News & Media

 

Salary Negotiation Skills are like Money in the Bank

May 5, 2006
Washington Business Journal, Rebecca Shambaugh

Imagine this: Mike, a good friend from graduate school, is in town on business. You meet for drinks, catch up on gossip and then begin to compare notes on work.

You were each recruited by Fortune 500 companies, and from the looks of it you are each doing well. Then Mike alludes to the amount of his last bonus, which you know is tied to his salary. Basic math tells you that he is making almost a third more than you. You studied with Mike back in school, so you know he does not bring more smarts to the table -- and he is not one to burn the midnight oil.

Then why, you wonder as you split the tab, is he bringing in the bigger bucks?

The answer is simple: Mike brings home the larger paycheck because he negotiated for it. And if you want to have an additional half-million dollars in the bank toward the end of your career, you will do the same.

In fact, when women ask me about how to retire rich -- whether they should invest in real estate, biotech stocks or just marry well -- I tell them that the most reliable way to end up $500,000 ahead by the time they turn 60 is to simply ask for it.

Unfortunately, this is one thing that many women, even powerful women business leaders, do not allow themselves to do.

According to the book "Women Don't Ask: Negotiation and the Gender Divide" by Linda Babcock and Sara Laschever,

20 percent of adult women (22 million people) say they never negotiate at all. Women are also more pessimistic about how much is available when they do negotiate. They typically ask for and get less -- on average, 30 percent less than men.

How can you get what you want if you do not ask for it? Women need to decide what they want, and then they need not only to "go for it" but also to ask for it.

In fact, even women on a par with their male peers do not advocate on their own behalf. In a comparison of men and women from the same prestigious graduate program, men negotiated for an increase in their starting salaries by an average of 7.4 percent, or about $4,000.

By not negotiating her first salary, a woman stands to lose more than $500,000 by age 60.

You must do the impossible: ask. Negotiate for what you are worth and for whatever you need to get the job done.

The way many women feel about negotiating reveals part of the problem. When asked to pick metaphors for negotiating, men picked "winning a ballgame" and a "wrestling match," while women picked "going to the dentist."

In fact, women are so turned off by negotiating that they will pay as much as $1,353 more to avoid haggling over the price of a car, which may help explain why 63 percent of Saturn car buyers are women.

There are a number of ways to sharpen your negotiating skills. The following focus on areas that may be unique to women:

  • Be prepared. Before you go into a negotiation, do your homework. Research salary and benefits packages so you know what is possible. Understand the other person's needs and interests and negotiating style so you can respond effectively. Make a list of your acceptable parameters, and stick to them.
  • Take it slow. Some women rush through negotiations because they want to get it over -- which ultimately means they give in too quickly or give away too much. When you negotiate, you are your own advocate. Taking the time you need reflects your power and confidence.
  • Make the most of your intuition. Women are often celebrated for their intuition and understanding, but in most cases we use these skills to serve others. When negotiating for yourself, it helps to understand the organization and the people you will be negotiating with. Anticipate what they want for themselves. Think about what they expect from you in the negotiation process. This is a time when your ability to read people can make or break a deal.
  • Be authentic. Trust is key to communication. Allow your genuine, powerful self to operate within the negotiating process. Tell the truth, respect confidences and present yourself as the strong, capable leader you are.
  • Use your power for yourself. Many women leaders are authoritative, articulate and confident when they work on behalf of their team or company. When it comes to the organization, they can move mountains -- but when advocating for themselves, they do not nudge a molehill. This is a valuable habit to recognize because it is at the heart of why women do not negotiate well. Apply the skills that help others to your own life and needs.

The bottom line for women leaders is this: If you want the salary you deserve, the person in charge of making this happen is you.

Your boss may appreciate you, your colleagues may praise you and your staff's accomplishments may reflect well on your management style, but none of this translates into a paycheck. Many women believe that if they do a good job, they will be recognized. Unfortunately, the kind of recognition they get may be a plaque on the wall.

Salaries are not based solely on performance. They are also negotiated. If you want a better bank account, stand up for yourself, do your homework and ask.

Rebecca Shambaugh is president and CEO of Shambaugh Leadership, a leadership and organizational development consulting firm. Web site: www.ShambaughLeadership.com