I recently came across a study by Benjamin Artz, Amanda Goodall, and Andrew J. Oswald that concluded that women actually are asking for raises as often as men, but their requests are treated differently. This led me to another interesting study by Andreas Leibbrandt and John A. List that found that men and women had similar negotiation behaviors when job descriptions specifically noted that the wages were negotiable. If it was not mentioned, then the men in the study were more likely to negotiate than the women.
While these studies haven’t solved the gender pay gap, they do provide some insight into some things that women should consider when negotiating. In this vein, I've created a two-part video series sharing some of my negotiation tips.
Negotiation Video Part 1 (WATCH HERE)
Negotiation Video Part 2 (WATCH HERE)
These studies also reminded me of a recent client success story. Last year, a client of mine found out that she was making less than her male subordinate. She spent months trying to remedy the situation without success. So, I was thrilled when I received an email regarding a job offer that she received. The position offered a 20% pay increase, interesting work, and a better commute. Sounds great, right? It was great, but I wanted her to make an educated financial decision. Here’s what we did:
I gave her permission to negotiate. Similar to the Leibbrandt and List study, I felt it was important to make it clear that this was an option.
I did a little bit of research on the salary ranges for her job title and found that she had a lot of room before reaching the top of the average salary range.
I reviewed the current employer benefits and concluded that she’d be losing $4,500/yr. of employer retirement contributions. This gave her a tangible number that wasn’t factored into the original offer.
By the next day, she had negotiated an additional 5% salary increase and had signed off on the new job offer. She’s now happy in her role and has up leveled her finances in a manner that will compound over her lifetime. I’m proud to say that she empowered herself to reach this financial possibility and I look forward to seeing where else her career will take her.
Ask yourself whether you are taking the steps to be the BOSS of your financial life. And do you have a plan to get there? If not, then let me know if we can help.
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