Financial Wellness: Pay Gaps & Salary Negotiation

Originally posted on StrategyGirl NYC

What we earn is an incredibly important factor in our financial well-being. When we don’t negotiate, we leave thousands, hundreds of thousands, and even millions of dollars on the table over the course of our careers.

When we are financially well (imagine a nice savings buffer in our bank accounts), we can leave relationships and jobs where we’re being mistreated (or just because we want to!). We can take more risks in our careers without worrying about the financial implications, and we can negotiate harder to be paid fairly at work.

While financial well-being is important for everyone, the facts show that women are at a disadvantage. In 2017, women earned 82% of what men earned. Black women, Native American women, and Latinas are much worse off, earning just $0.63, $0.57, and $0.54 (respectively) to the white man’s dollar. That means Latinas would have to work an extra ten months to earn what their male counterparts did in 2017.

Although these statistics are discouraging, we can prepare ourselves to advocate for the pay we deserve.

Compensation conversations can be really hard to initiate – (and women are four times less likely to negotiate their salaries than men!) We might try to avoid them or put them off for later. We convince ourselves that our companies don’t give real raises, or we worry that we’ll get turned down because we’re not worth it. Here’s what you can do to prepare for and execute a negotiation confidently.

  1. Master the art of negotiating confidently. When we hear the word “negotiation,” we often think of compensation, but we actually negotiate in our everyday lives. Practice when the stakes are low to hone your skills and get more comfortable. Ask your roommate to do the dishes or ask your dry cleaner for a discount. Practice forming an opinion, advocating for yourself, and asking for what you want.

  2. Gather facts and figures to back up your negotiation. Determine the going rate for your position in the workplace. You can also chat with friends in a similar role, reach out to a mentor, or answer recruiter calls. Given this information, determine your “walkaway number” or the lowest acceptable number you’ll take as a salary before you walk away.

  3. Make a list of your major contributions and accomplishments. Be ready to talk about the great feedback you’ve received and other successes in your role. Ideally, this is something you’ll document throughout the year as it happens. We always think we’ll remember when the time comes, but it’s easy to forget important details after the fact. The more specific you can get here, the better!

  4. Make it happen by asking! Ask for what you want (and share the research you’ve done to make your case!)