OSPE recently discussed the province’s proposed pay transparency legislation. With Equal Pay Day just around the corner, we’re exploring the importance of negotiating with five practical tips you can use during a salary negotiation with a prospective employer or during a performance review in your current job.
According to OSPE’s Let’s Break Barriers survey results, 1 in 3 women indicated that they suspected they were being paid less than their male counterparts for doing comparable work. For those in this position, it can be discouraging to find out that a colleague is receiving a higher salary for the same position or duties.
While institutional biases can be a contributor to the gender wage gap, the issue may also stem from the fact that many women are hesitant to negotiate their salary and consequently pass up the opportunity to do so.
In her book Women Don’t Ask: Negotiation and the Gender Divide, Linda Babcock, an economics professor at Carnegie Mellon University, explained that according to her research, only 7% of women attempted to negotiate a starting salary in comparison to 57% of men. For those who negotiated, they managed to increase their salary by over 7%.
Interestingly, research shows that while men are significantly more likely to engage in salary negotiations than women, when women negotiate on behalf of another person, they are just as successful as men.
For some, the thought of negotiating their own salary can be intimidating and uncomfortable. What are the social consequences of my asking? How will the negotiation affect my reputation? Will I be viewed as aggressive or penalized in any way?
If we look at the 2016 OSPE Mercer National Engineering Compensation Survey, the average salary for a woman with eight years of engineering experience (Level C salary) amounted to $91,977. What happens if one person negotiates that salary and gets $98,000 while the other does not – what’s the cost of that? Some might say, “Is $6,023 really worth the risk?”
Professor Margaret Neale from the Stanford Graduate School of Business argues that this type of analysis is simplistic and inaccurate because that $6,023 is compounded. For women who are earning less than what they could be, this could add up to a significant amount of ‘lost’ compensation over the course of their careers.
If an employee who does negotiate and an employee who does not negotiate both receive the same annual raises from their employer, 25 years later, this amounts to a difference of $150,575. As Neale suggests, that $6,023 may not be worth the risk, but people should instead consider how many more years they would have to work to make that amount of money – over $150,000 – at retirement.
If you’re still unsure whether you should try negotiating your next or current salary, consider these points:
- A salary offer is not a “yes” or “no” choice, it’s an opportunity to negotiate
- By failing to negotiate, you may be leaving money on the table – in the short and long-term
- You don’t receive what you don’t ask for
- It’s better to ask the question than to wonder if you could have negotiated a better offer
- If you don’t make sure that you get everything you deserve when you negotiate your compensation, no one else will
- If you can increase your salary in a current or prospective job, you’ll also increase your future earning potential
Here are 5 negotiating tips to help you become your own advocate:
- Chronicle your successes:
- Keep a journal where you list your accomplishments, including recognition you’ve received for your work and goals you’ve achieved. Your exemplary performance in previous roles will help you explain and justify salary requests in the future. Chronicling your successes as they occur will also help boost your confidence when it comes time for the negotiation process.
- Do your research:
- Research the job and employer to be sure the compensation package is negotiable. There are some positions where the pay rate is set in advance.
- Websites like Glassdoor or PayScale collect salary information from employers and make this information available to the public. This can be a helpful resource or benchmark.
- Review your offer with a mentor – they may know someone working in this field or in a similar role who can provide open and honest feedback to help evaluate the offer.
- Access the OSPE Mercer National Engineering Compensation Survey via the OSPE website to find salary ranges for Ontario engineers, Engineering Interns and engineering graduates, broken down by location and industry.
- Practice your pitch:
- It helps to plan what you are going to say and practice saying it with a trusted friend, family member, colleague or mentor. Body language is important, so even practicing in front of a mirror can be helpful.
- You should now be ready to clearly and concisely explain why you deserve a higher salary. You can share the information you’ve collected, remind the hiring manager of your credentials and accomplishments and reiterate your ability to help the organization succeed.
- Keep it positive – and even creative:
- If the offer is much lower than you anticipated, ask for more money but don’t demand it. Even if you are successful in your negotiation, you want to avoid creating hard feelings. If the offer is so low that it is not realistic, it’s fine to mention that the offer wasn’t what you expected and to thank them for the offer.
- If the base salary isn’t negotiable, get creative when countering. Perhaps bonuses, benefits, a preferred work schedule, vacation time or training opportunities are negotiable. These are important elements that factor into your quality of life and can make the difference between a job or salary offer that’s competitive and one that’s “okay”.
- A simple thank-you to your prospective or current employer for his or her time and consideration can go a long way in demonstrating your professionalism.
- Evaluate your options:
- Remember, you don’t have to say “yes” right away. If you’re absolutely thrilled with the offer, you can accept it. Alternatively, you can ask for more time to formulate a strategy about how you’re going to handle the salary negotiation.
- Carefully evaluate new offers, taking into consideration your current job, future prospects at your current place of work, as well as other jobs you’ve applied for. Consider the benefits, retirement plan, flex time and other perks before you begin negotiating.
To help you get started, OSPE members can download a copy of the OSPE Mercer National Engineering Compensation Survey today.
Have salary negotiation tips you’d like to share? Let us know in the comment section below.