Over the course of their careers, women stand to lose as much as half a million dollars just by failing to negotiate their first job's starting salary. Here's how to make up lost ground.
When Sue Thirlwall, CEO of Miniluxe (think the Starbucks of nail salons) was a newly minted Harvard MBA, she discovered some life-altering information. “I learned that male MBAs were getting paid $5,000 more than I was.”
Though she’d negotiated her best to be at parity with the guys, the firm that made her an offer wouldn’t budge. "They were adamant,” she recalls, “despite the fact that [being slightly older] I had significantly more management and leadership experience.”
Thirlwall took the job anyway and received a very early promotion. She still wishes she’d held out for more. “I believe they may have come back with the same salary [as the men’s] had I turned it down.” As a result, Thirlwall believes she was behind in compensation because she accepted the lower starting salary.
She’s not alone. In a study cited by Linda Babcock and Sara Laschever, authors of Women Don’t Ask, if a woman doesn’t push to ask for more money in her first job, she stands to lose more than $500,000 by the time she reaches age 60.
Ironically, says Thirlwall, negotiating that first salary should be easiest. “The stakes are lowest before you go into a company,” she argues, “It’s just like dating before you actually get to know someone.” A recent study from the National Bureau of Economic Research indicates that women aren’t really less likely to negotiate. What they are is reluctant to do so in certain circumstances, like a face-to-face meeting, the study found.
A report by the Atlantic noted that the study didn’t follow job seekers as they advanced through their careers--or show how men and women negotiated differently as a result of age and experience. So Fast Company turned to career coaches, human resources directors, and employment consultants to weigh in on what might happen next. Here’s what they told us.
It's Nothing Personal
Part of the reason men have an easier (read: less emotional) time talking about compensation is that they tend to have more superficial relationships with their bosses, according to Kathy Sweeney. As a certified employment interview consultant, Sweeney’s observed that men are more likely to talk about the weather, sports, and other “non-personal” topics, as well as business successes. This, Sweeney says, allows men to separate work from their personal lives, and negotiate from an all-business position.
In contrast, she says, many women tend to form “deeper” relationships with bosses and talk more about their lives outside of work rather than their achievements. “Women are also usually very observant in the workplace, know what they and others have accomplished, and expect their bosses to be the same way,” Sweeney explains.
That notion is reinforced the longer a woman stays with a company, says Cheryl Palmer. “Women are more inclined to think that a boss they know well and with whom they have a good relationship will look out for their best interests,” she notes. “When this is their mindset, they are not going to push hard for a raise, even if they clearly deserve one.”
How To Play To Win
To increase the chance that negotiating will work in their favor, Sweeney advises women to look at their job description, identify areas where they excel such as making the company money, decreasing costs, or improving productivity, and detail those achievements in writing. Also, include work that isn’t part of their formal job description. She also suggests women do their homework at Department of Labor, Glassdoor.com, or Salary.com to research what others in their industry are earning.
Finally, women should use their keen observational abilities to know when to ask for a raise. Sweeney says the best times are when the company is doing well and in the beginning or middle of the fiscal year, to avoid bumping into the budget cycle.