Research Aids in Negotiating Skills
Q: I'm uncomfortable negotiating when offered a salary; I've always just accepted it. I have good work experience, and I graduated from a good university, but through casual conversations, I know men with lesser backgrounds and fewer abilities who are making more than I am. Most guys don't seem to have the apprehension women have in negotiating. What does it take to get ahead?
A: "It's not uncommon to find surveys and news reports that show female job candidates tend not to negotiate salaries as aggressively as their male counterparts," says Paul Falcone, author of the best-selling "96 Great Interview Questions to Ask Before You Hire." "It's important to know the tide is changing in pay disparity and closing the gender wage gap is as important to government legislators as it is to individual companies. It's time that the (roughly) $0.81 on the $1.00 pay gap be seriously addressed." What's more, Legislation that offers "changes from pay secrecy to pay transparency to pay privacy is being introduced at record rates."
Pay privacy offers the greatest impact on one's ability to negotiate a job offer. Falcone says: "An employer is not permitted to discuss salary history with a job applicant until after a conditional offering of employment is extended. That means that a job candidate won't be pressed to discuss salary until the post-offer/pre-start stage of the hiring process (where background checks, drug screens and preemployment physicals typically occur).
That benefits job candidates because, theoretically, they're no longer limited by salary history and have an opportunity to close the gap that often exists between genders. The legislation's attempt to rectify pay disparity between the genders will rest on turning a temporary blind eye toward salary history and withholding compensation considerations until after a conditional employment offer is made. Once that offer is extended, the employer can then ask about current and historical levels of compensation and one's desired compensation amount.
Current laws and legislative initiatives go further by declaring such inequities and inconsistencies a form of discrimination. In short, employers can expect to see increased judicial scrutiny of pay disparities between genders as these initiatives progress. Falcone suggests women use this momentum and additional time during the interview process to their advantage. Three considerations typically go into every offer: salary range, budget and internal equity.
The salary range is the broadest element: For example, a salary range may read $42,000 to $68,000 (a 60% span with the midpoint around $55,000). He explains that employers prefer not to make offers above the midpoint market rate, and it can take four to eight years of previous work experience to qualify for it. The salary range tends to be broad and can span 100% for higher-paying six-figure positions.
Budget is a much more practical consideration. If a candidate was earning $46,000 and the company cannot pay above that amount, the recruiter may have to get permission from the head of finance or CEO to cover the variance.
Internal equity is most critical, though it's unknown to the candidate. It means the employer has to slot a new hire's salary into the existing staff's salary range. If a candidate has two years of experience and colleagues on staff average five years, the company will pay the candidate less than the existing staff by an appropriate margin. If the candidate has five years and existing staff members have only two, the candidate will likely get an offer for the highest level of pay, even though they will be the newest team member.
The danger in this lies in overpaying a new hire. As part of the recently passed pay secrecy legislation, employees are legally protected in talking about salary, benefits and "other terms and conditions of employment." If they hear a less-experienced new hire is making more than them, they'll often quit. Thus, the result of making an inappropriate job offer could be that the employer loses three people after hiring one.
To prepare to negotiate salary, rely on the new "pay transparency" legislation to help guide you. Pending legislation aims to mandate that employers post wages or pay ranges in job ads. Research salary ranges for the job title, geographic area and company size on PayScale, Salary.com and Glassdoor, but understand these sites are self-reporting, so there's little vetting or validation by an objective third party. This results in exaggerated amounts, but it still provides touchpoints for the market rate.
Decide in advance what you'll accept and what you'll reject. The low unemployment and tight labor market can work in one's favor now, especially in a high-demand field -- including hourly, nonexempt and blue-collar jobs.
Be realistic in assessing your market worth. Employers typically don't award 25% to 40% increases just because candidates feel like they've been underpaid up to now. Most experienced recruiters can ballpark how much a candidate is making based on their resume -- years of experience, company size, geography and education or skill level. If a job seeker feels they need a 40% raise, they should accept the job with the intention of leaving in two years for another company that will offer a significant rate increase. Typically, a person can't catch up to market rate in one fell swoop. If they feel seriously underpaid and below market, it may take two or three moves within a few years to catch up. Generally, 10% to 20% increases above one's current salary level are reasonable. Match benchmark information to your own salary data to determine a reasonable salary offer.
Finally, when discussing salary, keep the conversation open for as long as possible. For example: "I've done homework to understand what the market worth may be for such a position. I'm earning $24 per hour nonexempt, and I'm seeing that $27 to $30 per hour may be a competitive rate for someone with my background. Does that seem like a reasonable range given your salary range, budget and internal equity considerations?" Speaking the language of compensation can demonstrate your level of sophistication. That in itself may justify offering you a higher salary. Even if the employer tells you what the salary offer is before asking you for a number, you'll have your discussion points mapped out and can still share your research.
Email your workplace issues and experiences to email@example.com. For more information about career and life coach Lindsey Novak, visit www.lindseyparkernovak.com, and for past columns, see www.creators.com/read/at-work-lindsey-novak.