The topic was the gender pay gap, and the focus was salary negotiations. As in how to do it. Specifically, how to teach women to do it.
Here’s the problem: it’s not that women don’t know how to negotiate - if they’re looking out for their kids, or their colleagues, or their companies, women are effective negotiators. Where we get tripped up is in asking for ourselves.
It’s not that we don’t know that salary negotiations contribute to the gender pay gap: women start out making less and the problem compounds itself from there. It affects bonuses and retirement contributions, and over the course of a woman’s career, can cost her millions of dollars1.
But our current solution of training women to negotiate doesn’t attack the problem at the source. The source of this problem is that we negotiate salaries at all. Salary negotiations are based on a male norm and the ways we socialize men around competition, risk, and reward. No amount of training will make most women truly comfortable with the process. Which is may be OK because what the research has shown is that even when they ask, women have a lower rate of success. And are often viewed less favorably by their colleagues.
It doesn’t have to be that way.
Companies can stop negotiating salaries. They can set a fair market value for a job and stick with it. They can eliminate the game they play around hiring and promotions and create compensation practices that value each individual, not just the guys.
The way we’ve always done it isn’t a justification for trying to “fix the women” instead of fixing the system. We can attack the gender pay gap at one of its key sources by eliminating the practice of negotiating salaries.
Salary negotiations aren’t essential to the way we do business. They are nothing more than a sacred cow - a sacred cow that needs to be put out to pasture.
Figure shows impact of a $5,000 salary difference in the starting salary of a male and female colleague with 5% increases every year. By age 33, factoring in one maternity leave, the annual salary difference has grown to nearly $20,000. By age 40, factoring in a second maternity leave, the difference has doubled to over $40,000. By the end of their careers, the salary difference is over $100,000 , and the woman’s lifetime earnings are nearly $2 million lower than the man’s. This does not include bonuses and does not reflect retirement earning differences. With 4% increases, the lifetime difference is $1.35 million. ↩