The Cost of Not Asking
Linda Babcock, an economics professor at Carnegie Mellon University, set out to quantify the cost of women not asking for what they need. What is the actual cost of not negotiating? In her fascinating book, Women Don’t Ask, Negotiation and the Gender Divide (2003), she details the impact of negotiating a salary one single time. Pretend that an equally qualified man and woman receive job offers of $25,000. The man negotiates his salary up to $30,000, and the woman quietly accepts the $25,000. That’s it. Now let’s say that neither of them ever negotiates again. They get three percent identical raises every year throughout their careers. By the time they are sixty years old, the gap in their annual salary is more than $15,000. (She is now earning $76,870 and he is earning $92,243.) The startling fact is that he has been earning extra money all along, from that original one-time negotiation. Thirty-eight years later, he has earned $361,171 more than she has over the course of both careers!
Does this difference shock you? Remember, it derived from a one-time negotiation! Seeing and realizing this difference can give you the incentive to start taking care of yourself financially. But be mindful that another thing that stops women from negotiating on their own behalf is what experts call the “fairness gene.” Women have a sense of fairness, which makes them think everything in life should be fair. I wish everything were fair, too. In a fair world, you would work very hard, be noticed by your boss and be given a raise and a thank you. But in the real world, you must toot your own horn and ask for what you need. Remember, you get what you demand, not necessarily what you deserve.
The Self-employed Challenge
Self-employed women face an especially difficult task here. They must actively tell people how much they are “worth” on a daily basis. There is no one who sets their rates for them or tells them what to do and what to charge. Therefore, they must believe in their gut that they are worth making good money in order to state their fees comfortably. If these women set their original fees too low, they will face a continuous struggle to get them up to market rate. Women in private practice, be they lawyers, therapists, or other independent professionals, must raise their rates regularly, and by enough money each time so as to not fall behind in their earning power.
Doing the Research
There are two phases to asking for more money, and the first phase is doing the research. Would you ever buy a car without looking at what similar cars were going for? Probably not. So take some time in front of your computer and do a little research. Start by visiting www.salary.com, and play around with job descriptions that match or overlap what you do. For other sites, go to Google and type in “salary survey.” Within an hour, you will be shocked at how much you know. The goal is to earn at least the current market rate for your position, and ideally higher. What did you find? A lot of women get in touch with their anger in this phase because they realize they are indeed underpaid. This anger can be great fuel for getting up the gumption to ask for more money. (And yes, it is acceptable to bring printouts of your research to a meeting with your boss!)
If you are self-employed, research is still imperative. Surf your competitors’ Web sites. Some will have their rates listed. Many will not. But this is a great function of networking. Many colleagues will share their hourly or package rates with you when you ask them privately. It is imperative to know what your competitors are charging!
