This Is How Much Money Women Miss Out On By Not Negotiating
Would you like to earn more money?
Before you stop reading out of suspicion of a pyramid scheme pitch, consider possessing the power to increase your paycheck while remaining in the exact same job you currently hold. Sound too good to be true? Overall, across every field, women earn less money than men. Whether you support a straightforward cause of this reality, or you endorse a more nuanced explanation to a complex issue, you alone can help correct the imbalance at large by taking concrete action in your own career. Chances are your male coworkers have already taken advantage of the system by asking one simple question that you may never have. If you’d like to earn more money starting now and in the future, assert yourself with the same inquiry as your male counterparts — ask for a raise.
In her career advice book "Own It: The Power of Women at Work," Sallie Krawcheck delves into the evolving business world, presenting fascinating statistics and encouraging women to take charge in shaping their companies into places they want to work. Her main focus is the magnitude of women asking for raises, who thereby make sound investments in their careers and fully engage in the economy to add an estimated $12 trillion in economic growth. Let me say that figure again, and really let it sink in this time. $12 trillion.
What does this startling number mean to you personally, according to Krawcheck? Say you currently earn an annual income of $85,000, and you land a 28% raise (which would put you on par with the guy in a similar position who theoretically already requested a bump in salary). Over the next forty years with this boosted paycheck, you will make an additional $1.1 million. See? The article’s title isn’t just a sensational exaggeration! Even asking for a seemingly measly 2% higher raise each year makes a substantial difference over the course of three decades. Starting at $50,000, a 5% annual raise will place you at a salary of an additional $88,525 after thirty years, as compared to a 3% raise. Can you imagine how significant an effect on your family earning that much more could have?
Let’s take a look at another tangible example that emphasizes the necessity of voicing your case for a raise to ensure you actually receive the money to which you are entitled. Krawcheck breaks down the inequality that could result from not inquiring about a raise by comparing two employees, Joe and Joanne. Since both have had a successful year, a $5,000 bonus is lined up for each. Joe has established a routine and sits down with his boss for their weekly chat, during which he mentions that he’d like a $10,000 bonus this year. Though it may seem unlikely that Joe’s request will be fulfilled, the company does not want to lose him and does, in fact, arrange a $7,000 bonus for him. The inflated bonus for Joe, however, comes at the expense of Joanne’s. Despite performing just as well, she will only receive $3,000. No, she is not valued at $2,000 less than Joe, but he was the one to ask for an increase. When bonus money is allocated out of a pool, preset amounts can easily be adjusted to accommodate those who solicit more. Just because a certain amount is originally designated for you doesn’t mean that funds won’t be reapportioned to favor someone who took the situation into his or her own hands.
If these facts are as shocking and inspiring to you as they were to me, why aren’t we all breaking down doors and demanding our fair share? Krawcheck addresses the natural instincts that prevent many women from asking their managers for raises. The data reveal the truth that we’re simply not programmed to do it “the man’s way.” We fear this tough type of approach will only work against us, that we’ll be perceived as “not team players.” Furthermore, men generally focus on the short-term outcome of the situation, that is “winning” the raise. Women, on the contrary, tend to put more stock in the long-term--preserving the post-negotiation relationship. Are these feelings ones you can relate to or have experienced yourself?
The Gist:
It is clear how much we have to gain--literally--by negotiating our salaries. In order to start earning the money we are worth, we have to combat our female natures and ask for the raise!
- In the bigger picture of the professional world, your assertiveness will help to close the gender pay gap with feasible action on the individual level. Asking for a raise is not only a step toward equalizing the wages of women and their male associates but will also work to counteract the disproportion between men and women when it comes to initiating the compensation conversation.
- In your own career, asking for a raise gives you the potential to earn significantly more money over your lifetime. Remember? Up to $1 million more! Speak up to start making the salary you deserve, before it is distributed to someone else who beat you to the punch.
- Still need a surge of confidence before setting up the meeting with your boss? Krawcheck tells us to “play to our strengths when we negotiate.” Forget the manly concept of winning and think like a woman! Research proves that women are unstoppable negotiators when we reframe the idea of the raise as a self-serving prize and think instead in terms of how it will benefit others--namely, our families. When you walk into your manager’s office, have in mind those loved ones whom you work for, and you will maneuver the discussion with innate skill and sincere passion.
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Hi, there! I’m Allie Hofer, an HR professional and work-life balance enthusiast. More officially, I’m a Professional in Human Resources (PHR), Society of Human Resource Management – Certified Professional (SHRM-CP), and Recruiter Academy Certified Recruiter (RACR).
After having my first child, I opted out of the traditional office setting to work from home. Since then, I have been consulting with organizations in the public and private sectors to support the Human Resources function in recruiting, compensation, training and development, and performance management.
I started Office Hours to offer a boutique HR solution for small and medium-sized businesses and to help candidates navigate and completely own their career paths.
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