Hidden Costs

A fundamental rule of accounting is the “full disclosure principle,” which posits that a company’s financial statements must include all data points necessary for shareholders to make informed decisions.  

But as Accounting major Mengyao Lu ’21 learned during her Honors capstone research project — for which she received a Best Scholarly Capstone Award — its importance extends beyond the balance sheet. That’s why Lu wants to make sure that women considering a career in the financial services industry are aware of what she discovered: They’ll likely encounter gender bias in the workplace — and contending with it can take a significant psychological toll.  

Lu’s research builds upon existing studies about stereotype threat, which occurs when people worry about confirming negative characteristics ascribed to their racial, ethnic, gender or cultural group. Whether acute (immediate and temporary) or chronic (gradual and persistent), stereotype threat creates self-doubt and anxiety for those who experience it, adversely affecting job performance and emotional health.  

Lu notes that while American women account for more than half of all entry-level finance jobs, few advance to executive roles: In 2020, women comprised just 26% of C-suite positions. “The daily experience of being one of the ‘only’ in the room,” she says, is a constant, if subconscious, reminder of their perceived value in the industry. This awareness is compounded by the fact that women in entry-level positions are paid 20% less than their male counterparts, receive 24% fewer promotion opportunities, and are less likely to be sponsored or mentored by senior leaders.  

The COVID-19 pandemic has further amplified these challenges by blurring the boundary between work and family. As Lu explains, “Women face the ‘double burden’ of managing their work roles as skillful employees and their social roles as caretakers.” The cumulative effect is a sustained diversion of mental energy that leaves women feeling disengaged, emotionally exhausted and increasingly likely to leave their jobs.

BATTLING BIAS

Lu understands firsthand what it’s like to be one of the ‘only’ in a room. Growing up in China, she remembers feeling disconnected from her peers because she wasn’t fond of math. “It’s very common for Chinese students to take advanced math courses,” she explains. Lu didn’t, but nearly all her classmates did — and the judgment she felt from her teachers and fellow students undermined her confidence. 

After learning about stereotype threat during a Human Behavior and Organizations class with Dr. Mateo Cruz, assistant professor of Management, Lu made the connection with her earlier experience. Having discovered that she’s pretty good at math after all — Lu credits “great professors here who believed in me” for the revelation — she decided to make “the pervasive and persistent stereotypes about women’s poor math skills” a focal point of her Honors research project, enlisting Cruz as her advisor. 

In addition to accounting, Lu double majored in Liberal Studies: Quantitative Perspectives and minored in Psychology. Insights gleaned from each helped her create a survey to assess the relationship between stereotype threat and turnover intentions. With help from Cruz, her other Bentley professors, and the Center for Women and Business, Lu sent the survey to nearly 100 women working full-time in banking, investing, insurance, and tax and accounting services. She found that women employ two distinct social identity management (SIM) strategies to mitigate the gender bias they encounter. 

In the first strategy, known as social recategorization, women adopt specific behaviors to distance themselves from negative gender perceptions. This includes downplaying their femininity — for example, not wearing jewelry or avoiding conversations about their children — and well as adopting masculine characteristics, such as wearing short hair and suits or speaking in lower tones. 

Those who employ the second strategy, known as positive distinctiveness, seek to celebrate rather than suppress their gender identity. Such women, Lu says, “may publicly advocate that gender-based stereotypes are inappropriate.” They may also actively display the attributes for which they’re marginalized, such as using compassion and empathy to “provide emotional support for subordinates and create a more harmonious and collaborative working environment.” 

CHANGING CORPORATE CULTURES

Survey results confirmed Lu’s initial hypothesis that women who experience chronic stereotype threat are more likely to leave their jobs. But she found a significant — and surprising — difference in turnover intentions for practitioners of each SIM strategy: Women who engage in positive distinctiveness and advocate for themselves and other women are more likely to leave their jobs than women who suppress their gender identity through social recategorization. 

Though both strategies have adverse effects, Lu found it particularly disheartening that the women most invested in transforming their work environments were most likely to leave. For her, this underscores that women shouldn’t feel the need to monitor or modify their behavior to conform to workplace expectations; rather, the onus should be on companies to create more inclusive cultures. 

Indeed, Lu’s research found that gender bias can be mitigated by perceived organizational support. In other words, the more female employees believe their company values their contributions and supports their well-being, the less likely they are to experience chronic stereotype threat and choose to leave. This is important, Lu says, in that it provides a specific area where companies can focus their efforts.  

As she embarks on her own career in financial services as a business tax consultant for Deloitte, Lu is hopeful that research like hers can increase awareness of gender bias and encourage companies to do more to support female employees. In her view, “understanding gender dynamics and creating opportunities for women’s success will benefit everyone.”