How women can close the pay negotiation gap.
Recent discussions on the gender pay gap have surfaced another gender disparity – the negotiation gap. On International Women’s Day we look at how female MBAs can hone their bargaining skills and negotiate their way to pay that reflects their true worth.
As UK companies gear up to report on their gender pay divide, the Fawcett Society, the UK’s leading gender equality charity, reports that for every £1 a man earns, women earn on average 86p – working out at two months worked for free every year.
But more than that, studies show that most women simply don’t negotiate their salary. One study at Carnegie Mellon University* found that 57 per cent of male MBA students had negotiated their starting salary, but only seven percent of females had negotiated for a better offer. Those students who negotiated increased their starting salary by 7.4 per cent.
So how do you negotiate your way to fairer pay? Cambridge MBA careers consultant, Tony Dutton believes it all starts with learning how to value yourself:
“Negotiations should centre around how you present your value rather than your financial worth. Start by thinking over your skills, your career journey so far and what you can bring to the organisation – your value to this particular company and industry. Reflecting on your own unique worth and the road you’ve taken so far will get you into the right mindset for negotiating.”
Focus on how you negotiate, not what you negotiate. And remember it is all about a conversation, not a confrontation. Look at it in the round – there are several perspectives at play, says Tony:
“The HR manager will come at it from a transactional perspective around pay ranges and sticking to budgets. The hiring manager will want someone to fill a role as quickly as possible and be in a happy, positive frame of mind when they start. You, the candidate, will not want to be put off the company by how they treated you during the negotiations, which can be a good indication of the culture you are going into. The negotiations can help you understand if it’s the right culture for you and if you can start the job feeling happy and committed to the role.”
Tony advises sticking to a two-part strategy: due diligence and discussion. When discussing consider the following:
- Negotiate face to face If possible, negotiate in person with the hiring manager – try not to do it from a distance. It is about a conversation rather than a transaction. You are building your value to the company and that is always more powerful face to face. You can reinforce skills you spoke about at interview and bring up other skills or experiences you may not have had a chance to talk about yet.
- Hold your tone
Maintain a tone of gratitude and respect while being confident and persuasive. Keep your confidence levels up by reminding yourself constantly of your skills and what you can bring to the organisation. Continually signal your enthusiasm and commitment.
- Stay professional and positive
At all times throughout the negotiation show a positive, polite and professional manner, no matter how disappointed and frustrated you may be feeling.
Due diligence involves doing your homework about the company thoroughly before you begin. Tony’s guiding rules are:
- Be realistic
Use your network and salary surveys on sites like Glassdoor to understand what a company pays for particular roles so you don’t look out of touch by suggesting something completely unrealistic. Understand the industry – there’s no point asking for a corporate banking salary from a not-for-profit, charity or start-up. Cambridge MBAs can also ask for advice about this from the Careers team.
- Be savvy about how you handle the figures
You are not obliged to tell them your current or previous salaries but to do so can show good faith. You can say your target is X or that you are considering a range between X and Y or that you are only considering offers over X. And make sure the offers are put in writing as they go back and forth.
- Consider the whole package
For some specific MBA Leadership Programmes, salary may not be negotiable, but always think about the whole compensation package – bonus, commission, pension, shares, maternity leave, holidays. It’s all up for negotiation and some aspects may be so attractive that you may want to compromise over the salary. But don’t go to the well too many times– negotiate it all as a package as there is nothing more frustrating for the hiring manager than to have to negotiate each element separately.
- Think ahead
Think not just about this role but the next one and the one after that. Do you really want to get in and build a career with this organisation? Does the role you are negotiating for fit perfectly with your aspirations? What bigger opportunities could come down the line if you join now? That may mean settling for a bit less than you were hoping for but, it if opens a door that will take you where you want to go, it may be worth compromising on salary for now.
Finally, says Tony:
“Negotiations are all about establishing trust – do you and the organisation want to work with each other? Are you the right fit for each other? Negotiations give you the chance to show what you’re made off and set the tone for those first crucial months in the job, so it’s worth putting your best efforts into getting them right.”
*Laurie R. Weingart, PhD, Carnague Mellon University