Could tackling the gender pay gap help universities grow market share? | HE Research Snippet #24

HE Thinking | 01 Sep 2016


Gender pay inequality is big news. Last week’s IFS’s report on the topic dominated the headlines. In her inaugural speech as Prime Minister, Theresa May stressed the need to challenge the gap as part of her mission to fight social injustice.

It’s such big news that new female undergraduates discount their future employment opportunities before they have even started university.  In this HE Research Snippet we use data from our Higher Expectations dashboard to try and make a case that universities could work with this assumed inequality by strongly – and openly - challenging women to exceed their lower salary expectations. And - critically for marketing strategy - not just leaving the 'good works' as a quiet CSR achievement but rather celebrating the commitment and incorporating it into the HEIs positioning.


A lesson from Hollywood

In December 2014, the so-called ‘Sony hacks'  revealed that the world’s highest paid female actress, Jennifer Lawrence, received significantly less money than her male co-stars in the film American Hustle. Ms Lawrence’s response was to say it was her failure to negotiate as hard as her male counterparts.  She simply gave up too early, not wanting to seem 'difficult'. She commented,

This could be a young-person thing. It could be a personality thing. I’m sure it’s both. But this is an element of my personality that I’ve been working against for years, and based on the statistics, I don’t think I’m the only woman with this issue [of gender-influenced, low pay expectations].

Our Higher Expectations survey suggests Ms Lawrence’s experience is replicated on a wider scale.  Young females just starting university seem to deny themselves the same ambitious pay expectations as their male peers.

FIG1 – Expected salary for graduates [Mean]

Fig1 image

Higher Expectations survey 2015/16 in response to: “When you graduate, what do you expect your starting salary to be for your first graduate role?”, numeric response. Base sizes: Female first year undergraduates (7805), Male first year undergraduates (3666)


Data from Higher Expectations 2015/16 shows that, on average, new female undergraduates expect to earn £21,248 annually compared to their male counterparts who expect to earn 22% more, with an annual starting salary of £25,839.

It could be that these guesstimates are just a function of depressing news headlines. However, HESA 2014/15 leavers’ data confirms the reality of this pay gap. Through actual returns to their Destinations of Leavers in Higher Education (DLHE) survey, HESA have ascertained that the mean female graduate starting salary is £21,000 per year while the mean male graduate starting salary is £24,000 per year. It’s little consolation that women are better at guessing. Male guesstimates may be slightly off the mark but their salary success is undeniable.  There could be many reasons for this, including men being happy to dream bigger than women – and men seeing more examples of other men doing well: HESA's DLHE survey shows over a third of new male graduates earn over £25,000 per year compared to just one in five for new female graduates.

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Or is it just about the subject studied?

Is the gap in annual salary expectations simply the result of the sectors male and female students tend to enter? It could be. Some subjects like Maths and Physics have both big gender biases and their related jobs command high graduate salaries.  But our data suggests this is certainly not the whole picture.

Using Higher Expectations data to look at salary expectations by subject area, the expectations of men are higher for most subjects.  Female students expect to earn £4,878 less than males when studying Social Studies and £4,754 less when studying Mathematics or Computer Science. Looking at industries new students hope to enter, in the typically female-dominated Health sector, female students expect to earn an average of £21,700 while males on average expect £23,400. In the typically male-dominated IT/Telecommunications sector, females expect £24,800 when they first start, £5,646 less than male students.

FIG2 – Expected salary for graduates by subject studied [Mean]

Table2 High Quality

Higher Expectations survey 2015/16 in response to: “When you graduate, what do you expect your starting salary to be for your first graduate role?”, numeric response.  Overall base sizes: Female first year undergraduates (7805), Male first year undergraduates (3666). Only JACS 3.0 subject areas with a base size of at least 100 for both males and females included.


Transforming an opportunity into a marketing advantage

We believe that the graduate gender pay gap starts in students’ minds, with males being much more confident and females being more cautious. Other studies confirm that many female graduates aim lower, applying for lower-wage jobs or not considering prestigious graduate schemes at all.

So, what should universities do? Some might argue that if women expect less and get less this is not particularly the problem of universities. Women merely need to ask for the salary they deserve.

However, what if a university could demonstrate their commitment to helping women achieve their full potential?  What if that institution empowered and supported women to apply for the most prestigious graduate schemes allowing female salaries to reach new heights?

Maybe the best place to start is to follow the University of Essex’s example and eradicate the gender pay gap from within. By creating meaningful policies and a genuine commitment from the inside out, it becomes possible to turn this commitment into a marketing advantage. Future employability is much more important to female students, as our Higher Expectations data shows (see FIG 3 below). So, a re-positioning that will enthuse women to realize their potential, and challenge them to join men in dreaming bigger, is likely to create a compelling differentiator for a university in a homogeneous higher education market.

FIG3 – Importance of future employability

Image 3

Higher Expectations survey 2015/16 in response to: “How important were each of these factors in your decision about which university to choose?”, 5pt scale of Very important, quite important, neutral, not very important, not at all important. Don’t know responses removed. Base sizes: Female first year undergraduates (7752), Male first year undergraduates (3633).


Want to understand more about the gender pay gap and the difference in employability perceptions?  Take a look at the data yourself in our comprehensive and easy to use Higher Expectations decision-making dashboards.  Each subscription gives you institution-wide access to our data.

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