Why it pays for women to go solo

Almost 50 years after the Equal Pay Act (1970) was passed in the UK, some organisations seem to have been unable or unwilling to change.

While persistent gender pay gaps may to some extent be explained by the fact that a large majority of lower paid roles are filled by women – care work, cleaning and catering jobs, for example – even at the other end of the income scale gaps can still be found.

What is encouraging employers, sometimes highly regarded “blue chip” names, to maintain these gender pay gaps, which are not only clearly unfair but quite possibly illegal as well? Why has progress on this issue been so slow?

Some new evidence uncovered by the Eden McCallum/London Business School (LBS) Future of Consulting survey helps explain what may be going on.

Eden McCallum is the now almost 20-year-old consulting firm which has pioneered a network model of operating. It has a small permanent staff and access to a network of over 1,500 experienced management consultants, most of whom have spent many years working for top consulting firms such as McKinsey, the Boston Consulting Group, Bain & Co and Accenture, and who now prefer to work as freelance or independent consultants.

This is the second year that Eden McCallum, together with LBS, has asked its associates and other consultants about their attitudes to work and their experience of life as independents. And one finding is particularly striking: the gender pay gap for women consultants disappears rapidly when they put their former existence as employees behind them and set out on the path to the independent life.

This year’s survey shows that, while there was an almost 30% gap between what male and female consultants were paid as full time equivalents at their previous employers, once both men and women are working as independent consultants their day rates show just a 3% gap .

Indeed, it is almost as if some women consultants had a sense that this sort of shift might be possible. Going independent was a deliberate choice for 60% of them, according to the survey, while only 46% of male consultants had actively chosen the independent route.

Take Filiz Derici, a Swiss-based consultant who has been independent now for five years having worked previously for both BCG and McKinsey. Going independent has turned out to have been a very positive choice. Derici’s income is higher now than it was as an employee, and she can reach that level of earnings working several months fewer a year.