in Finance: Underpaid?
By Anne Fisher (Fortune.com 10-14-2002)
No doubt about it: Over the past three decades, the "gender gap" in
The not-so-hot news is that pockets of inequality remain. Oddly, one of these
is a field where you might expect people would be especially inclined to
scrutinize the numbers: banking, accounting, and finance. In fact, gaps of 20%,
30%, and even 40% are not uncommon between men and women with the same education
and job title, according to a new survey of 2,575 finance folks nationwide by
job site CareerBank.com.
Female lending officers at banks, for instance, reported average pay of $38,666, while their male peers average $61,021. And look at assistant treasurers: Women with that title make, on average, $50,000 a year. Men make $88,550.
"We were surprised by these numbers," Robert Epstein,
CareerBank.com's CEO, told me recently. "In fact, just to make sure we were
really comparing apples to apples, we analyzed the survey results several
different ways, including taking marital status into consideration. We found
that, at the lower-to-middle levels, the gap between men and women is not too
bad. For example, single female staff accountants earn $36,802, to single men's
$38,464. But single women overall earn $42,315 to men's $54,292, while married
women earn $48,302 to men's $68,294. And the higher you move up through the
ranks, the more the pay disparity increases."
Indeed. Consider the average salary of a female chief financial officer with
a master's degree: $70,908. What does her male counterpart make? $112,109, a
whopping $41,201 gap. "Even with the same education as men, women CFOs earn
only 63% of male CFOs' pay," notes Epstein.
What accounts for the differences? Epstein observes that explanations
abound--but that none of them are particularly persuasive. "Often you hear
people say, 'Well, women are more likely to be working part-time or flextime, so
that explains it.' But everyone in our survey is full time," says Epstein.
"You also hear, 'Women are more likely to take time off to have kids, so
they fall behind.' But if someone takes a few years off to raise a family, are
they going to come back with the same title as a man who had not taken that
break? Probably not."
So how to explain the gap between men and women at the exact same level of
responsibility? CareerBank's researchers asked only about salary, not about
other benefits such as child care, dental insurance, or ability to telecommute,
all of which appeal to women with young children, Epstein says.
"Organizations that offer those things may tend to attract more women, and
the family-friendly benefits may act as an offset to lower salaries," he
explains. "That might realistically explain a 10% or 15% disparity in
pay--but 20, 30, 40%? We don't think so."
Still, before we jump all over banks and other financial companies for
undervaluing their female employees, let's think about something I've heard from
at least a couple of dozen executive coaches and recruiters over the years:
Women, on the whole tend not to be as comfortable as men when it comes to
discussing money. (Of course there are exceptions.) They tend not to keep track
of their current value on the open market with the same assiduity that men do.
And they often are not as assertive in negotiating for raises as men are. For
the pay gap to disappear, all that has to change.
In the short term, says Epstein, it is in financial companies' own best
interests to take a close look at who is making what. "More than half of
all new college graduates in accounting and finance are female, so numbers like
this are actually dangerous for the industry," he says. "Underpaying
half your workforce is not great for recruiting or retaining the best people. If
employers aren't careful, it will ultimately hurt their business. And it's a
problem with a ready solution: Review everyone's current pay and start rewarding
the top performers, regardless of sex." Hear, hear.
Now, while we're on the ever-popular topic of pay, here's an e-mail from a
reader about the column on job interview howlers: "I think they're all
funny except for this one: 'When the interviewer asked the candidate what she
was earning, she answered, "I really don't see how that is any of your
business." I've never understood how that is a legitimate interview
question. I'd like to hear the side of the people who ask it." This
was also the subject of my June 3 column "Do I Have to Reveal My Past
Salary?"--but, hiring managers who ask about past or current pay, what say
you? How do you respond to job seekers who resist answering? I'll print your
comments in a future column.