Women and Negotiations: Don’t Be Afraid to Ask! (Updated version)

Posted on May 18, 2008 11 Comments

For a lot of young women, negotiations are as uncomfortable as stepping into a wet swimsuit, and as painful as walking in too-small stilettos. Asking for more money, or getting a service for less money, feels awkward and unnatural. But in a negotiations workshop I recently attended at the Kellogg School of Management, I learned the importance of asking for what I want, and the harsh consequences of not negotiating.

Our class started with an exercise in humility. Half of the room played the role of a “new hire” asking for a signing bonus, while the other half played the role of an HR person charged with giving the bonus. The goal of the new hires was to get as much of a signing bonus as they could – up to $30,000. The goal of the HR rep was to “make the hire” with a bonus of $20,000 or less. Neither side knew of the other’s goal.

I played the HR rep in my exercise. While I was prepared to go up to $20,000, my new hire started the bidding by asking for only $10,000. I pushed back a bit, but she ended up getting her inital ask ($10,000) out of me, and felt good that she secured her initial ask. I felt great that I saved my company $10,000 dollars on the deal.

We then rejoined the larger group, and learned that a few other women – about five out of 100 – had secured a $20,000 bonus. When my partner learned I could have given her up to $20,000, she was surprised. “I should have started at $30,000!” she declared. And she was right. In fact, nearly all of the women in the room ended up negotiating a $10,000 signing bonus because they felt awkward asking for more, or didn’t feel they deserved more. That’s a lot of money left on the table.

Kellogg Professor Vicki Medvec has seen this scenario play out time and again without fail. She’s a professional negotiator, professor of management and organizations and executive director of the school’s Center for Executive Women. “Women don’t ask,” she says, “and it’s costing them in the long run.”

In her research, she’s observed that from day one in the workforce, men negotiate for greater salaries and benefits than women. In general, men aren’t afraid to ask for more, or to jump on an opportunity for advancement, while women feel they will eventually be rewarded with a promotion or raise for the good work they’re doing.

As young, working women, think about the effect this can have in the long-term. If your male colleague gets hired to do the same job for $20,000 more than you as a starting salary, what’s the effect when you both get five percent annual raises? If a new position is open and you apply but don’t follow up because you don’t want to seem pushy, what’s the cost of missing the opportunity for advancement?

The above examples aren’t made up, they came from women in my workshop (and were echoed by the experiences of many other attendees). Medvec noted that women often feel so “honored” to receive a job or promotion, they often don’t think about negotiating for more to go along with the position. This might mean accepting a new title, or new account, without additional pay, vacation days, benefits or support. It’s flattering to be recognized, right? Most women probably feel they’re “pushing it” to ask for more.

Interestingly, research shows the “women don’t ask” rule generally applies to negotiations on behalf of ourselves only. Women actually do quite well negotiating on behalf of their companies. So why are we afraid to ask for ourselves?

Medvec shared some insights from her research that stem all the way back to childhood household chores: girls are given primarily indoor tasks, like washing the dishes or sweeping the floor, while boys are frequently given outdoor tasks, like washing the car or shoveling show. Outdoors, neighbors might approach the boys to ask how much they charge, sparking the idea that “free” chores can also be done for profit for neighbors. (Medvec called this “exposure to external labor markets.) For the girls indoors, this isn’t the case. How many neighbors ever asked you what you charged for vacuuming the rug or dusting the bookcase? Me neither.

So how can women learn to be better negotiators for themselves? Luckily, there are a host of techniques and tactics that can help us collectively improve our bargaining results. Here are a few that I learned:

1) Be prepared.
Know what you want before you go in, and know why you deserve to get it. Don’t think about your argument in terms of your life (ie. I should get a raise because I can’t possibly afford the cost of living in Chicago on my current salary.), think about it in terms of value you bring to the company. Come prepared with a list of your accomplishments, praise, client satisfaction, etc.

Under this point, doing research is also a top priority. If you’re landing a new job, know what others in your industry are making. This is particularly helpful if you’re moving to a new city, where salaries may vary greatly – you don’t want to start your new job with an earnings gap!

Finally, figure out exactly what you’re asking, what you’re prepared to give up and what your best alternative is. (In other words, how low can you go before you walk away? And where would you walk to?)

2) Find a mentor outside of your circle.
We tend to ask our mentors before making a business move or attempting a negotiation. But what if we’ve filled our ranks of mentors with people exactly like us? Sometimes, we need to ask for opinions outside our trusted circle. Medvec takes this a step further and actually argues that women should have a male mentor to bounce ideas off of. I can vouch and say that in my experience, men in my field often have completely different views of what is “risky,” when advancement should happen and what raises and promotions should look like. I’m always blown away by their perspective. Maybe that’s why in PR, our entry levels are filled with women (like 90 percent) and our managers are all men.

3) Money isn’t always the main goal.
Develop an inventory of all the points that would be “wins” for your negotiation. If your boss can’t give you a raise, are there other points you can talk about? More vacation days, better support, new responsibility, advanced training or perhaps a better understanding of your career path?

The idea here is that it’s much more difficult to negotiate when you’re only negotiating on one point. If money is your main goal, and you walk into your boss’ office and ask for $10,000, and she says, “I can’t right now due to the economy,” you’ve lost. Medvec says it’s much more effective to go in with an A, B, C approach, so you can say, “OK, if I don’t get A, how can I still get B and C from this negotiation?”

It’s important to think this way outside of your career, too. If you’re buying a house, and the current owner won’t meet your price, are there extras she can throw in that would help bridge the gap? New appliances, repairs, etc. Think about how you can close this deal in a way that’s satisfactory to you.

4) Ask first.
Though it seems counter-intuitive, the person who asks first sets the price point for the entire negotiation. Think of it this way: in the exercise I referenced, the new hire could have asked for $20,000. Since my new hire started at $10,000, she automatically closed the door on anything from $10,000 – $20,000. She set the window of her negotiation at $0 – $10,000 by starting too low. Had she started at $30,000, I would have been desperately trying to get her “down” to $20,000.

Don’t close your window low, and don’t let your window be closed. Start first, and ask high to “anchor” the price point in your favor. It’s a tried and true technique that professional negotiators, corporations and everyday people use all the time. Don’t be afraid of it!

5) Concede.
Concessions are relationship builders. Always have an option you can afford to lose as part of your negotation points. For instance, if you really want a $10,000 bonus, and you ask for a $15,000 bonus plus two additional vacation days, conceding down to your desired $10,000 makes your company feel like they scored a “win” somewhere.

That said, don’t be outrageous about it. If you’re company’s freezing salaries, don’t go in and say “I need a 20 percent raise and I want to work Fridays from home.” Understand what’s reasonable and what’s not. Be sensitive to the company’s needs and the business/economic climate. You may need to wait a few months before making your move. Don’t propose something outrageous unless you’re really prepared to walk.

As you can tell, I felt really enriched by the workshop I attended. I’ve always been of the “work hard and you shall be rewarded” mindset. I probably have even resented people who do what they can to get ahead and bypass those who “really deserve” to get a promotion or raise. The challenge I have coming out of the workshop is to take greater control over the direction of my finances and my career, instead of always just waiting around for the next big thing.

Now I know you have to ask! And I’ll be more mindful and respectful of those who do ask to get ahead, because it’s definitely a necessary skill.

Do you have a story about negotiations to share? I’d love to hear how you learned about the importance of asking, or how you realized you had missed out on a big opportunity because you didn’t ask.

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