MBA gender pay gap halves to 20 per cent

The gender pay gap among MBA graduates has almost halved in the past four years, but men still earn 20 per cent more on average.

The survey of 3,133 current and former students from 57 of the world’s highest ranked business school programmes also found that women were less likely to be promoted and more likely to have fewer direct reports.

After their MBA, the men were earning on average $177,112, compared with $147,412 for women, according to the research, which was conducted in 2020 by the Forté Foundation, a consortium of businesses and universities created to tackle gender imbalances.

Although the gender pay gap was down from 39 per cent in Forté’s 2016 survey, the 2020 gap ranged from 9 per cent for respondents two years or less after graduation to 35 per cent among those who completed their MBA nine or more years ago.

When they were asked about their ideal job level five years from now, more female than male MBA alumni — 63 per cent versus 54 per cent — were aiming for “early leadership categories”, such as senior manager, director, and VP.

However, more men than women aspired to boardroom positions, such as president or chief executive, with 22 per cent saying they wanted such roles, compared with 12 per cent of women.

“Men may not be aspiring to bigger leaps in their early career than women because they are already further ahead on the career ladder,” said Elissa Sangster, the Forté Foundation’s chief executive. “This might also play a role in why a larger percentage of men are striving for C-suite roles than women.”

The research also looked at how inclusive business schools felt to those studying in them. More than one in five students and alumni — and a third of minority women surveyed — said their MBA programme’s diversity, equity and inclusion efforts did not meet their expectations.

Men were more likely than women to be positive about diversity and inclusivity in the admissions process for their MBA programme.

“MBA programmes must play a pivotal role in building leaders who are inclusive and prepared to lead in diverse environments,” Sangster said. “This mismatch between expectations and what students are actually experiencing, shows that MBA programmes still have some work ahead and shines a light on what areas need more focus now, including case studies and course work.”

The study is a continuation of Forté’s 2019 research, which explored to what extent an MBA could help women and ethnic minorities to increase their earning power and improve equality in the workplace.

​Letter in response to this article:

A dose of realism needed in fight against inequality / From Duncan Brown, Principal Associate, Institute for Employment Studies, London TW10, UK