Negotiating Your Salary

(Excerpts from Play Smart)

The Statistics

Does it surprise you that men discuss their salaries with managers four times more often than women and that 57% of women claim never to have negotiated their salary?

Even more astounding, when applying to the same job, women ask for a lower salary than men 65% of the time and often accept the first offer they receive (as opposed to men who continue to negotiate upward). Additionally, six times out of ten, women are paid less than men for the exact same job at the same company. On average, this salary difference is 3% less.

According to reports, women typically earn less than men, currently 84 cents on the dollar, and would need to work 42 days longer every year to earn the same amount of money. The New Yorker put it this way: “Today, for every dollar American men earn, American women earn eighty cents. This means that American women effectively work from January 1 until March 15 without getting paid.” Over a 40-year career, women stand to lose $400,000 because of that wage gap. This wage gap looks even greater when you break it down by race and ethnicity. “While women of Asian descent earn eighty-seven cents on the white-male dollar, black women are typically paid sixty-three cents and Latina women fifty-four cents.”

Latina, Black, and Native American women will average making $1 million less than white men over their careers, despite doing similar work. At current rates, America will not close the wage gap until at least 2059. This translates to smaller social security checks and much less retirement savings for these minority women.

To combat this unfair discrepancy, help your company or target employer bridge the wage gap and prepare yourself before you negotiate your salary.

Do Your Research

First, do your research and determine the pay range in your area for similar jobs. Check online resources such as Glassdoor, LinkedIn, PayScale, and BLS (Bureau of Labor Statistics). Many companies burden you with setting salary expectations without offering any transparency on their salary ranges for your job position. This unfair practice may cause you to accept a salary only to realize later that you are underpaid in comparison to your peers. Unfortunately, it could take years for you to catch up financially, depending on the company’s annual percentage raise practices. Luckily, there is a growing trend to combat pay discrimination in the workplace by implementing pay transparency laws designed to remove the historical secrecy around pay information. These new laws require employers to disclose, either in job postings or upon request, salary ranges, health care benefits, other insurance options, retirement benefits, leave policies, as well as bonuses, commissions, stock options, and profit-sharing. However, only a few states have enacted such laws to date, including California, Colorado, Connecticut, Maryland, Nevada, New York, Rhode Island, and Washington. Pay transparency laws are forcing companies to study national databases to determine actual industry standards prior to posting new job salaries. While transparency may lead to potential poaching by other companies and salary renegotiations by current employees, it can ultimately result in equal pay and competitiveness in the job market. Greater transparency can also improve communication with management and reduce employees’ concerns about being underpaid, leading to a focus on job performance and opportunities for career advancement. This benefits everyone involved. By contrast, a lack of pay transparency risks losing talented employees. For more on the topic of transparency, check our new book Play Smart.

If your state’s practices fall behind in terms of other state’s legal transparency requirements, arm yourself with data on salary and resource info that explains why you deserve your requested salary.

Avoid Stating Your Current Salary

If asked, avoid stating your current salary. If pressed, note that your current salary needs to be updated to meet current market expectations. In California, Delaware, Massachusetts, and the cities of New York and Philadelphia, it is now illegal to ask a job candidate about his or her salary history—a practice considered discriminatory to women.

Fairygodboss expertly described in a recent article: “As a candidate, it’s better to be asked about your salary preferences than cornered into revealing your current salary. But it’s ... tricky...it’s easy to lowball yourself and regret your answer. The last thing you want is to walk away from a negotiation feeling like there was money left on the table. You shoot yourself in the foot by answering a number that was way below your employer’s initial range.” Being prepared and arming yourself with market information for similar job positions in your area is critical in ensuring you gain a desirable salary.

Create a Satisfactory Range

For example, when negotiating your salary for a new job, create a range that starts with the minimum amount you require (higher than your current salary) and justify your range by factors such as education, experience, unique qualities, skills, and the value you bring to the company compared to other candidates. To support your request, find comparable data in the market, equipping yourself for further negotiation after an initial offer is made. Remember, you have nothing to lose by negotiating. Moreover, your preparedness and efforts increase your potential to earn more in the long run. If you can justify your request with true and competitive data, your potential employer should be fine with your negotiation efforts for a pay raise. One study found that 85% of Americans who countered an offered salary were more successful in achieving close to their salary goal. Don’t give up and take the first offer, especially if you qualify for a higher wage.

Set Expectations Early

It’s important to set your salary expectations early in the negotiation process to avoid any future frustration. This helps establish a benchmark for how you wish others to perceive you and your contributions. Your superiors need help to read your mind and innately understand what salary you deserve. So, it would be best if you made your desires clear—upfront.

Allowing your employer to guess what you may be seeking will not likely satisfy your expectations for a raise, leading to continued frustration. By establishing your expectations early and backing them up with facts, you put yourself in a strong position to negotiate and improve your chances of achieving your deserved salary.

Don’t Settle for Low

As you negotiate, don’t settle for a lower salary just because you believe you lack the criteria for the job position. Instead, educate your potential employer on your job experience especially that which extends beyond the position’s parameters, to emphasize why you add value to the job position. Sell your skills, experience, unique work style, and attitude!

If instead of a higher salary at the number you desire, your employer offers you stock or equity in the company and/or other financial benefits, including quarterly or year-end bonuses, determine if the combined offer with these benefits bridges the gap in pay. Stock or equity in your company could be a valuable benefit in the long term.

Finally, put your pitch in writing and practice with a friend or family member who could provide valuable input on how to negotiate best.

For more on this topic and other helpful guidance, please check out our new book Play Smart. Good luck!

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