The Saturn car company has a "No Hassle, No Haggle" system of selling cars. Most car dealerships operate with a significant markup on the cars, creating a buffer on which purchasers can negotiate. Dealerships have the room to move the price down or throw in options at "no charge." But Saturn operates differently. Their sales prices on cars are set at a fixed amount - cost plus a little something. This price does not have a built-in buffer, allowing customers to leave their negotiating skills at the door. Studies have shown that women may pay as much as $1,353 to avoid negotiating - possibly helping to explain why more than 63% of Saturn customers are women. In another study conducted by the Dohring Company, women are 40% more likely than men to accept the first price a car dealer offers. Unfortunately, this dislike of negotiating goes beyond the dealership and into the boardroom.
According to the U.S. Census statistics, women continue to earn less than their male counterparts, $0.766 for every $1.00 earned by a man. The continued wage gap is not reflective of a difference in talents, skills, education, experience, drive, or responsibilities between men and women in the same position; women even outnumber men in undergraduate and graduate institutions (National Center for Education Statistics), but graduate with only 87% of the same salary a man would receive. This wage gap does not develop in the middle of a woman's career, but is more systematic. From the time a woman accepts a new position, she is paid less than a male counterpart with the same background of skills and experience. Do companies simply not value their female employees? Of course not. But women may be the ones undervaluing themselves.
Women are often more grateful than men to simply receive an offer, leading them to not even bother negotiating their salary. Women's salary expectations are 3% to 32% lower than men's salary expectations for the same position, clearly not realizing their value to the company. If salary expectations are too low and a company offers a low salary but it meets the candidate's less than average expectations, the woman will likely accept this inadequate offer. Accompanied with the belief that they may not be worth an extra $5,000, women also feel 2.5 more apprehension then men when it comes to negotiating. This results in men initiating negotiations 4 times as often as women.
So, you're a woman that does negotiate an initial salary? Well, you're not off the hook. Women that do negotiate often ask for less - on average 30% less than men. If you ask for less you will of course get less. A study of MBA students by Lisa A. Baron, an Assistant Professor of Organizational and Strategy at the Irvine School of Management, conducted mock interviews with an equal number of male and female students. The interviews were for the same position and the same base salary was offered. In the negotiations, men tended to ask for higher salary increases. In her study, 71% of men said they believed they should make more than the other job candidates, while conversely, 73% of women said they believed they should receive a salary equal to other job candidates. Furthermore 83% of women in her study said that they were uncomfortable equating their net-worth with a dollar figure, and that should be the responsibility of the company. In another study at Carnegie Mellon, 8 times as many male graduate students negotiated. The men that negotiated increased their starting salary by 4.7%, or $4,000; in the same study men's salaries were on average $4,000 higher than women's salaries. Connecting the two data points leads to the conclusion that the wage gap can be significantly narrowed by women negotiating for their initial salary offer.
Apart from a high salary, other benefits may be important to women, such as flexible work schedules, location, and vacation time. However, even when these are taken into consideration, women's salaries are still less than men's salaries. So what are women missing out on? By the time a woman is 60 years old, she will have lost more than half a million dollars in income because of the wage gap by not negotiating salaries. Conversely, women that consistently negotiate their salary throughout their career can earn at least $1M more than if they had not negotiated.
Are women just not skilled in the art of negotiation? When negotiating on behalf of their company or project team, women have no problems negotiating. However, when it comes to their own needs and wants, women do not come forward and clearly ask for what they want. The solution is to just do it. The more women ask, the more "acceptable" it will become and the more women will become comfortable in negotiating their own salary; consequently the wage gap will continue to narrow. Here are some helpful tips on negotiating your offer:
1. Be Armed with Knowledge.
a. Research Salary Information.
Know what the current market rate is for the position and geographical region. Speak with colleagues, friends, professional associations, and for your job out of graduate school - the Office of Career Development can play an important role. There won't be one magic number - through your research you will come up with different numbers. Create a salary range of what is reasonable. A lot of this information can be found online, at websites like the U.S. Bureau of Labor Statistics (www.bls.gov). And don't be afraid to speak with friends about salaries. The subject is often taboo, but it shouldn't be. We can all benefit from increased openness.
b. Assess Your Own Self-Worth.
Based on your own education and background, where might you fall in the salary range? But under NO circumstances should you underestimate yourself! Don't be bashful. You won't come across as selfish or conceited. If anything, you'll come across as naive if you don't give yourself the credit you deserve. It often helps to make a list of everything that you bring to the table. Remember, they want you for a reason - you're coming to the table with a lot to offer. Be prepared with this information.
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