Can Working From Home Fix the Gender-Wage Gap?

The pandemic ushered in flexible work policies. Here’s why employers should keep them in place in the post-Covid era.

Katie Toghramadjian thought she had found a job that would allow her to balance her burgeoning career as a civil engineer with the demands—and joys—of parenting. She had two boys under the age of four when she went to work at BRW, a Minneapolis-based company that offered roadway design services. She had negotiated to work remotely, and her schedule was her own. Toghramadjian would check in with her project manager each afternoon to see what assignments she’d have for the day. Then, after the kids went to bed, she would work from 8 p.m. until about 2 a.m., making sure her assignments were completed for the team to pick up in the morning. 

This meant Toghramadjian could care for her children while her husband worked a traditional nine-to-five job at another engineering firm. Despite not putting in the face time around the office, she was well regarded within the organization and did not find that her odd hours were a hurdle to getting plum assignments. It was a win-win-win: The company got critical tasks completed in a timely manner. Toghramadjian was able to keep working in her chosen field. And her young family had child care covered in a way that made sense for their finances. 

But about two years in, an international firm bought BRW and new management arrived. Toghramadjian was given a choice: Come into the office or lose your job. And there was another catch. She’d have to work during normal business hours. 

At first, she and her husband made it work by staggering their hours. He started his day at the office early, so he could pick up their children—by now they had three sons—after school. She shifted her schedule back an hour so she could drop off the boys in the morning. But asking for an hour of flexibility each day came at a cost. Toghramadjian often worked up to 60 hours a week, but she was not classified as a full-time employee. She stayed on for two more years, but eventually left the company and began consulting.

“Because I was part-time, the benefits and salary increases I received were not commensurate with how hard I had been working or the value I was bringing,” Toghramadjian told me. “I really felt that I was hitting barriers in my career, but they were artificial constraints. I had the time and capacity to work. It just would be better for me within my own structure.”

The trade-offs Toghramadjian faced are familiar to millions of American workers. White-collar employers in the U.S. by and large are set up to disproportionately reward employees who not only put in long hours but also work very specific hours during the day. Many have cultures that equate visibility in the office with value and see deviations from the norm as signs of lacking commitment. Caregivers are boxed into a series of difficult choices as they navigate their responsibilities to their jobs and families. And, because caregivers are predominantly women, the setup also creates structural barriers for women in the workforce: Jobs that pay a premium for employees who overwork, or who work very specific hours, are one of the largest driving forces of the contemporary gender wage gap.

Before the pandemic, only a select few—around 7 percent of civilian workers—had access to a “flexible workplace” or teleworking benefit, according to the Bureau of Labor Statistics. But COVID-19 forced a massive remote-work experiment. Companies shut down their offices, dispersing their employees to work at home indefinitely to slow the spread of the virus. In-person meetings were moved to Zoom. Business trips and client dinners were canceled. Industry leaders like JPMorgan Chase and Salesforce began rethinking the need for expansive (and expensive) offices. By May 2020, more than a third of employed adults were working from home. At the same time, school and day care closures meant that parents no longer had someone to watch their children during prime working hours, leaving them to fit in conference calls during naps and finish up projects after bedtime. As organizations settled into remote operations, the lack of face time and the need to accommodate caregivers made it hard for managers to impose the inflexible schedules that made work difficult for everyone—but especially difficult for working parents.

Yet while it’s clear that the vast majority of office work was happening remotely, productivity did not suffer to the extent businesses initially feared. The Pew Research Center released survey data last December showing that 80 percent of people working from home felt that it was “easy” to meet deadlines and complete projects on time. On the employer side, the results were similar. Roughly 83 percent of executives surveyed thought that telework had been a success, and more than half said that productivity actually rose, according to a report published by PwC (formerly PricewaterhouseCoopers) a month later. As the U.S. returns to some sense of normalcy, many workers are hoping that the option to work remotely and with a flexible schedule will become permanent office policy. That leaves company executives and industry leaders faced with a decision: Will they heed the lessons of the past 15 months or, as many are signaling they will do, revert to business as usual?

Economists established decades ago that women earn less than men, even when controlling for factors like educational attainment and experience level. But more recently, researchers have begun to tease out how that wage gap plays out over time and within occupations. These studies have produced a couple of key findings. First, the wage gap between men and women is actually quite small when they start their careers, but then widens considerably once they hit their late 20s and 30s. It starts to narrow again in their 40s and 50s.

The second key finding is why the wage gap gets bigger for women during their prime childbearing years. Claudia Goldin, a leading labor economist and Harvard professor, explains it as a function of employees looking for flexible work arrangements. People who work fewer hours or nontraditional hours see their wages go down disproportionately, according to her research. “Think of it this way,” Goldin said in a recent interview. “If you were working 40 hours a week and said, ‘I only want to work 20 hours a week,’ you might see your salary go from $100,000 to $20,000. The price of that flexibility is high.” It’s no coincidence that the divergence in wages comes at a time when women are starting to have children and need that flexibility. In fact, as Goldin noted, the wage gap between men and women without children is much smaller.

This dynamic is more pronounced in fields like finance and law, where putting in face time and being available when it’s convenient for clients—think early-morning breakfasts and late-evening dinners—are important parts of climbing the corporate ladder. The issue, according to Goldin, is that workers in these industries are not interchangeable and relationships with clients are key to the business model. A consultant, for example, builds trust with clients and over time learns their particular needs, which makes passing off meetings to colleagues difficult. 

At the other end of the spectrum are fields in which workers either have a lot of autonomy over when they work or are somewhat interchangeable. According to the Census Bureau, the pay gap between male and female pharmacists, for example, is close to zero thanks to increased standardization across the field—filling prescriptions is essentially the same from one pharmacy to the next—and the use of networked computers that allow patient information to be pulled up at any store. From the perspective of both the employer and the customer, pharmacists can easily swap shifts. It doesn’t really matter who is doing the work so long as the hours are covered. Similarly, for male and female software developers—who don’t need to be in an office at a specific time to write lines of code—the wage gap is less extreme. (Lower-wage shift workers, many of whom have their schedules set by algorithms, face a different but related problem: too few hours, combined with unpredictable changes to their shifts. That setup creates child care issues, takes a toll on workers’ health and financial stability, and makes it difficult for them to plan for the future. But, as Brigid Schulte, director of the Better Life Lab at New America, chronicled for the January 2020 issue of this magazine, these problems can be greatly reduced by giving employees advance notice and input into their schedule.)

Goldin laid out her thesis in a 2014 paper titled “A Grand Gender Convergence: Its Last Chapter.” She argued that the solution to the wage gap isn’t necessarily government intervention or even getting men to split the housework evenly—though, of course, that has its own merits. Rather, it’s up to companies to change how they manage and pay their employees. “The gender gap in pay would be considerably reduced and might even vanish if firms did not have an incentive to disproportionately reward individuals who worked long hours and who worked particular hours,” she wrote. 

But, at least for white-collar workers, the trend has been going in the opposite direction for the better part of the past half century. Starting in the 1970s, the share of highly educated, high-salaried men working more than 50 hours a week began increasing. Those hours, researchers have found, translated into a substantial bump in wages over time through bonuses and raises. At the same time, more mothers began entering the workforce—by 1980, roughly half of children under the age of 18 had mothers either working or seeking employment—but that didn’t mean couples split the responsibilities at home evenly. Women remained the primary caretakers, a role they disproportionately still fill today. 

“There are some couples that make enough money so they can outsource their child care in a way that allows them both to work demanding jobs, but it’s not typical,” says Kathryn Edwards, an economist with RAND. “We have this massive responsibility of caregiving that comes with being a parent. The school day ends at 2:30. The necessary conditions for dual-earning parents is that someone has to have the flexible job.”

The long-standing lack of investment in child care has made balancing work and family all the more tenuous. Analysts at the Pew Research Center released data in late 2015 showing that 42 percent of mothers have reduced their work hours and 39 percent have taken a “significant amount of time off” at some point in their careers to look after their children or tend to another family member. Those findings were reinforced by a January 2020 report from the Center for American Progress that estimated parents lose about $9.4 billion a year in wages because of child care issues. That was before the pandemic and the ensuing economic crisis, which at its height pushed more than four million women out of the workforce, in part because of day care and school closures.

“Even in the best of circumstances, if someone has the economic privilege to pay for the child care and lives in a community where that child care is abundantly available, the system breaks for people on a regular basis,” says Leslie Forde, founder of Mom’s Hierarchy of Needs, an organization focused on helping parents in the workforce reduce stress and achieve work-life balance. “You could be heading to a big meeting, and you get a call that somebody needs to be picked up because they got sick. School could be closed, or it’s parent-teacher conference day. There are a lot of things that make child care fragile, and that has always been in direct conflict with this culture of overwork that puts an emphasis on face time.”

After Toghramadjian left her job, she quickly spun up a consulting business with a focus on helping roadway engineering firms adapt to computer-aided design and drafting technology. She had hoped that working on small projects for a handful of clients would give her time to be with her boys during the day. The contracts, however, came in quickly, and she found there was so much to do that she had to hire someone to keep up with the demand.

That was the beginning of Isthmus Engineering, which formally launched in the fall of 2002. Within the transportation engineering field, the company is something of an anomaly, in that it’s owned by a woman. And Toghramadjian gives her employees an unusual level of autonomy over their schedules. Each person sets the base number of hours they work per week—30 and above is considered full-time and qualifies for benefits—and designates the hours they are available so meetings can be planned. 

As the company grew and Toghramadjian gave birth to her fourth child, she was landing big projects in partnership with other firms for the Minnesota Department of Transportation to refurbish stretches of roadway and design better intersections. By 2021, her staff had expanded to 36 people, 19 of whom are women—an extraordinary ratio for the civil engineering industry, which is more than 80 percent male. (Isthmus’s retention rate has hovered around 96 percent.) Toghramadjian traces much of the growth back to her philosophy that employees who have balance between work and life are ultimately better for the bottom line. “When you are rested and relaxed, you do better work,” Toghramadjian said. “If you’re feeling at all pulled to be someplace else or if you’re stressed because you hit traffic and you’re going to be late, it takes you longer to get plugged into your work. You are not as productive.”

At Isthmus, salaries are based on core hours, but employees are compensated for any additional hours they work. Anyone can modify their schedules for any reason—aging parents, sick children, or hobbies—whenever they need or want to. “We don’t make a judgment call and say, ‘That’s not worth it,’ ” Toghramadjian said, noting that one engineer shifted his hours to make time to compete in a professional ultimate frisbee league. “One of the things I’ve observed is that when we apply flexibility across the board, young men take time to be with their children. That allows their spouse to have support and go back to work. I feel like we are helping the partners as well.” 

In the past couple of decades, other companies have begun experimenting with similar arrangements. The highest-profile example is Best Buy’s headquarters, which in the early 2000s embarked on a pilot program to rethink its “butts-in-seats” office culture. Around that time, the company had moved about 5,000 employees to a new corporate campus that had a number of amenities, including a coffee shop, a gym, and a state-of-the-art arcade. The common space was supposed to be a hub that brought everyone together to foster collaboration, but very few people were using any of it. “Going to the gym in the middle of the day doesn’t look like work. It looks like you are a slacker,” says Jody Thompson, a human resources manager with the company at the time. “Traditional office culture doesn’t reward that behavior.”

Thompson and her colleague Cali Ressler were tasked with developing a plan to help Best Buy increase productivity, improve retention, and facilitate better work-life balance for their employees. After conducting a series of interviews with employees at all levels of the company, they concluded that the problem boiled down to time—and, more specifically, who was managing it. Hours in the office remained an informal but important measure of productivity. Employees could negotiate for schedule changes and remote work on an individual basis, but the system fostered discontent because it was largely based on whether a supervisor would grant permission. What people wanted instead, Thompson and Ressler realized, was autonomy—the ability to determine where and when they worked—so they could make their jobs compatible with their other priorities.

Based on that feedback, the pair came up with a new management framework called the Results-Only Work Environment, or ROWE. The idea was simple: Give employees the tools and coaching they need to produce the specific results the organization wants by the deadline it sets. Managers would focus on whether merchandising plans were fulfilled, for example, or whether contracts with suppliers were successfully executed. Those who failed to meet expectations could get more training or, in some cases, be fired. But at no point would managers have a say in a person’s hours or where they worked. It required a massive shift in corporate mind-set away from managing people and toward managing the work itself. 

As Thompson and Ressler began rolling out the program in 2004, they met resistance from factions who felt their staff needed to be physically present to maximize efficiency. One high-level executive who was there at the time described it to me as a fight between the progressives who embraced change and the traditionalists who did not want to give up their authority. 

The results, however, were hard to argue with. More than 60 percent of the departments at Best Buy’s headquarters adopted ROWE, and those that did beat their own productivity measures—by as much as 40 percent—across the board, according to the executive. Employee engagement scores, which had been stuck for years, began to rise too, he said. There was also encouraging data around quality-of-life measures. Researchers at the University of Minnesota assessed the program and found that by giving people more control over their schedules, ROWE led to an increase in the amount of sleep and exercise employees were getting and made it more likely that they visited the doctor when they were sick. For parents in particular, the changes were monumental, Thompson said—the perception that they were less committed because they didn’t work enough or were working odd hours began to fade. 

Despite these successes, Best Buy killed the program in 2013. The company was in financial turmoil, and the new chief executive who was brought in to turn things around thought ROWE was a flawed leadership model. But by then, Thompson and Ressler had left to launch their own consulting firm, CultureRx, with a goal to bring ROWE to more businesses. Much of the interest in the model has come from organizations based in other countries, especially Canada. American companies have been more reticent to sign on, Thompson said. She chalks that up to a fear of committing to such wholesale change. “ROWE is like being pregnant,” she said. “You either are or you aren’t. There isn’t a way to ease into it.” 

For most U.S. workers, the level of autonomy ROWE affords may feel out of reach. Only about 12 percent of civilian employees have access to flex time, according to the Bureau of Labor Statistics. Even if a company does offer some flexibility, the programs are usually optional, and it is up to individuals to negotiate for alternate arrangements.

Over the past two decades, a number of studies have documented how the uneven application of these policies creates a stigma for those who reduce their hours or take time off from their job. The research is clear: Men and women who seek flexibility are considered less dedicated to their employer and fall short of the “ideal worker” archetype—a bias even more hazardous for people of color, who often have less support from their managers. 

The issue is further complicated by long-standing gender norms. A 2019 paper by researchers from Florida State, Harvard, and McMaster University explored how opt-in flexibility policies played out at a midsized global consulting firm. The company had brought in the researchers to make sense of why women weren’t advancing to leadership positions even though executives had invested in a number of family-support policies. The researchers found that while both men and women expressed frustration with the strain of juggling long work days and home life, women were almost exclusively the ones who switched from client- to internal-facing roles and ratcheted down their hours—an acceptable trade-off in a society that expects women to prioritize motherhood. Few men made the same choice because of the pressure they felt to put work above all else. These well-intentioned policies had the effect of solidifying gender norms, ultimately directing women off the path to senior roles and, in some cases, out of the workforce entirely. 

These entrenched norms have begun to clash with the way younger Americans see themselves and the way they expect to raise their families. Data shows that attitudes have shifted dramatically from the 1970s, when only about a quarter of Americans supported parity between the sexes. Now, more than two-thirds believe that men and women should have equal claim to both careers and parenting. Egalitarian values are especially common among Gen Xers and Millennials, many of whom grew up watching their mothers go to work and having their families depend on that income. 

Many men and women are looking for egalitarian relationships, says Kathleen Gerson, a sociology professor at New York University, but because they expect long hours at the office and see a general lack of reliable child care options, men are falling back on a Plan B: putting work first and depending on their partners to deal with the bulk of responsibilities at home. The decision is often a pragmatic one: The premium one partner can earn for working long hours combined with the inflexibility of office culture typically makes the equitable division of labor at home difficult or financially impractical. 

Enter COVID-19, which exposed many of these fault lines and also forced many organizations to cede control over their employees—especially parents, many of whom had to balance Zoom meetings with Zoom school. For some, working from home had a silver lining: It allowed people to cut down on their commutes and spend more time with their families. One marketing executive who is a mother and works for a major financial services company in the Northeast explained it this way: “I’m not rushing to get my son from day care or leaving work to get him if he’s sick. I can actually enjoy time with my family.” As a manager herself, she made sure her team had the flexibility they needed to deal with the pandemic. “It really came down to, ‘I don’t care what you’re doing when, as long as you get your work done on time,’ ” she said. 

Whether changes like these stick remains an open question. As more Americans get vaccinated, a debate is unfolding around how much face time is really necessary for office workers. More than half of those surveyed in the January PwC report said they’d like to continue working remotely at least three days a week after the pandemic. Businesses including Google, Ford, and Target announced plans earlier this year that they will allow corporate employees to telework a portion of the week while requiring some of their time to be spent in the office. And for demanding jobs built around client relationships, the pandemic has proved that presentations can be made and deals can be struck over Zoom. “The horse is out of the barn, and this is a perk that will need to be offered to attract the best talent,” said Kathy Regan, chief operating officer of the Commonwealth Fund, a foundation based in New York City that is also planning for a hybrid approach after Labor Day.

Even Toghramadjian will make adjustments at Isthmus based on what she learned during the pandemic. Her staff already had the option to work from home, but few took advantage of it. She wonders now if her employees sensed an unwritten rule around remote work, and she has begun choosing her words carefully to make sure she doesn’t send the wrong message. “Many of the companies in our industry are talking about going back to normal and back to the office, and we’re not using that language,” she said. “We don’t want to stop people from coming in, but I also don’t want them to be there just because they feel obligated.”

On the other end of the spectrum is Goldman Sachs, which sent a memo to its staff in early May announcing that its U.S.-based workforce would need to be back in the office by June 14 because the firm’s “culture of collaboration, innovation and apprenticeship thrives when our people come together.” WeWork CEO Sandeep Mathrani also made the argument that people need to be in the same space to be productive, saying at a Wall Street Journal conference, “Those who are least engaged are very comfortable working from home.” (Mathrani, of course, is not an unbiased observer: He runs a company that leases office space.) Cathy Merrill, chief executive officer of Washingtonian Media, wrote an opinion piece for The Washington Post on May 6 warning that people who stay home may be downgraded from full-time employee to contractor status or lose their jobs altogether because “the hardest people to let go are the ones you know.”

While the vast majority of office work has been happening remotely during the pandemic, productivity has not suffered to the extent businesses initially feared. In fact, more than half of business executives say it went up, according to a recent report.

Both Mathrani and Merrill wound up apologizing after an online backlash, but their comments highlighted why the movement toward remote work and hybrid schedules will face hurdles. For many, splitting working hours between home and the office is a reasonable compromise that allows for some flexibility without completely sacrificing the in-person interactions that create trust among colleagues and natural opportunities for mentorship, feedback, and collaboration. But optional work-from-home policies could create a new form of hierarchy, says Pooja Jain-Link, an executive vice president with Coqual, a think tank focused on addressing barriers to underrepresented groups in the workplace. If office culture hasn’t fundamentally changed and remote work remains a deviation from the norm, optional hybrid schedules could create two tiers of employees—the go-getters who choose to come into the office and the slackers who stay home—further stigmatizing caregivers. “Does this just become another way to penalize people?” she asked.

That’s a concern that Thompson, from CultureRx, is actively trying to address. Since the pandemic began, about 100 organizations—roughly 70 percent of which are based outside the United States—have approached her firm to learn more about ROWE. What she stresses with each of them is that they can’t just take traditional office schedules and apply them at home. Few at this point have decided to make the leap. COVID-19 may have bent workplaces toward more flexibility, but Thompson and others who embrace autonomy for their employees remain ahead of the curve. “What companies are doing now as they are pulling out of the pandemic is they are getting more and more granular on the hybrid approach, what job codes can work from home, how many days in the office do we need people,” she said. “It’s still about control of people instead of control over the result.”

Whether or not autonomous work models take hold over the long term, there may be some help from Washington on the way. As part of his infrastructure plan, President Joe Biden has proposed a number of initiatives designed to support working families. The investment would be substantial: His plan calls for spending hundreds of billions of dollars on free preschool, subsidies to help low- and middle-income families pay for child care, and 12 weeks of paid leave for all workers that could be used for a variety of reasons. It represents the first major attempt at the federal level to address the strain on families since Bill Clinton signed the Family and Medical Leave Act in 1993. 

That Biden is framing these policies as infrastructure is important in and of itself. It’s official recognition of what economists and activists have been saying for years: Policies that support families help move the economy forward. It’s a critical piece of the post-pandemic recovery, especially for women—nearly two million of whom remain out of the workforce and who disproportionately carry the weight of caregiving responsibilities. A large share of workers can’t return to their jobs until there is someone to watch their children.

As of this writing, Biden’s proposals were still working their way through Congress. But even if all of the measures sail through, it’s not the end of the story. When it comes to closing the gender wage gap, addressing overwork and the stigmatization of employees who ask for nontraditional schedules is key. 

The power to make that shift lies with managers and executives. The pandemic has proved that it’s not necessary to require employees to be at the office from nine to six each day. It’s clear now that if you give people flexibility, the work still gets done. The question is whether employers recognize this moment for what it is: an opportunity to make work and life radically better.

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Laura Colarusso

Laura Colarusso is the digital managing editor for GBH News in Boston. Her work has appeared in Newsweek, The Boston Globe, and The Daily Beast.