Save your company money; Give your employees a raise!
The start of my negotiation career
It was a beautiful summer’s day, sometime in June, 2008 that I found myself in a marble-clad top floor office in the heart of the financial district of Amsterdam, my hometown. Uncomfortable in my mum’s dress and heels, which I was wearing for the occasion, I’d made the journey to the offices of the law firm that had offered me a job as a trainee lawyer.
Today, I would sign my employment contract. I was intimidated, I’m not going to lie. The décor, the room… even the building as a whole was impressive. When the time came for the lovely lady in HR to slide the contract across the huge oak desk to me, she said with a knowing look, “Go on, take it home. Read it, have a think about it, and let us know if this works for you.”
You know what my response was? I laughed. One of those awkward, high-pitched eruptions of surprise and nerves. What the hell was there to think about?
I had worked so very hard to get where I was right now. The best law firm in my country had just offered me a contract, and it was a dream come true. Oh, and the money was INSANE. It was more than any of my friends were making.
That awkwardness and those nerves, though. They were still there despite my excitement. There was this little voice ringing in my head that said, “But Wies! What if they change their minds? What if they retract their offer? What if they find out I’m not actually that good, after all?” So, I signed straight away on that dotted line, without negotiating a single thing.
Let’s flash forward to six months later
I found out that all of my fellow colleagues in my cohort of recruits were now making more money than me. The boys, most significantly. This wasn’t because they were better than me, and I’m not even going to say it’s because they were male… It was because they had asked.
As I’m sure you can imagine – especially if you’ve ever found yourself in a similar position at work – over time, this all really started to bug me. Not because of the money itself, because that was still really great. But, you see, a salary is more than the figure your employer transfers to your bank account every month. Your salary is also an expression of the value that company places on your work – and on you as a person.
By paying me less, my employers were in effect telling me that my work didn’t matter as much as the work of some of the others in my office. I was working 100 hours a week! But what for? Why would I give and give and give, when clearly, the people who took and took and took really didn’t care that much about me?
With all of these questions burning away both in my brain and in the pit of my stomach, my work started to suffer. I found it really difficult to keep up the enthusiasm and energy required for the insanely long days I was putting, when apparently, it was a one-sided love affair. I couldn’t keep it up, and I left.
It isn’t just me
This scenario is playing out in countless organisations across the world. It’s a huge issue that affects many people, and women make up the majority of that number. Women in work are starting out in new positions – and even new careers – bringing so much to the table. But, they are NOT negotiating their salaries, or indeed, any aspects of their job offers. In fact, according to research from Professors Babcock and Laschever of Carnegie Mellon University, only 7% of women negotiate their first job offer vs 57% of men. In addition, a recent study from Robert Walters showed that more than half of women in employment have NEVER asked for a raise throughout their careers.
These women who accept the first offer presented to them… they don’t know – like I didn’t – that negotiating your job offer is actually expected. They think – like I did – that they should be grateful to the point of subservience… “I’m going to work so hard for these people, show them what I’m capable of doing, and prove my worth. And THEN! Then they’ll see all of this, appreciate me, and pay me what I’m worth!” Sweet really, isn’t it?
And so the downward spiral begins…
Of course, when this recognition and reward doesn’t automatically happen – because that’s not how businesses run – they lose that enthusiasm, motivation and inspiration. Then, when they see Bob down the corridor – who isn’t necessarily better at what he does but always seems to talk about himself and his accomplishments – gets promoted above them, it stings. When they yet again don’t get a salary increase, despite working their asses off and bringing great results for the good of everyone else, a little bit inside of them dies.
So, why don’t they just ASK for more, you may wonder? Why don’t they call for a meeting with their boss and tell them they are underpaid and deserve more? Why don’t they go right ahead and say that they’re ready for that promotion?
The reasons are complex, but in short, it comes down to this. Women are raised differently from men. Unlike boys, who are taught to take risks, stand firm, and speak up for themselves, girls are taught to be compliant, to be patient, and to think about others first. They become almost uncomfortable asserting themselves, and unlike boys, aren’t exactly naturals at talking publicly about their accomplishments (real, or otherwise). And so, it comes to pass, that upon entering the workforce, women haven’t really gained much in the way of experience of speaking up for themselves.
But also, we need to think about this. When they DO speak up, they are judged very differently from men. Much more harshly, for one. When women speak in the same assertive way as men, using the exact same words, there’s research to show that they’re actually penalised for it. They’re considered arrogant, they’re thought of as ‘bossy’, and they’re often referred to as the “B”-word. Nice.
No wonder women struggle to ask for a raise or put themselves forward for a promotion. It’s a difficult tightrope to walk for women, and so they stay silent, stay static, and get unhappier by the time that paycheck clears each month.
It’s bad for them AND it’s bad for business.
The business case for paying your women more
Employee turnover in the modern workplace is at an all-time high. According to research by the US Work Institute, a shocking 27% of employees quit their jobs last year, and apparently, that trend will continue to an estimated 35% turnover rate by 2023. Let me reiterate, for emphasis, what you’ve just heard me say. 27 out of every 100 people are voluntarily upping and leaving the workplace. More than one in every 4. Reasons for quitting might include lack of cultural fit or an unhealthy work environment, but predominantly, one of the biggest reasons is down to below-average compensation – especially for top-performers. I would venture – due to what I’ve already described to you in this talk – that this group of underearners includes a LOT of overachieving women…
Now, let me share some more numbers with you to make my business case. It’s been researched that it costs any given company between 100 -200% of someone’s annual salary to replace that person, with outliers going up even higher than that. This is one of the largest hidden costs in business. It’s hidden because most companies don’t have systems in place to track all of the tangible and intangible costs they’ll incur when a member of staff quits: advertising, recruiting, interviewing, hiring, orientation and training… and this is before we even consider loss of productivity, potential customer dissatisfaction, reduced or lost business, a deficit to expertise,
etc. It’s staggering.
Put simply, unless someone is massively underperforming, the cost of replacing them is something that any business should really be trying hard to avoid. When you stop your women employees from leaving your company due to feeling undervalued and underpaid by you as the person they work their ass off for, you’ll actually be saving your company far more money than you would should they leave after you overlook that pay rise.
This actually leads me to the idea that paying your women more money EVEN WHEN they don’t ask for that raise or come to you in a negotiation, is a sound business decision and a prudent financial choice for your company.
Here’s how that works out in practice
Let me leave you with the story of one of my clients at Women In Negotiation. Her name is Anita and she came to me because she was being overlooked for promotions she knew she deserved. For years, she had worked her ass off. Fixing things, making things happen, driving business. All had gone unnoticed, because Anita never talked about it, and never asked for recognition, such as a promotion or raise. After seeing more and more people get promoted ahead of her, this girl was ready to leave. She was Fed. Up. She came to me and we did some crucial work together.
Then, Anita learned to raise her hand. She found the confidence that reflected her job capability, and she acquired the skills needed to effectively have that career conversation with her boss. She got the promotion she so very much deserved. She excitedly called me up on Skype one morning – I think it was around 6am her time. She told me she got the team, she got the promotion, and she got a 45% salary increase to boot.
That’s great, right? But here’s what’s funny. Anita said to me, “Wies! You always say this isn’t about the money, and you are so right! I don’t care about the money. THIS is what I care about!” And she turned her laptop around and showed me her desk. It was full of Post-Its, lists, charts and graphs. It was a massive brain dump, basically! That’s why she’d called me so early. She had been up since 1am, as she couldn’t sleep – she was too excited about all these ideas she could finally start pushing forward now she knew how valued her role and her contribution were.
So let me put forward a rhetorical question here, friends: Who really won, as a result of Anita getting that raise? Sure, the 45% salary increase was a game-changer for Anita. But, can we all agree that having Anita showing up at her desk each day, with that level of excitement and inspiration to drive everything forward, is an even bigger win for the company she worked for?
Remember that Anita said it herself – this wasn’t because of the money, nice as it was. Her happiness was because of what that salary increase represented; a trust in her capacity to deliver at a much higher level. It was the company showing confidence in her as a professional; knowing that she would deliver, and believing that she would succeed.
So, in summary, is a call to action to all women employees who’ve never negotiated their careers and salaries. It’s time to have a conversation with your boss.
And, to all employers and managers out there… if you want your workforce of women to step up in such a major way as Anita did, then have the damn conversation. Find out what your women are able to deliver, and ask them how they do that best. And then, PAY them properly for the value they bring to your organisation.
You’ll be amazed at how bold and brilliant the women in your workforce truly are…
Book a call with my team for a free coaching session and let’s see what we can do for you!