New Research Finds The ‘Old Boys Club’ At Work Is Real—And Contributing To The Gender Pay Gap

This article was originally published on 22 April 2021 on Forbes.com

Ever wonder if the idea of an "old boys club"—the male-only network of social and business connections among the elite—translates to the office? As it turns out, it does. New research out of Harvard suggests that male employees are promoted faster than women while under male managers, yet male and female employees receive equal promotional treatment under female managers.

An easy and quick assumption to make is that men simply outperform women. I‘m sure there was a collective eye-roll upon reading that last sentence. But, to rule out that assumption—as well as many other potential reasons for the difference in promotion rates—researchers controlled for common promotional reasons such as effort and performance. They also ruled out factors such as male managers being better able to motivate male employees—hence resulting in higher performance. Yet, even after all the checks and balances were completed, the conclusion was still that the higher promotion rates men enjoy under male managers are not influenced by any differences in effort or performance compared to females.

Why are men being promoted at greater rates?

The top-line finding from the research is that when male employees transfer from a female manager to a male manager, they are promoted faster than any other group. After ten months, that difference in promotion rate manifests, on average, as a 14.6% higher salary.

Why is this happening?

Remember the Friends episode where Rachel took up smoking because she felt critical decisions were happening on smoke breaks? She was onto something. Researchers hypothesized that smoke breaks were a key moment of social interaction.

"I think there are many aspects around the workplace that encourage what we might think of as gender-skewed socialization because there are a set of activities that are condoned at work," says Zoe Cullen, an assistant professor at Harvard Business School and co-author of the research. "Smoking breaks is one of them, as is watching sports together or drinking at a bar. I think many work cultures encourage some sets of employees to spend more time together. This seems sensible as the top leadership in most organizations is predominantly male. So when you think about the things they would choose for their setting or what activities they might support, it could unintentionally give preference to men."

Smoking could be one of those activities and is the ultimate schmoozing channel. And men who smoke who also have managers that smoke have more social interactions together—and thus experience a 17% increase in pay over non-smoking males. Again, the researchers employed the standard controls and find that the smokers weren‘t actually out-performing non-smokers and thus more deserving of their pay raises and promotions.

Why this matters

Much of the gender pay gap can be attributed to a difference in promotion rates. How much? About 75% of it by the age of 45, according to one thorough account.

But what if the male-to-male advantage were removed? The study calculates the economic magnitude of the findings and predicts that about 40% of the pay gap would be removed if the male-to-male promotion advantage were removed. Is making significant inroads on closing the gender pay gap as simple as being more mindful of who people‘s managers are?

That could be a start. But, compounding the gender pay gap are cultural norms and differences between Western and Eastern cultures. In fact, the particular firm examined in the report had an almost equal distribution of employees between one region more heavily influenced by communist ideas and another more influenced by European colonization. The more "westernized" portion of the business had a gender pay gap that was 39% higher than the more "eastern" portion of the business—consistent with the idea that stronger gender norms exist in western cultures.

What teams can do to even the playing field

A great place to start is a more diverse representation for those who decide what the team-building activities are going to be. "I had a student working at a large consulting company," says Cullen, "and the team would get a pool of money for team building, and they would vote on how to spend it. Because she was always in the minority as a woman, a consequence was that the activities tended to be geared toward men. It‘s easy to see how it happened." Therefore, companies can help mitigate this by placing more diverse people on committees.

Be smart about who goes into the office (and when they do so) under hybrid working. The research found that the promotional benefit men enjoy under male managers is not found when they are not working in close proximity. "A study by Nick Bloom and co-authors looked at promotion rates among home workers and found that even when they were doing better in performance metrics, they weren‘t getting promoted as often as those who didn‘t work from home. Promotion rates are heavily boosted by having face-to-face interaction," says Cullen. Knowing this, how are you arranging for teams to be in person?

Learn a lesson from parts of the business where the gender pay gap is less. What are their attitudes? What are their promotional practices? What are they doing differently that is leading to more equality?

For leaders, be more systematic in who you give important tasks to. "Possibly because of salience bias, when thinking about who to give a task to or who to talk to about an important issue, you just turn to the person you think of first. As a consequence, the right-hand person might be the person you spend social time with," says Cullen.

Will remote working mean the end of the old boys club?

"Maybe this is wishful thinking on my part, but my honest prediction is that if—to the extent that things remain remote and flexible—it will, on average, push toward being democratizing," predicts Cullen. "The reason I think that is, while smoking is one example, we also know that taller men tend to get preference. Or you really can‘t go drinking together. You just won‘t even know if the person you are talking to is a big, strong man or not. Remote working will hide the superficial signals that we get about who we are working with."

Perhaps this shift is the beginning of the end of traditionally male-dominated patterns of reward. Further areas of research into quiet leadership, shifting leadership signals, and who gets rewarded, and how in a remote world will continue to shed light on the actions we need to take on the road to equality.