A new study looks at the pay off on the ‘old boys’ club.’
It’s old news that the “old boys’ club” can help some men climb the corporate ladder — just ask the many women who have struggled to break the glass ceiling.
But a new study has put a price tag on the value of admission to that exclusive club.
More than one-third (38%) of the pay gap between men and women — at least at one unidentified Asian bank — is due to the informal male-to-male face time that happens during activities like talking about sports or sharing a smoke break, according to Harvard University and University of California, Los Angeles researchers.
Male workers who moved from a female manager to a male manager, they were promoted faster and earned on average 13% more after switching than male workers who were assigned another female manager, the study said. Researchers looked at the period between 2015 to 2018.
Male workers who moved from a female manager to a male manager, they were promoted faster and earned on average 13% more after switching than male workers who were assigned another female manager.
Women did not see similar gains after switching managers: they had the same earnings trajectory whether they had male or female bosses, researchers said.
Researchers discounted the idea that male managers produced better results from their male workers because there was no noticeable difference in sales revenue or hours worked when men worked for men.
The average amount of time it took for male managers to promote their male workers also demonstrated the influence of the old boys’ network, researchers said. “The advantage develops slowly over the course of two years, consistent with the time-intensive process of relationship building. This advantage is concentrated in positions where male managers and employees spend time in close proximity,” researchers wrote in the study, which the National Bureau of Economic Research distributed on Monday.
The study pulled from data and surveys at an unidentified “large commercial bank in Asia” with “millions of customers and billions of dollars in assets and in revenues.” Though based abroad, the company’s hierarchy resembled many American companies, becoming increasingly male higher up the chain of command.
Three-quarters of the bank’s entry-level workers were women and there were no women at the CEO and board level, according to the study, which was distributed Monday by the National Bureau of Economic Research.
A survey this year from the consulting firm McKinsey & Company and LeanIn.org also found steep drop-offs for American banking companies, with women making up half of entry-level staff and 27% of the C-suite.
Last year, a woman earned 81 cents for every dollar a man made across all industries, according to November data from the Bureau of Labor Statistics.
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The new study underscored the power of real-life face time, whether that’s through idle chitchat about sports or sharing a smoke break with the boss. In fact, male smokers who happened to have male smokers for a boss also had quicker promotion rates. One third of the company’s male workers smoked, compared to less than 5% of its female workers.
Zoe Cullen, one of the study authors and an assistant professor of business administration at Harvard Business School, told MarketWatch that the “magnitude of the effect” surprised her.
The study also underscored the importance of standardized promotion policies and “more gender- neutral socialization practices” in the workplace, she said.
Michelle Friedman, founder and principal of Advancing Women’s Careers, a consulting firm targeting woman’s career advancement, wasn’t surprised by the findings.
Friedman, who works with financial firms to diversify their talent pipeline, says the boys’ network is strong and starts early. She remembers listening to her son talk sports with his friends years ago and thinking, “Oh my gosh, this starts at 10 years old in the backseat in a carpool. … If you’re in a better position to bond with men, and done that your whole life, that’s a career advantage.”
But one way to counteract those forces is to focus on the idea of “sponsorship,” which is having a higher-level advocate to think of someone for an important assignment or position. (Male sponsors appear to have a substantial impact on a person’s pay, a recent PayScale report suggested. Women with female sponsors were paid 14.6% less than those with male sponsors, the report found.)
The old boys’ club provided those sponsorships informally, but Friedman works with companies to do that on a formal basis with women. “It’s really putting structure around it, shining some light on it and calling it what it is,” she said.
A second way to break down informal barriers is for companies to avoid hosting group activities that might be more appealing to men than women, like after-hour drinks at a bar, Friedman said. For example, she worked with one company that held a cooking competition.
The Harvard and UCLA study looked at the effects of the old boys’ network, but that’s not the only way some try to get ahead beyond their grit, hard work and creativity.
Some middle-class young adults say they spend money on travel — sometimes even going into debt — in an attempt to give themselves interesting experiences to recount in future job interviews, according to other research. The world traveler might not just have great stories about far flung places, but it might also be a way to forge a quick bond with an interviewer who’s also traveled.
But it costs money to travel, or, likewise, take an unpaid internship.
College connections can create another advantage; a shared alma mater can catch a recruiter’s eye or pave the way for introductory phone call. But with the cost of college soaring, that option is increasingly out of reach. Some critics, like former Federal Reserve Bank of New York President William Dudley, have said colleges giving preferential treatment to applicants who are children of alumni can harm economic mobility.