Are RTO mandates the new glass ceiling?

For the first time since the 1960s, the gender pay gap is widening, and experts believe a growing divide over workplace flexibility is playing a major role

NEW RESEARCH IS helping explain why the gender pay gap, which had been on a long-term trend of narrowing, has “suddenly widened” — and it’s at least partly down to everyone’s favourite acronym, RTO.

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Researchers from Baylor University recently released a report that found women in the tech and finance sectors have been experiencing a turnover rate nearly three times that of their male counterparts at companies that have announced in-office mandates. Layered over top of that is the additional finding that RTO pushes mid- to upper-level employees, as well as high-skilled employees, out the fastest. Combine them, and you have a cocktail of factors that start to explain the widening pay gap.

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It isn’t an entirely new story — we’ve known for a while that RTO was increasing turnover, and it’s not the first study to find that turnover concentrated among higher-skilled employees. The assumption might have been that companies were losing them to other more flexible and remote companies, a function of their higher-skilled bargaining power.

The Baylor study, however, suggests “that the cause for leaving a firm after RTO are not the usual reasons for promotion or mobility. Instead, they highlight that employees are willing to sacrifice career advancement for remote work options.”

The Baylor study also found that 46 per cent of women ordered back to the office had negotiated lower-level, but more flexible, positions. Forty per cent took lateral moves with the same goal in mind. When women weren’t pushed out of companies altogether, many were willing to take a jump down the corporate ladder just to remain more flexible.

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Put it altogether, and you have a plausible explanation for a widening gender pay gap, rooted in differences in attachment to flexible and remote work.

“The timing [alongside RTO] is striking,” said Flex Index. “The wage gap has widened two years running; women now earn 81 cents on the dollar, down from 84 cents in 2022, the lowest since 2016.” Kieran Delamont