The high cost of not negotiating
In their most recent comprehensive study that surveyed more than 2 million people over the last two years, PayScale (the leader in compensation data analysis and friend of The Swing Shift) found that in 2018, women earn 77.9 cents for every dollar earned by men, which represents only a slight improvement from 2016 when the ratio was 76.3 cents for every dollar.
The reasons behind this stubborn gender pay gap have received much attention lately and are indeed multifaceted, including a higher representation of women who pause their careers to become caregivers and an underrepresentation of women in executive roles.
However, its existence and persistence are all too real.
The cumulative effect of not asking
Men are four times more likely than women to ask for a raise, according to economist Linda Babcock of Carnegie Mellon University in an interview on NPR. The reasons why are as complicated and deep-seated as the individual women themselves. While certainly not all women are negotiation-averse, there are some overarching trends (backed up by loads of data) that many women can relate to.
Some women, particularly those who are returning to work after a break or are in low- or mid-level positions, tend to undervalue their worth and their contribution, thinking they need to put in more time or more effort before they can ask for a raise. For others, it’s the real and perceived fear of blowback from managers. If I ask for what I want, will I be punished or pigeon-holed as too “demanding,” “bossy” or “difficult to work with?” Will it negatively affect my career down the road?
However, when a woman does not regularly and systematically ask for raises, the damage to her lifelong earnings is exponential.
Every missed opportunity for an increase in pay harms not only her current and future salary, but also her overall wealth, especially when you factor in additional untapped benefits, such as higher 401(k) contributions, better healthcare coverage or potential profit-sharing, not to mention accumulated assets or property.
Negotiating the divide
According to a study reported in The Wall Street Journal this week, a woman working full-time at median wage will earn $411,000 less over the course of her lifetime than a man with the equivalent level of intelligence, drive and education in the same role. If that woman has three career interruptions to care for young children, aging parents and a sick spouse, that lifetime earnings differential shoots up to $1,055,000.
Sheryl Sandberg, Facebook COO and author of Lean In, offered this advice on closing the gender pay gap to a forum on women’s economic opportunity at Stanford University last year: "I want to be clear, I'm about to give advice that I don't want to give, because I don't want these biases to exist. But the best way to get rid of these biases is to get women to negotiate well."
The good news is that there are some very concrete steps that individual women can take to not only boost their own chances of better pay, but also help bridge the fair-pay divide for all women.
Effective negotiation is not an elusive quality that some people are just blessed with. It can be learned and requires knowing your audience, arming yourself with relevant data and, yes, lots of practice. Find out more by joining The Swing Shift and the experts at PayScale and Apptio for our upcoming Ready. Set. Negotiate. workshop on June 5.