Women must negotiate to even pay disparity

22:22, Jul 15 2013

The pay equity debate comes in two parts. Firstly, the way in which society "values" certain roles.

When and why did we determine that nurses and teachers should be paid less than policemen? Is it because mainly women are nurses and teachers, and mainly men are policemen? Ultimately this comes down to a value judgment, but there does appear to be some institutional sexism in this assessment.

The second issue is that even within the same jobs women are paid less. The reasons for this are complex, and include how employers evaluate the different types of skills employees have to offer. But the other significant aspect is that many women do not negotiate as effectively for themselves as men do.

In researching and writing her book Women Don't Ask, American author Linda Babcock asked a male and female MBA (master of business administration) graduates who had secured employment whether they had attempted to negotiate the offer they had originally received. The results were interesting; 57 per cent of men had attempted to do so, compared with about 7 per cent of their female counterparts. In doing so, these employees had on average been able to secure salary increases of more than 7 per cent.

Translate those percentages into actual salary. Two people are offered a salary of $100,000. One person negotiates an increase to $107,000. The other simply accepts the amount that was offered. That might not seem a huge difference at the outset. But over time, and assuming that both are treated equally in terms of future increases, promotions and bonuses, in 35 years' time the person who did not negotiate will have to work an additional eight years to be as wealthy at retirement.

Stanford University's Professor Margaret A Neale, an accomplished negotiator who also lectures extensively on the subject, was interviewed recently for business website The Daily Muse.


Her view is that women suffer from systematically lower expectations when negotiating on their own behalf, and are more concerned at the reputational damage that could come from being seen as selfish, self-important, challenging or difficult, even before the employment relationship has begun.

In Neale's view, preparation and appropriate framing are the key to successfully negotiating better outcomes. Her advice? Package, prepare and remain as open as possible to as many options as possible:

Package. Approaching a negotiation issue by issue is more adversarial than taking a package approach. Ask the question: "What do I need overall, to be effective in this role?" Salary may only be one part of a bigger equation, especially if flexibility, home officing or more holidays might be as or more important to you. It also gives the employer more scope to agree to some or all of the overall package you've proposed, both because you have provided your reasons for it, and you have given options as to how your desired outcomes might be achieved.

Prepare. Use your networks, surveys, reliable anecdotes - anything to increase your knowledge of the going rate for the position you are interested in. Your own individual worth is not necessarily vital to the basic issue of what the market is prepared to, and does, pay. You should then consider how you, and only you, can provide the employer with solutions to particular problems or issues it may be facing. Taking a "what I can do for you" approach can alleviate or avoid any personal concern or discomfort at simply expounding stridently your own proven competencies. Neale recommends a "communal benefit" or mutual problem-solving approach.

Options. Don't discount possibilities in other geographical locations, alternative organisations or even differently slanted roles and responsibilities, simply on the basis that they are unfamiliar. Exploring other options may result in outcomes that are unexpected but mutually beneficial. The more interest you can create in yourself, the more valuable you become to potential employers.

Under the Employment Relations Act employers are obliged to "negotiate" employment agreements with employees.

However, more often than not agreements are presented as a "fait accompli" - or at least employees assume that this is the case. In other words, if they want the job this is the offer and they should accept it.

In my experience employers do not think poorly of an employee who seeks to negotiate their terms and conditions of employment. In fact, this may demonstrate to the employer that the employee has confidence and commercial nous. Of course there are cases where someone may go over the top and attempt to renegotiate every aspect of an offer. This may appear pedantic and unhelpful.

But the message to employees (especially women) is to consider what your bargaining leverage is, and don't necessarily accept the first offer made. You would not if you were selling a house.

- Susan Hornsby-Geluk is a partner at Dundas Street Employment Lawyers.

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