When to Negotiate Your Pay...And Why It Isn't Always The Right Thing to Do
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If navigating the workplace wasn’t complex enough, it turns out that even the straightforward advice to always negotiate your pay — may be something to take with a grain of salt.
The prevailing wisdom for anyone reading the news (especially during a month where we commemorated Equal Pay Day) is that if you’re a woman, you should definitely negotiate your salary. In fact, approximately 70% of people responding to a Google Consumer Survey last July reported agreed with the statement that women should negotiate their pay more often.
Unfortunately, it seems that your avoidance of negotiation may not necessarily be just a failing in confidence, or fear getting in your way. It may simply be your gut telling you it’s the right thing to do.
In a Harvard Business School research paper published a few weeks ago, three professors kicked the tires on the common advice that women should “ask for more” (which they described as “leaning in”). This well-meaning advice is typically a reaction and response to a substantial body of social science research showing that women are less likely to negotiate than men, which is a potential source of the gender pay gap. In fact, the authors of this paper found that in their own study, women were about 11% less likely to negotiate compared to men.
What the professors did was run a social experiment whereby they “forced” women to negotiate 100% of the time in a simulation. They then compared the outcomes to a parallel experiment where women were allowed to choose whether to negotiate.
The results argue against any “one size fits all” solution when it comes to women negotiating for more pay. Both groups of women (those forced to negotiate and those able to choose), tended to benefit from negotiating. The negotiations ultimately led to a higher wage 49% of the time. However, when negotiations broke down (as they can do in real-life), women who were forced to negotiate saw their final wages cut below what was initially on offer 33% of the time. compared to just 9% of the time when they had a choice to negotiate.
Why did this happen? The researchers conclude that women know whether the offers they receive are less than what they bring to the table and choose to negotiate in the vast majority (88%) of of the time when they think they are getting less than they deserve. On the other hand, when the offer meets or even exceeds what a woman knows is fair, less than half (44%) of those with a choice, negotiated. In other words, most women who knew their offers were fair decided not to negotiate and this was the right decision if they didn’t want to get a lower offer, on average.
In the real world, it’s often hard to know whether we are being paid our worth. Rarely do people find themselves comparing multiple job offers for identical roles at the same time. So the advice to negotiate may simply be based on the belief that “there’s no harm in asking.” As well-intentioned as this advice may be, it simply might be going to far to recommend that everyone always ask for me. Sometimes, an offer is not only fair, but it can be better than fair.
And nuances like how, when, and who you are asking are things that cannot be controlled in a social science experiment. In the Harvard experiment, negotiations were online and anonymous. In real life, we tend to have a lot more information about the person who we are negotiating with, and we may even have a pre-existing relationship with them. Also, we know things about a firm’s culture and the financial health of an employer when we negotiate. All of these things certainly matter and may be part of any sane woman (or man’s) objections to negotiate.
This article was originally published on Laura Vanderkam's website here.
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