New research reveals why salary alone doesn’t attract women to leadership roles — and what Canadian HR teams can do instead
A new study out of Germany has revealed a critical reason why women continue to be underrepresented in leadership positions — compensation.
The results point to deeply entrenched stereotypes — not leadership experience or qualifications — as the real barrier to women's advancement. Specifically, women are less likely than men to apply for leadership positions when the roles are associated with higher salaries.
“High salary actually changes the stereotypes connected to the role,” says Paula Scholz, PhD candidate in the Department of Corporate Development at the University of Cologne.
The research involved experiments with almost 1,000 students to examine how salary levels and leadership experience affect women’s willingness to apply for leadership roles. Participants were randomly assigned leadership or team member roles in a public goods game. They were later asked how much they’d be willing to “pay” to apply for a leadership position again — one with a low (10%) or high (50%) salary bonus.
“I wanted to learn why we see this 'broken rung' when women try to climb the career ladders, from entry level position to the first managerial position, because this is actually the step where we lose so many women,” says Scholz.
"There has been research on this topic, but I wanted to test also which role does salary play, and experience."
Scholz found a clear gender gap when the salary increased: “We do not observe this gap if there's a... relatively low salary for these positions.”
The critical finding was that salary alone altered how the leadership position was perceived.
“If the participants in my study received a lower salary, the position was perceived as a female-type position, whereas holding everything as fixed, but just increasing the salary, the stereotypes change, and the position becomes perceived as male type.”
The study also tested whether leadership experience would increase women’s interest in future leadership roles. Scholz hypothesized that hands-on exposure could build confidence and reduce self-doubt.
“The first thing I tried to understand in my study is whether it helps to expose participants to make the leadership experience themselves, that this reduces maybe the missing self-confidence of women about their leadership skills, and make them apply to this [higher paid] position more often.”
But that approach didn’t close the gap -- even with equal success at the leadership game, the perception shift tied to salary persisted, found Scholz.
The findings are consistent with broader observations in many professional environments. Scholz points to common office patterns that reinforce gender roles in unpaid or low-promotability work.
“Most of us know this anecdotal evidence that, for example, women are the ones who organized the Christmas parties at the firm... not men,” she says.
These types of roles are often accepted by women and do little to advance careers: "And they are typically also... not coming with higher pay or the prospect of having higher pay in the future," says Scholz.
This and other workplace inequities have led to an association or stereotype of higher salaried roles being "male", she explains.
"We do see this gender gap at the top, that we have more men in the top leadership positions, who then also, of course, earn more than the lower ranked positions." she says.
“And that's why I think there's also this stereotype ... that people are used to seeing men in highly paid positions, but women are less often observed in these positions.”
The study’s main insight is that how a role is described can alter who applies — and HR leaders should focus on what’s emphasized in job ads.
“We have to work against these instilled stereotypes which make women maybe shy away from applying to these leadership positions,” Scholz says.
She emphasizes that this isn’t about misleading applicants, but highlighting accurate elements of the role that may appeal more broadly.
“This might be the communication aspect of leadership. So we know that, for example, CEOs spend 70% of their time interacting with their colleagues," Scholz suggests.
"If we're just stressing different parts of leadership, we might attract different applicant pools -- not deterring men from applying, just increasing the applicant pool by reaching more women."
To make real progress, Scholz recommends A/B testing job ads and strategies: "They should test all these interventions and changes in their job paths to understand what is really helping,” she says.
“Not just saying, 'Okay, we believe this helps,' but really test with an A/B test.”
The research makes clear that lowering pay to boost gender equity in leadership isn’t a solution; rather, Scholz says the main takeaway is reducing ambiguity about role responsibility.
Even where pay transparency rules are in place, detailed and inclusive job decriptions can result in a more diverse field of applicants.
“The solution is not to just pay them less or or hide what they would earn,” Scholz says.
“Maybe it should come with specific job description of what they can expect, what this role is actually about.”
She also advocates direct outreach and encouragement of women applicants for high-salary positions, explaining that ultimately, creating better balance in leadership pipelines requires dismantling persistent stereotypes — and doing so intentionally.
“Maybe we have to directly encourage people or women to enter these jobs, to just approach them and say, 'Hey, this position might be good fit for you.'”
Scholz team also encourages organizations to work with academic researchers to do this well; this process could be helpful for organizations that are under-resourced, or don't have the particular skills to conduct such tests.
“What we usually recommend is cooperating with the research department from some university or research institute,” she says.
“They have the expertise in how to conduct these tests, and they are always happy to receive the data and understand how we can actually improve gender equality, for example, for leadership positions.”
She also clarifies that international partnerships are welcome. “It doesn't have to be a Canadian university. We are also happy if Canadian firms approach us and say, 'Hey, we want to understand this... and then we can, remotely, work on this together.”