Women in Business: Salary Negotiations

When it comes to gender equality in the workplace, the pay gap remains a hot topic.

According to a PayScale study, women make 81 cents for every dollar earned by men for uncontrolled groups, and make 98 cents for every dollar earned by men for controlled groups. What this means is that when you control for location, age, education level, occupation and other factors, women still make 2 cents less per men. One may argue that 2 cents isn’t much. However, by calculating presumptive raises given over a 40-year career, a woman will still lose an average of $80,000 over that time span. For the uncontrolled pay gap rate, a woman will lose an aggregate $900,000 over her 40-year career. Additionally, some data shows that a large reason for this is because women are not asking for and receiving pay raises as often as men. What will follow is a quick examination of the data and trends over the last 20 years on how women approach negotiating salaries, and the rate of responses they receive from their male authorities. We’ll next dive into some resources that you can use to help you better negotiate a pay raise at your company.

According to Carnegie Mellon University economics professor, Linda Babcock, co-author of Women Don’t Ask, men are four times more likely to ask for a raise. However, when women do ask for a raise, they tend to receive 30% less than their male counterparts. In a study of 78 master degree students, she found that only 12.5% of women negotiated for their salary, in comparison to 52% of men. The studies discussed by Linda Babcock which were conducted in the early 2000s, has given society reason to believe that this trend is explained by women’s reluctance to negotiate in fear of harming workplace relationships or being too “timid”. However, new research done in the last 5 years has broken that narrative, and shown that women actually ask for a raise at the same rate, but receive it less often. The reason we see this discrepancy is because the early 2000s studies didn’t control for occupation. Women are more likely to work in jobs where salary negotiation isn’t possible or feasible, like low-skill hourly wage jobs or part time work. What this means is that any noticeable pay gap (for salary negotiations) is less attributable to women’s behavior, personality, or self-perception, and more to factors they can’t control.

However, the latest data suggests this could be changing again. Amanda Goodall, researcher and senior lecturer at Cass Business School says that there is emerging data to show that men and women under the age of 40 years ask and receive at the same rate! Reasons could include a generational shift in thinking and more awareness brought to the topic. In the end, it’s important for us (both men and women) to keep in mind these factors when navigating the business world. It’s true too, that many women will still have trouble negotiating their salary. Thus, here are three resources the next time you have to enter your boss’s office to ask the dreaded question.

Resource #1: Ladies Get Paid

Ladies Get Paid is an organization that has created a whole community of professional women. Not only do they offer a ton of educational resources on how women can tactfully negotiate their salaries, but they also offer yearly conferences, 1-on-1 career coaching, and an exclusive online Slack community—where you can meet and network with women who are just as excited to connect with you as you are with them. The Slack community is organized by topic, industry and location. I have personally joined this organization, and it has seriously blown my mind.

Resource #2: American Association of University Women (AAUW)

This nonprofit is a great resource for learning salary negotiation tips and much more! AAUW offers free courses on salary negotiation and other topics, access to the “Equity Network” of members of the organization, and award fellowships and grants to scholars enabling them to pursue academic work and lead community projects to empower women.

Resource #3: Secrets of Six-Figure Women by Barbara Stanny

Secrets of Six Figure Women is a book that goes over surprising and effective strategies for negotiating your salary as a woman. You can read it for free through Amazon Kindle if you have prime. In her book, she interviews over 150 women with salaries ranging from $100,000 to $7 million, to gain insight on these six-figure women.

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