By Tanya Rapley
Good Call —
When it comes to compensation, salary negotiation is the one area women often neglect. Though if you have ever effectively negotiated a salary in your favor, you know how exhilarating it feels to receive what you are worth. If you have ever found out that a colleague is receiving a higher salary than you, as a result of negotiating, then you know how terrible it feels to know that you possibly undermined receiving a higher salary.
Salary negotiation is difficult for women because it is often seen as an uncomfortable conversation. For many women, the process of negotiating is as unenjoyable as “going to dentist”, whereas men tend to describe it as “winning a ballgame” or a “wrestling match”.
But the truth is by failing to negotiate, you are often leaving money on the table in the short and long term. A study conducted by Linda Babcock and Sara Laschever, authors of Women Don’t Ask, found that individuals who fail to negotiate their first salary stand to lose more than $500,000 in earnings by age 60.
Men are four times more likely to negotiate their job offer than women. When women do negotiate, they often have lower expectations about how much they will receive, and on average, end up receiving about 30% less than men who negotiate, the study reveals.
As a whole, women in the US currently make about $0.79 for each $1 that a man earns. For mothers, the pay gap is even higher, and it takes them about a year and a half to earn what a father earns in just one year, according to a study by the American Association of University Women (AAUW). When wage gaps across race and gender are considered, African American and Hispanic women make just 63% and 54%, respectively, compared to white males’ earnings.
The pay gap does not close with higher levels of education either. Though, it does narrow for women in some STEM and business fields for example.
In a study by Carnegie Mellon University, male MBA graduates who negotiated their job offers were able to secure 7.4 percent more, or $4,000 on average. One major difference? The men were eight times more likely to negotiate their salaries than the women. Interestingly, compared to their female counterparts, the starting salary for men was also about $4,000 more. Negotiating the first job offer can significantly contribute to closing the pay gap in some fields.
Here are five tips women can use to confidently negotiate their next salary:
Prepare for salary negotiation
This is a step that begins before the negotiations. Make it a habit to go above and beyond in all opportunities afforded to you. When it makes sense, take ownership of projects and own their successes. Set goals for your desired outcome and keep a personal journal where you can list your accomplishments, including any recognition or goals that you achieve and describe how you exceed them.
For example, if you spearhead a fundraiser for your company and you meet or exceed fundraising goals, make note of this. If you are managing a project that successfully concluded ahead of deadline or under budget, make note of it.
Your exemplary performance in previous positions will allow you to justify your salary requests in the future. Collect data to demonstrate your ability to deliver proven results. In fair situations, your performance is what will justify your salary increase request and helps when requesting recommendations from previous colleagues and supervisors. Chronicling your success also helps you boost your confidence during the entire negotiation process.
Salary research tips
Sites like Glassdoor, PayScale, and several others collect salary information from a variety of employers and make them available to consumers free of charge. Perform an online search of the average salaries for the position you are negotiating and ask for insight from colleagues.
During your research, pay attention to local and regional salaries. This is important because salaries offered by employers should be in line with the local cost of living. It is highly unlikely that a project manager in Sante Fe, New Mexico, will earn the same amount as a project manager in New York City.
A clear understanding of the average salary range for your position in your region provides you with an idea of how much room you have to negotiate.
How to negotiate salary
This is the most important of all of the steps because regardless of your preparedness, none of it can be implemented if you do not begin the conversation to request what you desire.
To begin with, if the job post asks you to submit your salary requirements, ask for $10,000 more than what you would typically ask for. This gives you more bargaining room and you are more likely to walk away with more than you would have originally asked for.
Later, a company will typically send you an offer letter or e-mail outlining details about the position including your starting salary. Once you receive this letter, you have the opportunity to negotiate your hiring conditions and terms.
While it may seem simple, people often get cold feet when the time comes to negotiate. If you become filled with self-doubt or are having second thoughts, take a moment to reflect on all of the accomplishments you have achieved over the course of your career. Remind yourself that you are deserving of your request, based on your past performance and future potential.
Benefits of negotiation
Your salary isn’t the only thing you will want to negotiate. Most people do not realize that elements of your benefit packages such as vacation time and sign-up bonuses are negotiable. If you are deciding between job offers with comparable salaries or are considering taking a position that has a lower salary, the benefits package should be strongly considered. These are important elements that factor into your quality of life just as much as your salary.
Benefit questions you should ask include but aren’t limited to:
- When are you eligible for benefits?
- Does this company offer a 401k?
- Do they match 401k contributions?
- What health insurance company are their benefits offered through?
- How many vacation, sick and personal days does the company offer?
- Is telecommuting permitted?
- Does the company offer bonuses?
Many employers are now offering additional types of benefits like student loan repayment assistance, opportunities to work from home and signing bonuses for in-demand fields. Don’t hesitate to ask about other types of benefits and negotiating for benefits that are appealing to your particular circumstances. These could make the difference between a job offer that’s competitive and one that’s not.
Turning down a job offer
Ideally, a company would be willing to negotiate resulting in favorable terms for you. But every opportunity isn’t the right opportunity. There are several reasons why a negotiation may not be successful. If a company is not willing to offer you the compensation you deserve and you are in a position that allows you to hold off until a better offer comes along, exercise your right to say no and walk away. A negotiation that does not go in you favor does not define you professionally.
Every salary negotiation will be different. The most important thing to remember is you don’t receive what you don’t ask for. No matter how difficult the conversation may seem, make it a goal to negotiate each position you are offered. Each experience will increase your comfort level. Eventually, your salary negotiation skills will be incorporated into your routine job hunt.
Tonya Rapley is a Certified Financial Educator and personal finance writer who has been featured in Black Enterprise Magazine, Barclay’s Card, Credit.com and more. She is also founder of My Fab Finance blog.