Mind The Gap: Negotiation Tips for Women

A recent bill passed in NYC prohibits employers from asking prospective job applicants about their salary history. The law goes into effect in October and was enacted as an effort to fight gender wage inequality. The logic behind the legislation is that since women on average make less than men, asking them about their previous salary disadvantages them and anchors the negotiation in a way that perpetuates the problem.

“This Administration has taken bold steps to combat the forces of inequality that hold people back”, explained Mayor Bill de Blasio, “and this bill builds upon the progress we have made to close the pay gap and ensure everyone is treated with the respect they deserve.”

While such legislative efforts are laudable, much more needs to be done in order to empower women to negotiate effectively. Decades of research has shown that in comparison to men, women are less likely to initiate salary or promotion negotiations; less likely to counter-offer in negotiations; and more likely to make greater concessions in such circumstances.

There are good reasons for this reticence. What the data demonstrates is that when women negotiate assertively on their own behalf they are perceived — by both men and women — as violating gender and societal norms (i.e. women as unselfish care-taker).

For women, it really does hurt to ask, as self-promotion often comes at the cost of likability. Studies show that people (men and women) are less inclined to work with women who negotiate assertively than with men who do the same. Hence, in an effort to avoid social backlash — to dodge being perceived as “pushy”, “demanding”, or “nasty” — women tend to either shy away from negotiations or be less competitive.

Negotiation aversion is costly. According to one study conducted by Linda Bobcock and Sara Laschever which looked into job negotiation strategies of graduate students at Carnegie Mellon, only 7% of female students negotiated their compensation, compared to 57% of males. The outcome was that starting salaries for males was almost 8% higher (around $4000).

Over time, even if both employees get identical raises (and that is a big if given that reluctance to negotiate also impact career advancement) the gap between these salaries will widen significantly. Bobcock has estimated that over a lifetime of earnings, the cost of not negotiating is as high as $750,000 for middle-income jobs and $2 million for high-income jobs.

Indeed, reluctance to negotiate manifests itself even at the highest economic strata of society. In 2015, after the Sony email hack, Jennifer Lawrence, the world’s highest paid actress at the time, discovered that she was getting remunerated less than her male co-stars. Shocked by the pay discrepancy, Lawrence penned a soul-searching letter in which she disclosed her struggles as a negotiator.

“I failed as a negotiator because I gave up early. I would be lying if I didn’t say there was an element of wanting to be liked that influenced my decision to close the deal without a real fight. I didn’t want to seem ‘difficult’ or ‘spoiled.’ At the time, that seemed like a fine idea, until I saw the payroll.”

Determined to change her approach as a negotiator, Lawrence stated: “I’m over trying to find the “adorable” way to state my opinion and still be likable! Fuck that.”

So, in a Lawrencian spirit how can we change this discrepancy without waiting for the world to change? What can women do to better negotiate? And what practices can organizations adopt to mitigate this problem? Here are a number of steps - under the acronym F.A.C.T.S. - that both individuals and organizations can adopt:

Find market value: Before going into any important negotiation, do your homework . Find out how much other people (especially men) are making for the same position. “Do your research and know what someone with your skills and experiences within your given industry should get paid”, explains Dr. McKendree Hickory, a specialist in women’s leadership development at LifeLabs Learning. “It can even help to talk it through with a trusted friend or mentor if you’re worried it “feels” too high.”

Knowing market value is an essential way to safeguard yourself against unfair anchors. In addition, doing so also allows you come prepared with a bargaining range. Women can gather this information by talking to recruiters and also with other men (the danger of having only women as confidants is that the information is skewed). As organizational pay transparency becomes more common (see below) this will get easier.

Act as Agent: Research shows that when women are asked to negotiate on behalf of others (e.g. lawyer/clients, doctor/patient, professor/student, parent/family), they are both more comfortable being assertive and are less likely to be judged harshly. A meta-analysis of over 10,000 subjects has confirmed these findings.

“When I negotiate on my behalf,” explains Nikki Ferszt, Head of People Operations at BounceX, “I have a hard time quantifying my worth. However, when I negotiate on behalf of my team or my loved ones, I find myself more than able to be confident and persuasive. So I tried a small thought experiment: I acted as an agent of myself, as I would for my team, when negotiating for myself and found the results quite impressive.”

Acting as an agent, explains Harvard behavioral economist Iris Bohnet, all but erases the gender negotiation dilemma. “There is no gender role conflict in these situations,” she writes in ‘What Works: Gender Equality By Design’, “as women are expected to care about the people they represent and fight hard to advance their interests.”

Communal Concern: Research also shows that when women frame and contextualize their interests in “relational accounts” they are more likely to get what they want. “The key to a relational account (or “I-We”) strategy”, explains Hannah Riley Bowles, Senior Lecturer in Public Policy at the Harvard Kennedy School, “is to explain why your counterpart should perceive your negotiating as legitimate in terms that also communicate your concern for organizational relationships.”

For example, a negotiation relational account would be, “I’m hopeful you’ll see my skill at negotiating as something important I bring to the job.” Studies have found that doing so improves both social perception and negotiation outcomes for women (but not for men).

In her book Lean In, Facebook COO Sheryl Sandberg recounts how in her negotiation with Mark Zuckerberg she employed a relational account approach. After turning down Zuckerberg’s first offer, Sandberg added, “Of course you realize that you’re hiring me to run your deal teams, so you want me to be a good negotiator. This is the only time you and I will ever be on opposite sides of the table.”

Transparency: Organizations who seek to advance pay equity can enable this process by becoming more transparent about their income distribution. A step in the right direction came in 2014 when President Obama signed Executive Order 13665 prohibiting policies and practices which prevent or punish employees from discussing their salaries with anyone else.

Tech companies such as SumAll and Buffer have taken the next step and have made the salaries of all their employees accessible. For Buffer, these salaries (and the way in which they are calculated) are not only available internally (as in the case of SumAll), but also for the world to see.

“Creating visibility into what people make throughout the organization can dramatically decrease the pay gap”, explains Hickory, “by communicating transparently about salaries, organizations remove many of the structural barriers women face in pay equality which can also both attract and build trust with their employees.”

Of course such transitions are not always easy, especially for large-sized companies. Salary comparisons, could potentially produce conflicts, low-morale, and inflated egos. However, in the long run, pay transparency allows prospective employees to make informed decisions, encourages compensation policies to be more fair, and creates better conditions for organizational meritocracy.

Sites that publish salary information include Glassdoor and FairyGodBoss. The latter is a crowdsourcing site dedicated to give women better information about prospective companies by increasing transparency.

Suspend Negotiation: A more radical means of addressing the gender pay gap is getting rid of negotiation all together. Innovative companies such as Reddit, Jet, Magoosh, Elevations Credit Union, and LifeLabs Learning have all ditched salary negotiations in an effort to increase transparency and fair pay.

In 2015, Bhavin Parikh, CEO of Magoosh, an online test preparation company, wrote a blog post explaining his company’s policy on non-negotiations. For Parikh, salary negotiation sets the wrong tone. “You reinforce the belief that compensation is subjective, rather than merit-based. You reward an employee’s ability to negotiate rather than their actual contributions to the company.”

Likewise, in 2014, then CEO of Reddit, Ellen Pao, explained the organization’s change of policy in the following manner: “Men negotiate harder than women do and sometimes women get penalized when they do negotiate. So as part of our recruiting process we don’t negotiate with candidates. We come up with an offer that we think is fair.”

Of course none of these approaches are without their shortcomings. To ask women to negotiate more communally (whether on behalf of others or through relational accounts) is to reinforce the very gender norm that makes it so hard for women to negotiate in the first place. To ask companies to increase transparency or adopt a non-negotiation policy is to risk a multitude of unintended negative consequences.

Yet the alternative of waiting until the system is miraculously fixed is even less attractive. A pragmatic idealism informed by science - while no panacea - will help us mind the gender pay gap and cross over into a more equitable and caring workspace.