Just Say No

9
Dec

When it comes to money, there are plenty of things to say “No” to. Continuing in our theme of discussing how to talk to your daughter to prevent the financial consequences detailed in our “Nixing the Money Taboo” post, the topic today is the importance of saying “No” in salary negotiations.

As we have detailed in earlier posts, the median earnings for women working full-time are 77%  that of men’s, and women who recently graduated from college are still negotiating lower starting salaries than their male counterparts, a move which by some accounts could cost these young women half a million dollars in lost earnings over a lifetime. Since income is a huge part of financial health, salary negotiations are a key topic to understand. When I ask my high school- and college-aged students if they would negotiate a higher salary when offered a job, I usually get a “No.” The responses tend to include the following:

  • “I will work hard and get noticed, and then I will get a raise without having to ask for one.”
  • “I do not want the company to sacrifice. What if my earning more money hurts the company or takes away from one of my co-workers?”
  • “I have no idea how to negotiate a salary!”

Like many women, I have made all of those mistakes. I went through much of my work life, assuming #1 and getting some pretty decent — and unsolicited — promotions and salary jumps that fed that belief. As for #2, I felt that way when I worked for a small financial start-up. The job was initially a part-time endeavor meant to help finance my time in graduate school. I was happy to have lucrative, flexible work, so never questioned my salary or bonuses. When one of the partners wanted to me to have a company Blackberry, I had to be convinced to take it. I did not want to cost the company when we were launching a new product.

In the end, my part-time contribution was valuable enough to lead to consideration for a partnership in the business. As I moved through the partnership process and gained access to the financials, I realized I had been vastly underpaid compared to the otherwise all-male staff. That was a huge burn that took me a while to recover from. In fact, I was so soured on the experience that I opted to negotiate an exit from the company rather than a partnership, and while I walked away with a small pay-out in recognition of my contribution to the success of the product, it was not equal to what I was underpaid, nor did it do much to repair my self-confidence.

But it was a valuable lesson. I came to understand that I was not paid less because I was considered to be worth less, but because I never asked for more. So then came #3. My first job negotiation after the exit from the start-up was a completely different story. I spent time researching and understanding the market for the job I was seeking, and my value within it. In the salary negotiation, I held firm to my numbers and owned and thoroughly articulated my value to the company and my understanding of the job market. I left the negotiating table with a strong offer.

To affect a change in disposition around negotiating a salary, in my classes, we do the “Just Say No” exercise. Students research the salary market for a field they are interested in. They then pair up in an activity to negotiate starting salaries. The only requirement of the exercise is that the student says “No” to the first salary her partner offers. It’s that simple. Inevitably, the simulation leads to a hearty negotiation on both sides. Feedback I have gotten from students over the years is that saying “No” is not only freeing, but empowering. In fact, after the last class where we did this exercise, two of the students went out and renegotiated their hourly babysitting rates. It was a great learning experience for the whole class (and a proud moment for their teacher!).

So how can you help your daughter have a voice when it comes to expressing and owning her worth?

Here are some ideas:

1. Know your market — It is critical to go into a salary negotiation knowing what the job generally pays. This way, you can avoid undervaluing yourself, but will also avoid asking for a number that is so unrealistically high that you lose credibility.

2. Know your worth — Understand how your background, skills, and knowledge add value to that particular position, and that specific organization, so you can articulate it in the negotiation.

3. Understand your interests are not aligned  — Think about what is going on at the other side of the table. While it is in your best interest to earn more money for yourself, it is likely in the best interest of the hiring company to save money and not pay you any more than they have to. In other words, it is unlikely the organization will do you a favor and pay you more without being asked.

4. Value comes in different forms — The idea of value here is a critical piece of the job negotiation puzzle. It may be that you are not able to negotiate the salary you want, but the job has value nevertheless, either because you love the work, or it is a stepping stone to something even better.

Understanding how to articulate and stand by one’s value is an important lesson for girls of all ages. Understanding money is a big part of that, and there is a lot more to know. If you want to learn more, I would love to hear from you!

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