To Get Paid More, Cultivate Your Network!
Before the great recession, an author in Canada, reported that women executives have a harder time than their male counterparts finding a new job after they've been let go. If that isn't reason enough to focus a portion of your energy on developing a smart strategic network (as differentiated from a lot of friends), a new study by Marie Lalanne and Paul Seabright of the Toulouse School of Economics adds another. Improved compensation for executive director positions!
As reported in the Economist:
"They find that if you were to compare two executive directors, identical in every way except that one had 200 ex-colleagues now sitting on boards and the other 400, the latter, on average, would be paid 6% more. For non-executives the gap is 14%.
The really juicy finding concerns the difference between the sexes. Among executive-board members, women earn 17% less than their male counterparts. There are plenty of plausible explanations for this disparity, from interruptions to women’s careers to old-fashioned discrimination. But the authors find that this pay gap can be fully explained by the effect of executives’ networks. Men can leverage a large network into more senior positions or a seat on a more lucrative board; women don’t seem to be able to."
As an explanation of why women execs have a harder time getting a new job, their findings also speak to the importance of "weak ties" (that we've written about).
"According to Granovetter, the social connections that are the most valuable when looking for a job are not the closest ones but the more distant ones. Strong ties, such as close friends and relatives, are more likely to have similar information concerning job opportunities, while weak ties, such as acquaintances and coworkers, are more likely to move in different social circles and to have access to different information about job and other opportunities."
Although the cited research applies to the most senior women, it is of use to all of us. The time to cultivate your strategic network is when you don't need it!