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Ladies, would you prefer not negotiating your salary?

Apr 30

An article recently written on NPR speaks to a ‘new’ trend in organizational compensation.  What’s that trend? Apparently, companies are now not negotiating new hire or promotional salaries.  Basically, here’s what we pay for this position, take it or leave it.

Do you believe this would work?

Here is more from the article:

When it comes to negotiating salaries, the research is pretty clear: women are less assertive than men. It’s one reason women who start their careers with a narrower pay gap see it widen over time.

Carnegie Mellon economics professor Linda Babcock, who studies the gender pay gap, says men are four times more likely to negotiate their pay. That keeps women at a disadvantage, though they’re not always aware of it.

“The standard now is that people don’t really know what each other earns, that some people negotiate and some people don’t, and so there’s tremendous inequities in salary,” Babcock says.

Here’s what I’ll say, Yes, we have inequities in salaries.  Having non-negotiable salaries can help these inequities, but this isn’t a solution. The reality is organizations need flexibility to negotiate salary, especially when it comes to attracting hard-to-find talent. Organizations that take a hard stance on this, will lose in the talent attraction game.

What organizations need to do is have a policy on making quicker market compensation moves when they begin hiring in individuals, male or female, at higher rates than someone who might have started a few months prior. Most organizations are very weak on this practice, which causes most of the inequity.

You hire someone last year at $50K, and this year you hired someone into the same position, doing the same job, with a very similar resume at $58K. You now need to go back to your employee making $50K and give them an increase to $58K.  This hurts, but it needs to be done. That’s why it is critical for your talent acquisition team to have great negotiation skills.

It’s not a $8K increase to your budget, it’s a $16K increase to your budget. Now, think about in terms of a company that has hundreds, or thousands of employees in the same situation.  That $8K dollar negotiation can turn into hundred’s of thousands of dollars across the organization in market increases.

This is why most companies turn a blind-eye to market increases, and why so many organizations have pay inequalities. If females are less likely to negotiate higher salaries, and your organizaitons is going to ignore the difference, you’re going to have a growing problem that only gets worse the longer you ignore it.

I recently had a situation with a Fortune 500 client you completely gets this, and refuses to let it becomes a problem. We had a female candidate interview and get an offer. She wanted $47K. She was way under market for the position, and for the company. They knew she only wanted $47K, and they came back and paid her $63K! That was the value of her position to the organization and what similar people in her role were going to make, with her experience.

Like I said, this isn’t a salary negotiation issue. This is a do-you-want-to-do-the-right-thing organizational issue.

What do you think?

8 Comment to “Ladies, would you prefer not negotiating your salary?”

  1. My question is: how many of these women are not going to feel comfortable negotiating their salary, but would consider searching for places that will pay higher? That might be the more difficult approach, but in a way, it’s also less immediately confrontational.

    It might also be a bit of a knowledge gap. Going into my first job after college, I knew negotiation was expected, and read up on the basics of how to handle it. But that knowledge isn’t exactly sitting around — you have to look for it. Not exactly something that ends up on any college or high school curriculum.

    May 1, 2015
  2. My favorite post of the week, Tim. I love to negotiate salaries as a recruiter, and I typically lead the conversation. There are strong statistics out there that the negotiator who leads the conversation or writes down the number first will have an outcome closer to their goals. Now, as a technical recruiter, I would like to see more talent in developers, cyber security, and software architects. Why are these fields male dominant? Why are women in tech almost always either testers, Tech writers, or analysts?

    Jonathan Jurewicz
    Apr 30, 2015
  3. I have very mixed feelings out this. As someone in the HR world, I see women shy away from negotiation and I want to see the pay inequities go away. But as a woman, what I really want is for women to be more confident in their skills, value and worth. If you keep a handle on the market and what your peers are making, you know if a company is underpaying you. So go in with that knowledge and be prepared to walk (aka start looking for a new job) if they aren’t willing to get you there.

    Also, when I first read this I had this gut reaction like they are lowering the bar for women and I that drives me crazy. Like when I used to play basketball with the boys; don’t take it easy on me. If I make a basket, I want it to be legit.

    Emily
    Apr 30, 2015
  4. I cannot think of a situation in my decades of practice in which I did not have a floor, mid-point, target amount and ceiling for a role. How does one ‘negotiate” without these markers? I usually drove to best financial offer quickly and stood my ground; lost few and won most all. I know for a fact I lost out on top talent a few times because we could not meet that mark or bear the costs of the warp on internal equity. This is not rocket science and has more common sense than analysis to recommend it.

    Apr 30, 2015
  5. A lot of good points. Companies should pay their people what they feel the position is worth. Although women are less likely to negotiate, companies should play a key role in making sure that gap disappears.

    Michael Townsend
    Apr 30, 2015

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