The gender pay gap is real. To be sure, several lawmakers, private companies, the media and employees have called recently attention to the issue. States such as Oregon passed laws that make it illegal to ask job candidates about their salary history. Celebrities from Alicia Keys to Frances McDormand to Ellen Pompeo (and many more) have called out disparities they’ve experienced and the prevalence of women earning less in general.
Still, women earn 77.9 cents for every dollar that men make, according to a 2018 study from PayScale. It’s a nuanced issue that demands action from everyone, especially employers. But one way to make sure that the statistics don’t define your work life is to negotiate your salary.
It may sound basic, but long-standing research has shown that women are less likely than men to ask for more money. (Worth noting: One study from Harvard, released last year, reveals progress, showing that at least in Australia women are negotiating salaries at equal rates to men).
The mere act of asking seems to pay off. Workers who negotiate their salaries receive on average a 7% increase in pay, which multiplied over your years of work can translate to hundreds of thousands of dollars.
So how do you successfully ask for more money, especially if you’re earlier in your career?
Experts say that while the first step is to broach the conversation, ensuring that you’re prepared with accurate information and positioning your argument in the right way also makes a difference.
COMMIT TO THE ASK
If the prospect of negotiating a salary offer gives you pause, you’re not alone. There’s the fear of losing the opportunity or coming across in a negative way—something that actually can happen when women negotiate (more on that momentarily). But what about the risk of not negotiating? Research from Glassdoor shows that U.S. employees could be earning $7,500 per year more on average if they were paid closer to the market value of their position.
That may not seem like a life-changing amount, but it becomes significant when you look at it over the course of a career. If you stay with the same company, most of your bonuses and raises will be based on your starting salary. That compounding effect makes what you’re earning early on an important predictor of what you’ll earn later.
For instance, Stanford MBA Professor Margaret A. Neale tells her students to envision that two of them are hired at the same company at the same time, with one earning $7,000 a year more than the other. If they’re both treated and promoted equally until they retire, then it will take the lesser earning individual eight more years of work to catch up to the wealth accumulated by the higher-earning counterpart.
So plan to negotiate if possible. There are some scenarios when negotiating isn’t an option. For instance, if a company says this is their best offer or if you don’t have a good justification for countering–the offer is right in range with your experience and position, and it would be hard to argue for more. Also, consider the right time to negotiate: It’s when you have an offer. At that point, the employer wants you to work for their organization and the power dynamic has shifted in your favor. It’s certainly appropriate to ask the salary range during the interview process, but don’t provide a true counteroffer until you have something to counter.
PREPARE, PREPARE, PREPARE
Not preparing for your negotiation may be as detrimental as not asking at all. Before you begin negotiations, you need to know what you want to ask for and why. Research what’s an appropriate range for someone with your skill set, level of experience and field. Also, take into account factors such as where you live and the demand for people of a similar profile as yourself. There are a host of online resources that can help with this including Glassdoor, PayScale, and Comparably.
Several negotiation experts note that it’s important to have a specific baseline number in mind; something that if you’re offered below you’d likely walk away. Establishing early in the interview process whether the potential compensation will be near your baseline will save both sides trouble if you do get an offer. Additionally, while discussing salaries among coworkers can feel taboo, find a way to tactfully ask others in your current organization what they’re making can help you establish a solid sense of what you should ask for in your next position.
Then take the time to rehearse what you’re asking for and how you’ll make your case. Bring in a friend or partner, who can provide some hypothetical push back, and give you the chance to practice thoughtful responses, not get sidetracked by questions, and offer up solid explanations why you deserve the salary you’ve proposed.
POSITION YOUR ASK
How you ask is an important factor in the success of your negotiation. Research from Harvard shows that both collaborative and competitive styles yield positive results. However, it’s important to note: While those who employed a more aggressive, competitive style in the negotiations fared better overall, they were less satisfied with the outcome than those who were collaborative.
In an interview with The Muse, Stanford’s Professor Neale notes women often suffer reputation repercussions when asking for more money — more so than men. To combat this, she recommends a more “we” focused approach that ties the discussion to a joint concern and prioritizes how you can help the organization achieve its goals. For example, if the organization’s objective is to reach a new market of customers, show how you are uniquely qualified to help the company do that.
Also, consider the whole compensation package, and approach the discussion with a holistic mindset, instead of parsing each individual detail. Some self-reflection beforehand can help you assess what’s important to you; perhaps a flexible work schedule is critical, and a slightly lower annual salary makes up for it. Maybe a higher commission on deals or a robust benefits package offsets less vacation time or a smaller base.
Finally, know when to say “when.” Pursue the negotiation and be clear about what you want. Ask questions so you understand the offer and make your counteroffer. Then wrap it up. Prolonging the negotiation past more than a few back and forth conversations can set you up for an adversarial relationship once you start work or increase the chances of both parties souring on the offer.
The existence of the gender pay gap is frustrating, to say the least. But by committing to asking for more money and preparing for negotiations, you can improve your own financial position and better ensure you’re being paid what you deserve.
Santander Bank does not provide financial, tax or legal advice and the information contained in this article does not constitute tax, legal or financial advice. Santander Bank does not make any claims, promises or guarantees about the accuracy, completeness, or adequacy of the information contained in this article. Readers should consult their own attorneys or other tax advisors regarding any financial strategies mentioned in this article. These materials are for informational purposes only and do not necessarily reflect the views or endorsement of Santander Bank.