Groundbreaking new research by five economists sheds some fresh light on the gender pay gap and points the way toward a needed shift in the way that organizations approach diversity strategy. Spoiler alert: the findings provide more support for SHAMBAUGH’s assertion that the metrics-based way many companies still approach diversity strategy—relying on numbers to measure success for gender balance and D&I representation rather than examining behaviors—is flawed.
Here’s the evidence:
The 2018 study examined the pay of over a million male and female Uber drivers to try to determine whether there would be a gender-based earnings gap, and if so, what caused it. The key here is that rideshare drivers are part of the gig economy and have flexibility to set their own hours, and the algorithms that Uber uses to determine pay are gender blind. So the study’s authors (who are from Stanford University, University of Chicago, and Uber) initially speculated that this platform would help level the playing field between men and women when it comes to earnings.
But when they discovered that in fact there was still a gender pay gap of 7 percent among the nearly 2 million Uber drivers studied from 2015 to 2017, they knew other factors were at play. It wasn’t a simple matter of numbers—behaviors and actions were behind this particular gap. Those factors turned out to be linked to three very specific gender-based actions that reflected the decisions that female drivers made compared to male drivers:
- Where and when to drive (men on average selected locations with lower wait times and higher surge)
- Driving speed (men on average drove slightly faster so earned more)
- How long they stuck with the platform (women were more likely than men to stop working for Uber after 6 months, and as less experienced drivers earned less per hour)
The result of the aggregate of these three choices meant women pocketed 7 percent less than men. So if we want women in the rideshare industry to eliminate the discrepancy, there are three clear pieces of advice we can give them:
- Drive more strategically. Choose to drive locations with lower wait times and higher surge—such as the airport.
- Step on the gas. The male drivers were found to drive just slightly faster (2.2 percent), but it made a difference to their bottom line.
- Boost your experience on the platform. Once Uber drivers have made more than 2,500 trips, they average $3 more per hour than newbies with less than 100 trips.
I highlight these actions not to point fingers at women in the sharing economy—as a recent Freakonomics interview about the Uber study pointed out, there are many societal reasons that might explain why women are making the choices they are in rideshare that mirror that of other industries like law and finance. Women may be leaving sooner because of having more family or caregiver responsibilities, for example. (See my article in Harvard Business Review: “The Time-Consuming Activities That Stall Women’s Careers.”)
Instead, the reason I’m noting the specific factors behind the Uber gender pay gap and showing behavior changes that could even out earnings is to reveal what can happen when we start having less of a numbers/metrics conversation, and more of a behavioral conversation. When it comes to implementing solutions, the example above indicates that actions can speak louder than numbers. Here are some general pointers toward how to make this mental shift:
Hone in on the “what” not the “how many.” While metrics reveal where the representation is—repeatedly showing women making less—nothing changes if no behavioral changes are made from a cultural and/or individual level. Research like the Uber study shows exactly where men, women, and the rideshare industry can target their efforts to try to eliminate the gender pay gap for female drivers. The same type of strategy can apply to other industries, and should be considered when setting strategy around gender equity and diversity initiatives.
Change your lens. Gaining awareness is the first step toward recognizing how we need to see things differently and shift behaviors to move from the current state to a desired future state. So if in your organization, you become aware of an arena where there is not gender equality, adjust your focus to move away from measuring the discrepancy to identifying what exact behaviors need to change for both men and women. Then look at the organizational culture and make alignments to support and reinforce these new actions.
Redefine what indicates progress. It can seem difficult to redirect away from a numbers focus, particularly in the tech industry where it’s all about stats, measurement goals by numbers, and research data. It may seem harder particularly in such industries to immediately measure what the ROI is for a shift in behaviors versus the traditional data-driven way of approaching diversity and measuring progress…but it doesn’t have to be. The goal is simply to flip our frame of reference when it comes to determining what success looks like, redefining what indicates progress.
If we want to move the needle forward for gender equality, then it’s time to disrupt the traditional ways of measuring our successes. We must focus less on metrics and more on changing very specific behaviors that can impede or advance diversity and inclusion.
SHAMBAUGH helps our clients focus on the core of why there is a pay gap or imbalance when it comes to gender or diversity. We work with our clients to click beyond the diversity data to the reasons that the gap exists, and then help identify what behavior shifts need to happen individually and institutionally. Reach out to me directly at email@example.com to learn more.
To learn how you can engage men and women as allies visit our website at www.shambaughleadership.com
Rebecca Shambaugh is the Founder of Women in Leadership and Learning, a regular contributor to Harvard Business Review, and blogger for the Huffington Post. She is author of the best-selling books It’s Not a Glass Ceiling, It’s a Sticky Floor and Make Room for Her: Why Companies Need an Integrated Leadership Model to Achieve Extraordinary Results.