#10 - The Masculinization of Wealth with Katica Roy
Transcript from interview #10 - The Masculinization of Wealth with Katica Roy
Welcome to the I ALSO Want Money podcast, where our mission is to democratize, demystify and demasculinize making money. I'm your host, Nicole Kyle, and I'm here with my co-host, Sophie Holm and ally, Harrison Comfort.
So we all know wealth has been masculinised for forever in society and it's had real, negative implications for how women interact with, or don't interact with, money. Companies obviously play a huge role in perpetuating this idea that wealth is a male domain. We see that in hiring decisions, what leadership teams look like and, of course, in the gender pay gap and other forms of compensation. Our guest, today, Katica Roy, is improving gender equity at companies. She's fighting to close the pay gap, and thus, close the gender wealth gap. Her company, Pipeline Equity, helps workplaces become more gender equitable and actually quantifies the relationship between increased company revenues, and gender equity. Her AI and algorithm scores companies on gender equity and pinpoints areas of unconscious bias in those hiring decisions and in those promotion decisions, among others. Katica will talk with us today about how economic control for women is the key to closing that gender wealth gap, and how that economic control is enabled by companies actively improving gender equity. So with that Katica Roy, welcome to the podcast. Thanks for joining us.
Katica Roy: 1:38
So, Katica, I want to frame our discussion today, really, In two ways. But they both center around this idea that you've pioneered, which is the masculinization of wealth. The idea that wealth is a space for men. We, in advance of this podcast, we circulated this idea, and this term to our girlfriends and so many of them really attached to it, because it's finally this phrase that helps us define what we've all been feeling for such a long time. So now having a way to talk about it is really powerful. The one kind of roadblock we hit, though, is that when we pressed our girlfriends further when we charged ourselves with thinking about this, we really struggle to define what it is. So I want to ask you two questions to tee this up. The first is, how do you define the masculinization of wealth? And second, how does the masculinization of wealth manifest for the average woman in her day-to-day life?
Katica Roy: 2:38
The masculinization of wealth, and the masculinization of money, is primarily about money and wealth being assigned to men. When we think about that, often we think about men, in general, which is not actually... if you look at the numbers, for instance, there's a 37 point gap in the richest Americans between women as 51% of the population, but only 14% of the wealthiest Americans, just in the US itself. So we tend to assign wealth to men versus to women. It also impacts the narrative in terms of women and who is responsible with money versus irresponsible [with money]. There tends to be a narrative that women are not as good with money, which is actually, if you look at the data, debunked, and not true. We also don't take into account that not only do women have less money coming into their wallets in terms of the pay gap, on average, they actually have more money going out of their wallets, particularly in terms of import taxes in the US as well as student loans.
How do we de-program ourselves from thinking of wealth as masculine?
Katica Roy: 3:58
The first place to start is the numbers, is to understand that... debunking the myth that women are not as good with money as men. That's just simply not true. The other place to start is to help women to actually embrace things like investing and investing in the markets and owning their own wealth. I think that's an important piece. And I think a shift that we've actually seen in terms of breadwinners, just in the US alone, but more broadly of women being the breadwinners in their family, being part of the labor force, as well, but that part of actually investing and having their own money.
I recognize we're talking about a different country, but in the United Kingdom, it's as likely for a woman to be a breadwinner as it is for a guy. Yet women invest far less than men do. So would just be curious to get your perspective on why that dynamic exists?
Katica Roy: 5:05
Well, we've mostly money and investing a male domain, not a female domain. The idea that you might experience bias from financial services is highly likely. I have experienced that. So that's one, we need to change that dynamic and how we actually treat our customers and their investments and respect and assume that they actually do know about money and how to manage their money, that's one. The other piece of that, you know, the breadwinner pieces is important from an economic control perspective. The other piece that we need to work on, and this is not just in the US but in the UK, and more broadly, globally, is closing the pay gap because on average, women actually lose money for every child that they have when they are breadwinners, so they're less likely to have discretionary income to invest.
Katica, given what you just said there, the fact that we have all this evidence that shows when women have money, they're actually better with it than men. You know, we know that these gender roles are stereotypes, rather, don't play out in reality or shouldn't play out in reality. What is the key in your opinion, for us as individuals to overcome this idea, that wealth is exclusively a male domain?
Katica Roy: 6:32
Economic control. You know, I think if you're the breadwinner in your family and you make the money, you're far more likely to have more say about how that money is used, and, what it is used on,. So that's one. And that, so you know, certainly we've seen a lot of progress toward closing the gender, the education attainment gap for women, globally. Now we need to increase labor force participation. And then wages is another piece of that. So, you know, there certainly is a point around, negotiation, but there are some studies - or even asking for more money. But there are some studies that show that women actually ask, they negotiate as often as men, we just don't win as often. And there's a negative perception of us. And the more damaging aspect of that narrative around women don't ask, or we need to teach them to negotiate, is this idea that if only women would do something differently, we'd be more equal. And the issue is that women are broken, the system is broken. It doesn't value us equitably because it wasn't created to value us equitably, and so that's what we need to actually change, is the system to value women equitably. I think it's actually really interesting. So you know, I'm gen X, but the generations coming after me, Millennial and Gen Z, have a really different perspective in terms of marriage and children and economic opportunity for the genders. And I think that's a very interesting dynamic coming up in terms of how things will begin to change.
As a guy, I feel like men have a role in helping change this backwards perception. So how can men be part of the solution here instead of continuing or enabling this systematic problem?
Katica Roy: 8:31
Well, there's two pieces. The first one is that, when we talk about gender equity, we talk about it not as a synonym for women's rights, but women are half the conversation and men are the other half of the conversation. And to your point, not just because men hold the majority of leadership roles and are making these decisions but also because gender inequity impacts them, too. And just like one example is that 48% of working dads would like to be stay-at-home dads, right? So that's a different role for them in society. The other piece of that is that we know that more gender diversity leads to better returns. We know that from traders on Wall Street. We also know that in research that Pipeline has done in terms of connection to revenue, I think it's often termed as a us versus them, but it's not actually us versus them. Fundamentally, gender equity is about equity for all. So I think when you're talking about involving men in the conversation, we would all like better returns on our investments. And gender equity is a really key lever to pull to actually have better returns. Just in the U. S., we could add 512 billion to the economy through closing the gender pay gap. And that holds true for other countries as well. So it is really about economic opportunity and leaving returns on the table through not closing the gender pay gap.
Yeah, exactly. And framing gender equity as a win for the company and improving the company's top line - the revenue is improving their bottom line - not just as a win for, of course, the individual woman.
Katica Roy: 10:26
So, Katica, you can't see us, but I was snapping my fingers in the room here when you mentioned the idea that it's not women who are broken. It's the system, and that really resonates with me. And I think it's such a powerful message. I've just been thinking back, even to my own experiences where you know the few times you do work up the courage, let's say in a pay negotiation to ask for more, it's almost as if you're double tax for being a woman, right? Because you're a woman to start out and day one on the job, you're probably being paid less than your male co-worker. And then, if you do work up the courage to ask for more, you're then not likable, and you may not get that raise because you're not the likable woman and following those kinds of traditional gender roles. So I totally hear what you're saying.
Katica Roy: 11:21
Yeah, well, you also don't pattern match who is in leadership. I mean, which has a lot to do with that very first promotion as well as what roles you're promoted into and how many resources you control because oftentimes we don't look. I mean, fortune 500 companies. I think it's 7.4% right now, have female CEOs, right? So the majority don't. So when you're actually promoting people, women don't look like who you're promoting, and they certainly don't look like who you're promoting in power roles such as P&L rolls, etcetera.
I have to admit, I'm a little bit of a geek when it comes to numbers. And we came across this study that surveyed over 15,000 U. S. Companies, and it stated that for every dollar of equity that a male full time employee gets, and we're not talking about founders here, the average woman only gets 49 cents. So how important is ownership and having equity in terms of driving these types of changes?
Katica Roy: 12:29
Well, that's where you build wealth. You don't build your wealth off... I mean, your salary is great and you can certainly save just discretionary income and save your cash bonus, but you build most of your wealth off of equity. Well, the shares themselves may not have a lot of voting rights, if you're just an employee. That's a different conversation from a founder, but they will have a large impact on the ability to grow wealth. And that's equity.... the equity and companies, whether you're working for a startup in Silicon Valley or you're working for a Fortune 500 company and you reach the executive level, and either get options or restricted stock units, RSUs. Either of those will have a profound impact on your ability to create wealth. But it speaks more broadly to the value that we place on women as employees and their equity. Because typically, you know, when you are giving equity to an employee who is not a founder, you are placing a value on them to the company. It is a way to essentially retain them right, keep them tethered to your company, and so, the higher you value them typically, the more equity you would give them to have them stay, you know, at your company. So I think it's more a function of the value that we place, or don't place on women, versus women. maybe not being aware of that.
So Katica just switching gears a little bit, here at the podcast... we're huge fans of the work you do at Pipeline Equity, and I'm truly fascinated by what you're doing. Certainly speaking for myself, I wish my organization had a solution, like Pipeline Equity. I know maybe Harrison, Sophie feel the same about their prior workplaces. Do you have any advice for a young millennial woman working at a company for how she can maybe message a solution like Pipeline Equity to leadership?
Katica Roy: 14:45
The first piece I would talk about is that gender equity is not only a social issue, it's in fact, a massive economic opportunity. So based on the research that Pipeline did across 4,000 companies in 29 countries, what we found was that for every 10% increase in gender equity toward parity, so toward 50-50 there's a one or 2% increase in revenue. So starting that conversation from not only the right thing to do, but also the smart thing to do that it actually expands the economic footprint of your company is where I would start that conversation. The second piece of it... it has to do with labour economics. So a few things that we have seen. There are three things that we've seen in terms of the composition of the labor force and a change over the last three years. One is that women have increased their labor force participation. So in the US.... so 1.1 million more women have actually come into the workforce between 2017 and 2019. The second is that while women have been the most educated cohort in the US - they are 57% of all college graduates - they haven't actually been participating in the labor force. We actually saw that change in Q1 of 2019. So a year ago, where now the most educated cohort that's actually participating in the labor force, are women. So that's the second. And then the last piece is that women.... and this happened in December of 2019.... actually hold more jobs, the majority of all jobs in the U. S. Labor force. So they're 47% of the labor force participation.... so part of that.... but they actually hold the majority of jobs. So the composition of the labor force, so your talent pool as a CEO that you can pull from to fill jobs is actually changing. And that matters to CEOs and hiring managers
Coming from the tech industry myself. I'm curious. How does the Pipeline Equity solution impact issues around pattern matching and unconscious biases in decision making?
Katica Roy: 17:15
Sure. So Pipeline is actually a recommendation engine. So we are augmented decision making. So much like you would use Waze or Google to get from point A to point B, we do the very same thing for your human capital decisions. So we intercept human capital decisions across the five pillars of talent, which essentially are the five decisions that you make about your talent. So hiring, pay, performance, potential and promotion. It's their data, our algorithms. We intercept those decisions, provide recommendations and then track them over time. So, for instance, if you were making a pay decision. You saved a draft recommendation in your core HR platform. Pipeline actually intercepts that and we run it through our algorithms to ensure it's equitable. And if it isn't, we actually will make a recommendation for what that pay should be. I think the other thing that we've actually found going to the value that we place on female talent versus male talent is that one of the things that we've found that you can't close the gender pay gap by starting with pay That, in actual fact, pay, is the symptom, it's not the disease. In other words, it's the quantitative value that you place on your talent, but the actual value that you place on your talent happens before that, in performance and potential. And so we are the only integrated platform that actually ensures equitable decision making in an integrated matter and what we've found from a performance perspective, we use natural language processing, read through the performance reviews, call out bias phrases and then calibrate the actual ratings themselves.... is that on average, for similar performance, women receive lower ratings 4% of the time, and that's an example of how we essentially undervalue of female talent in the labor force.
So I don't agree with this perspective. But there is a fairly controversial gender psychologist, a Canadian gentleman by the name of Jordan Peterson, and his argument is that this isn't as much a conversation around gender as it is around some of the traits that are more innate females compared to males, things like being more agreeable. So when you hear an argument like that presented, how do you react?
Katica Roy: 19:48
Well, it does back to what we talked about, which is that for years, gender diversity solutions have been focused on fixing women, whether it's teaching them how to negotiate, getting them to apply for more jobs, ending the uptick in their speech and the truth is that women aren't broken. It's the system that's broken, the system, that's what we need to fix, and it's the system that does not value women equitably.
And comments like Jordan Peterson's really just infuriate me. Because, yes, there are feminine traits and masculine traits, but that's a good thing. And that's what pipeline equity is quantifying and what is impressive about it, really quantifying that while feminine trades have been undervalued for so long, when you embrace them, you actually get to better outcomes.
Katica Roy: 20:46
Well, yes, plus the fact that gender inequity has negatively impacted men, too. That's something right. So we often talk about gender equity not as a synonym for women's rights, women are 50% of the conversation, and men are the other 50% of the conversation. And not just because I talked about they have the majority of leadership roles, but also because it negatively impacts them, too, you know, from 48% of working dads wanting to stay home with their children, but also mental health, accessing mental health is largely a men's issue. Men in the US account for 79% of all suicide, in the US. And so therefore, four times more likely to die from suicide. Those are impacts that we don't talk about, but they're also impacts from gender inequity. It's what's often referred to as the man box and it is a very strong confines that we create for men, and most men desire a different role in this world, a new definition of masculinity or what it means to be a man, and we should be talking about that as well.
I agree with that. I think we need to just remove the idea of gender roles completely. I'm curious, though, in your discussions with your enterprise clients. What has been the most surprising finding or outcome that you've seen?
Katica Roy: 22:17
One is that through the approach that we take, so I talked about performance, potential and pay. What we've found is that those are the three key decisions that most companies make across their talent every year. So for every 10,000 employees and we obviously sell to enterprise companies, so those that have 10,000 employees or more, they make those three key decisions so they have 30,000 opportunities to move toward gender equity each and every year. And so there are three things that we have found. Some are not necessarily surprising, but I think is interesting. One is that when you break it down as a collective of all of those thousands, tens of thousands, sometimes hundreds of thousands of decisions, you can actually make pretty substantial progress in a short amount of time. So on average, for our customers, they improved their Pipeline Score for which is how we measure gender parity in the pipeline platform by 65% in their first 3 months of implementing the Pipeline platform. So that's one. The second is that there's often a false narrative in companies of us versus them that HR or leadership doesn't want to solve this issue, and we've actually found that not to be true. But we have found is that an actual effect HR and leadership does want to solve this issue, and they are committed. There is just really a difference between making a pledge or making a commitment to gender equity, and living it. And when you're talking about large enterprise companies that operate globally at scale, that can be very difficult. So that's one of the things that we've made possible. And then the third piece is that, and what we've found is that women's ERG groups in particular have more power than I think sometimes is attributed to that group, whether it's self attribution or outside attribution. And the reason why I say that is for some of our customers, we actually are implemented within their companies because of the advocacy, very strong women's ERG groups who are looking for systemic and measurable change. Most folks in organizations are not looking for perfection. They know it doesn't exist. What they are looking for is accountability and transparency. And so when women's ERG have advocated for change and demonstrably change, we found that to be a catalyzing event, essentially for companies to implement Pipeline.
And could you just clarify what an ERG group is?
Katica Roy: 25:17
It's an employee resource group. So, um, if you worked at IBM, it would be Women at IBM.
Yeah and Katica, that's a huge call to action, I know for me coming out of this conversation. To, next time I'm in a meeting of my ERG at the company I work for, starting this conversation around there are tangible solutions, like Pipeline Equity that can quantify the benefit of gender equity in the workplace, and I think it will go a long way just in proving to companies that we can't rest on our laurels anymore.
Katica Roy: 25:51
Yeah, and also I would add that we can no longer just admire the problem. So we know that it's an issue. But you know, it moves every year in terms of how many years we have to close the gender pay gap or close the economic gender gap. But we know that it's an issue, so now it's time to take action. And the beauty of where we are right now in terms of the Fourth Industrial Revolution and all of these advanced technological tools is that we can actually make gender equity possible in our lifetime.
Katica, rounding out our conversation today if you had to give our audience a hashtag, I also statement that they should internalize coming out of our discussion today. What would it be?
Katica Roy: 26:44
Well, bravery is a big part of my story, and my family's story. So I would probably say something like, I am also brave.
I also am brave. I love it. Thank you so much for participating. We really appreciate it.
Katica Roy: 27:01
Thank you. Stay safe.
You go into work every day and you look up and it's just a bunch of men in power. Given the amount of time you spend at work, I find it hard to see how that wouldn't impact your psyche.
Yeah, pattern matching at the top is definitely a really important attribute. Something you think more and more about as you start having these conversations, how much of that there actually is. One of the biggest takeaways for me, though, into something that I knew, but it just again reinforced the importance of it, is you don't build wealth from salary. You build wealth from equity, right? Like you need to hold equity. That is where you build wealth. I love that concept of the man box and just reminding ourselves that getting more equity into the hands of women having actual workplaces, actual leadership teams in true gender equity, it's as much about raising women as it is about expanding the types of things that are acceptable for men to do.
Something I never realized in all of this messaging around promoting women is this underlying narrative that women are broken and women need to be fixed. And I'm really surprised that was not a reaction or a key takeaway for either of you, because in listening to that. I feel like this is something that's been going on that I personally hadn't realized.
Yeah, I think we've just already kind of internalized that a lot. We read about it, We've heard it. We've seen it like it's I'm not surprised that you mentioned that, Um and it's not. It's not anything kind of new to my belief system.
Same for me. I think it's a very, very valid point, and it's just kind of become ccoreourt to my belief system. But I'm really glad, right?
That's so fucked up, that it's core to your belief system that everyone around you is just saying you need to be fixed. That would drive me insane.
Everyone, welcome to Harrison's feminist awakening. It happened here. No, it's great, actually, that to hear that was such a big take away for you because I think in our conversations with men and trying to hashtag her for she and that kind of part of the feminist movement, that's the type of awakening we need men to have. And the last thing I'll comment on, too is her I also statement I also am brave.... it's just a reminder, I think for me, that it takes bravery to seek gender equity, it takes bravery to invest, the big journey that we're all talking about that's a really important statement for us.
Yeah, and it ties back to some of the conversations we've had another interviews with other amazing guest speakers, where you have to get uncomfortable to get comfortable and to be uncomfortable, you have to be a little bit brave.
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