Do you negotiate your salary or accept the salary you are offered? Men tend to not stop at the first salary offered, but continue to negotiate for a higher one. But women are more likely to accept the first salary offer. This reality contains potential risks that cannot be ignored not only for individuals, but also for the organizations that hire them. Without careful examination and consideration, combined with gender differences in negotiations, it will soon translate into clear inequality in recruitment and salary, accompanied by expensive recruitment costs.
Piling up the disadvantages
Women soon learn the high cost of avoiding negotiation. In salary negotiations alone, women’s habits can cost them hundreds of thousands of dollars. Over the course of their careers, the small initial discrepancy between what they accept and what they deserve can grow.
Suppose two MBAs in their 30s, one male and one female, accept a job offer of $100,000/year. The man negotiates for $111,000/year, while the woman accepts the $100,000 salary without trying to ask for more. If there are no factors causing fluctuations, each year they both receive a regular salary increase of $3%/year, and by the time they retire at age 65, their annual salary gap will be $30,953/year.
The guy who negotiated the raise would also earn more each year over the course of 35 years of work. If he invested his “extra” annual income in a bank account with a fixed interest rate of 5%/year, the initial $11,000 would grow to $1.6 million by the time they both retired.
That amount of money is really beyond the imagination of the girl who refused to negotiate the starting salary. That is not even counting other benefits such as bonuses, stock options, pensions. Not only that, during the working process, men tend to continue to negotiate salary increases and promotions, and they can achieve greater success.
By skipping negotiations, women sacrifice a lot, not only money, but also training opportunities and career advancement, things they don't see at first sight.
The cost of organizing becomes expensive
If organizations give opportunities and promotions mainly to those who ask for them, they will inevitably waste the skills of their most talented women. Because men often ask for opportunities, they advance in their careers faster than their female counterparts, the inevitable result is that men will gradually fill the top positions in the company, despite the fact that some are not as talented as the women who are left behind.
When women accumulate disadvantages at work, they also have a negative impact on their bosses. People tend to quit when they feel they are not being appreciated. So if women see their male colleagues being given better assignments and higher salaries, they may decide to quit. Then the organization will have to pay more to recruit new people.
The immediate loss of staff will force other employees to take over the work of the departing person while the management searches for and trains a new person. This will reduce their morale, and also cause costs to skyrocket. According to calculations, this cost is equivalent to about 3.4% in revenue, and 45% in profit – a staggering number.
What can management do?
To ensure that all talent in the company is developed and utilized, contributing effectively to the organization, first focus on those who initiate negotiations, negotiate, and then adjust decision-making early. However, if managers only delegate tasks to those who make requests, which men often propose more than women, they will create gender discrimination.
Whenever a male employee asks for a new assignment, managers should stop and think about whether there is a female colleague who can do it better than him, but is just a little shy. This will help managers feel comfortable and correct the imbalance in the organization.
Additionally, the classic method of cultivating and nurturing talent – mentoring – can also be helpful. Many women have made rapid changes after applying the advice of a trusted superior:
- Realize that everything about your work life is negotiable.
- Willing to volunteer for projects that interest you
- Be proactive in pursuing your own career goals
Sometimes a boss can simply show a woman potential advancement opportunities, helping her see her own career in a new light. Help her understand that her boss knows what she needs to reach her full potential and that they will help her do her job better. It can also help relieve some of the stress and constraints that are holding her back.
Finally, businesses can work to make employees aware of how different responses to the same actions by women and men can hinder women’s advancement opportunities and affect the company. Why is it that, along with assertive attitudes at work, men are praised for being “brilliant”, “bold”, “dare to think and do”, while women are disparaged for being “boastful” and “conceited”?
A corporate culture where women are encouraged to speak up for themselves benefits not only them but the company as well.
* Linda Babcock and Sara Laschever are co-authors of the book Women Don't Ask: Gender and the Negotiation Divide (Princeton University Press, 2003) and Asking for It: How Women Can Use the Power of Negotiation (Bantam, 2008). Babcock is also a professor of economics at the H. John Heinz III School of Public Policy and Management (Carnegie Mellon University).
TuanVietNam.net
