” No wonder women don’t negotiate as often as men. It’s like trying to cross a minefield backward in high heels.”
Sheryl Sandberg, “Lean In: Women, Work, and the Will To Lead”
The gender gap remains in the usual places for women–less pay, work fewer years in the workplace with time out for children and other dependents, lower savings for retirement–but women are gaining ground.
More women are graduating college and hold more graduate degrees than men. They are reaching higher corporate levels, and there are more women-owned or founded businesses. They are making progress, as women are primary breadwinners in 41% of US homes but still carry the additional caregiving and household duties.
Women Need To Be Assertive But Find It Hard To Negotiate
When it comes to women achieving success in their careers, moving from entry levels to ever-higher corporate levels, they need to understand how to negotiate compensation packages better. Women tend to be less assertive and more accommodative than men. That may leave significant money on the table, starting with their first job’s salary.
When women get a lower salary than men for the same job and experience, we should not dismiss that difference even for just one year. It becomes cumulative. She starts with a lower base. Even if she and her male counterpart get identical raises and promotions over the same years worked, the impact of compounding interest leaves a sizable gap in her comparable net worth.
Women Pay A Greater Social Cost
Studies have pointed to the “social cost of negotiating” which negatively impacts those who are self-advocating for a salary raise. It shows that the hit was significantly worse for women than men.
“Aggressive and hard-charging women violate unwritten rules about acceptable social conduct. Men are continually applauded for ambitious and powerful and successful, but women who display these same traits often pay a social penalty paid by women who display these traits. Female accomplishments come at a cost.” Sheryl Sandberg
Research shows women make better advocates when they represent others than for themselves. Women fear backlash when it is for themselves but are better when they negotiate for others.
10 Steps Women Should Take When Negotiating
1. When You Limit Yourself To The Offer
Before you go gangbusters, know that specific jobs may not be negotiable. Entry-level positions may be less negotiable, especially when you have little to no experience in the field.
Typically, teaching, union, hourly positions, government, and civil jobs have stated pay scales. Increasingly, companies are being more transparent with structured compensation schemes easier to understand.
2. Do Your Research First
Be aware of the typical salary ranges for jobs in your field and your geographic area. It may be difficult for you to negotiate when it’s your first job. However, you can inquire what the high and low salaries reflect.
Glassdoor, Payscale, and Salary.com are good places to start to find average salaries. Their sites may provide you information for your first job offer and be a source as your role expands at the firm. A search can provide you with relevant documentation when you seek a raise.
Speak to people who you know are working in jobs of interest to you. Ask them about the drivers of success and challenges and companies that may have opportunities. Another place to learn from is Linkedin, an excellent professional networking website source to use. Job boards are helpful when you begin the interviewing process, and reach out to human resources representatives in your field.
You should learn what the industry norms are for your field and how it relates to your education and experience.
Always be prepared to reflect on successes thus far, especially when asking for raises and promotions.
3. Build your Negotiation Skills
It is not unusual to be uncomfortable to ask for higher pay, bonuses, benefits, or promotions. Take a class to develop your negotiating skills, or find a good negotiation coach.
I strongly recommend articles and YouTubes by Stanford Graduate School of Business Professor Margaret Neale. Her videos focus on strengthening negotiation skills for women. She is a negotiation expert and author of “Getting (More of) What You Want.”
Negotiation Is A Lifelong Skill
Lifelong skills are core in many aspects of your career and life overall. Specifically, negotiation skills require the ability to communicate, take on a challenge, critical thinking, and problem-solving. Being able to negotiate for yourself is essential These skills will help build your confidence the right way, prepare thoroughly on the key issues, and listening to the other side’s perspective.
Don’t be afraid to practice by doing a video of yourself. Listen to your voice and tone. Watch your demeanor and body language. Ask someone to critique you. Stay positive, sit straight, and sound confident.
Practice for real by calling your cable company, asking for a reduced bill, negotiating your interest rate on your credit card, asking for a reduced price for a used or new car, for example. Be armed with information before you make the call. Imagine the power of reducing costs by practicing your negotiation!
4. Getting A Job
If you have completed the interview process for a job you desire, show your enthusiasm but not discuss salary. Wait for the offer, and the position is firmly in your pocket before you discuss compensation. Don’t be the first to provide a definitive dollar amount or a range you are seeking. You should find out the typical salary range by doing your research ahead of time (see below).
If offered a job but not yet the salary terms, ask for the range. Don’t accept on the spot. Be thoughtful, understand the package, and be ready to negotiate. Your goal is to exceed the high end of the range because you are their best candidate.
A 2019 Glassdoor survey found 40% of employees–39% of men and 42% of women–accepted their salary offer and did not negotiate in their current or most recent job. These statistics reflect better gender parity, a significant change from the March 2016 survey when 59% of employees–52% of men and 68% of women– accepted their salary without negotiation. Women have further to go and should be able to say “No.”
5. Take Time To Mull Offer And Show You Are Serious
If you are unsure of the offer, ask for a little time to contemplate it. Even if you are silently jumping for joy, ask the hiring manager for extra time to decide. They will appreciate your seriousness. If you do want to accept the offer, give it orally and follow up immediately in writing. Ask for a letter confirming your acceptance and agreed-upon salary, your title, incentives, and benefits
If there is a gap between the figure you had in mind and their offer, you may want to open the door to negotiate. You can say you are excited about the offer and the organization. Ask if there is any leeway in the compensation. You want to be genuinely motivated, especially if you are confident in your skills and experience.
If the salary gap is too large, it may be too hard to overcome unless other parts of the package, like bonuses or stock options, can bridge the salary difference. Benefits that accompany your package may be up for negotiation between you and the employer. Make sure that this is possible ahead of time by speaking to HR.
Some companies have extra money set aside with expectations that prospective employees may ask for better compensation packages, but a lower percentage of women negotiate than men.
Salary History Bans Are Growing
By the way, if asked about salary history, change the topic to the position. Discussion of your salary history may be illegal in your state. Massachusetts was among the first states to make it illegal to ask for that confidential information on an interview in 2016. As of 2021, 29 states now have salary history bans.
Related Post: Challenges Women Entrepreneurs Face And Overcome
6. Keep Track of Your Accomplishments
As you move up the corporate ladder, keep a personal journal of what you have done, not hours worked. You need to build your list of selling points with real achievements like successful presentations. Examples of these are landing a lucrative contract, strong customer sales or satisfaction, or training new employees. It will strengthen your conversations when you pitch for more money and benefits.
Women often undervalue their worth and, as a result, have lower expectations for themselves. Confidence-building is just as important as your hard work, diligence, and skills. It took time for me to strengthen my self-assurance to take stands when necessary and to be able to convince others.
7. Solicit Manager Support
It is always a good idea to have management in your corner who can provide you support and feedback. Your manager can provide you with advice on how to advance in your career or get desirable assignments. Take the initiative to talk to your managers about how things are going. Look for mentors.
Ask your supervisor for suggestions on professional development or online course opportunities. Showing your engagement as a long-term player is a positive reflection of your motivation.
Ask your boss for constructive criticism over coffee or lunch. Be professional, loyal, and supportive.
I was fortunate to have had good support from my research director, Charlie. He was often a good-sounding board, providing advice and valuable feedback in a complex environment, particularly for women. He treated people professionally and equally.
8. Getting A Raise
You always want to be paid what you are worth, whether you are changing jobs or moving up the ladder. If you remain in your organization, you have a record of accomplishments, your ability to work with or manage others, and a reputation. You can use internal and external sources to find out what people are making in the field.
When I was an equity analyst at a major global investment bank, I was happy with my package and not looking to leave. I ignored recruiter calls. That was a mistake. When I finally decided to talk to a recruiter, I found out that I had been underpaid (despite making big bucks!) relative to my male counterparts.
It is always good to listen to what you may be worth externally. Of course, there are “switching costs,” adjusting to different firms, management, and colleagues, having to maintain or rebuild your reputation for a new audience, other demands, and culture.
9. Know Your Worth
Often, talking to outsiders validate that you are in the right place. Nevertheless, use information like higher salaries or compensation packages to get what you want and need. Arrange to meet with your boss and speak honestly. Provide your accomplishments, share your continued enthusiasm to work with the firm, and specifically her/him and team.
Ask for the money you believe you deserve. If you cannot get to the exact dollar, consider your package and what upgrades you may want. As you move up in your firm to more senior positions, and there are specific times to discuss your annual package, it is not unusual to have an attorney with employment law expertise to assist you in negotiations.
10. Compensation, Incentives, And Benefits
Your salary is not the only part of the compensation package to consider. Other incentives, benefits, and perks can be a big part of your compensation package. Some companies have been quite progressive and innovative. Investigate what these companies offer. In 2021, as hopefully the pandemic fades as bad memory for all of us, working from home may be in greater demand and more acceptable to more employers.
Important features of a compensation package are:
Incentives such as bonuses and equity options are essential to your total compensation and may dwarf salaries. You want to know if there is a signing bonus, annual bonuses, and how you may earn equity options. Sometimes your title and position may dictate increased access to sweeteners to your compensation package.
Learn about the company benefits such as Insurance and amounts (flexible spending or health spending plans, health, medical, disability, life, dental, and vision), 401K retirement plans and its employer-matching program, vacation, sick, and comprehensive family paid leave, college/graduate school tuition reimbursement, and other benefits.
Increasingly, companies offer other benefits and perks specific to your family situation, or you can negotiate for them to be in your package:
Flextime or work from home;
professional development opportunities;
commuter offerings like access to a car on weekdays;
Gym pass or discounts;
Severance packages in the event of a merger & acquisition of your company or elimination of your job;
An extra vacation to match the 4-5 weeks you had at your previous employer; and
Work-life balance offerings like working from home, flexible hours, child care cost reimbursements, extended parental leave.
The Corner Office
Sometimes there are perks for certain levels of attaining specific corporate levels. Years after I became the first managing director or MD (male or female) in my department after our Research Director, I was abruptly told to pack my stuff and moved to a huge corner office by a moving company. Frankly, I thought I was being let go, and no one came to talk to me.
Closing the door, I put my head down to do some work. A knock on my door, my boss walked in, asking, “Don’t you like your new digs?” He then told me he was embarrassed to tell me that managing directors get corner offices. However, I never asked for it and he was going to promote one of the men to MD’s, and already that person asked for the other corner office.
So I was entitled to a large office with space for a couch, I just didn’t know to ask. Don’t make my mistake!
Related Post: A Guide For College Grads On Your Company Benefits Plan
As women progress in their careers, compensation packages may become more complex. Attorneys may do your bidding for you in negotiations. However, you need to understand what you deserve. Women are not getting what they are worth yet. Positive changes are happening for women in the workplace and elsewhere.
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With a passion for investing and personal finance, I began The Cents of Money to help and teach others. My experience as an equity analyst, professor, and mom provide me with unique insights about money and wealth creation and a desire to share with you.