as unchangeable. Men use metaphors like ''winning a ballgame'' to describe negotiating; women use metaphors like ''going to the dentist.'' Women are ''more likely than men to think that simply working hard and doing a good job will earn them success and advancement.''

According to the authors, women are expected to be selfless and nurturing, men selfish and competitive. Women often have lower expectations when it comes to pay. As a result, the authors say women have an ''impaired sense of entitlement." 

The research reveals that men are four times more likely than women to enter negotiations over pay

Therein lies the probable cause of the gender pay gap: if you don't ask, you don't get. 

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