Is Salary Negotiation B.S.?
Is Salary Negotiation B.S.?
Why does our livelihood depend on this ability?
I’m hosting a one-day workshop (Sunday, September 22nd) at The Well in NYC with my dear friend Lauren Roxburgh, fascia and alignment expert (our podcast episode here)—it’s intimate (only 25 people). We’re calling it, “Feel It to Heal It: Alchemizing Toxic Anger and Fear into Compassion” and we’re focusing on accessing those emotions we’re quick to label “bad” and stuff into our bodies. We’ll talk a bit, Lauren will move us through a series of flows, and we’ll eat…likely in that order. A big thank you to Beyond Yoga for making this happen. Come join us!
When I was in Australia, I had the chance to see some new, old-feeling friends like Alice Zazlavsky (radio host, food educator, author of award-winning books like Better Cooking and In Praise of Veg) and Sarah Grynberg, host of the excellent podcast Life of Greatness. Sarah has similar taste in guests to me so if you like my show, you’ll also like hers.
Sarah put together an evening for me with about 25 Melbourne women to discuss On Our Best Behavior. Before we kicked off the Q&A, we asked everyone to describe one “story” that they feel attached to, or has otherwise defined their lives. (For context, the three stories I’ve been working with recently are: 1. “I’m the only one who can do it right, so I should do it all.” (SLOTH); 2. “If I accept payment from someone, then they own me.” (GREED); 3. “If I draw too much attention to myself, I’ll be destroyed.” (PRIDE).) There were a lot of overlapping stories in the room—including some shared by mothers and daughters—though nothing I heard surprised me. It mostly aligns with what I hear in the states as well: Stories about hypervigilance, burn-out, not having “enough,” fear of loss of control, and fear of loss of approval.
Many of the women in the room either ran their own businesses or were high up in org charts and Sarah eventually turned the conversation to part of the chapter on GREED, where I write about the double-bind for women and negotiation. The research suggests women are excellent, if not superior, negotiators when it comes to standing for the needs of other people—we listen, we sit in silence, we empathize, we feel into situations. But, we struggle to negotiate on behalf of ourselves. This is one of those cultural debates that drives me a little crazy, particularly when women are shamed for this deficit or blamed for chasms in our own compensation: Just negotiate harder! Because let’s be real. We don’t like women who are assertive or aggressive or perceived as selfish in any way. We punish them. So sure, women can use their skills to negotiate hard on their own behalf, but there’s plenty of research to suggest that this might come right back in your face.
In On Our Best Behavior I write a bit about how transparent compensation has to be the way of the future—everyone’s salary package should be defensible, because there should be nothing to hide, right? I also made the point that throughout my career, I’ve been exposed to three clerical errors where someone accidentally sent me someone else’s comp package—heartbreak ensued as I realized I was being paid significantly less, followed by anger and resentment that was hard to shed.
But transparency is not the norm, unfortunately, in part because I’m guessing defendable compensation is not the norm either. Some people are far better negotiators and their packages reflect that, even if they prove to be disappointments once they’re operating in the job.
This leads me to a question, which I asked that night with Sarah: “Why and when did negotiation become the de facto way to determine your compensation and therefore your value in the market?" Why is it this way? And why do we so easily accept it? (Anyone in this audience know?)
On a practical level, I totally get it: You have to attract talent. People have variable experience. Some peoples’ skill-sets are highly prized and scarce. And so on and so forth. BUT, by letting employees self-determine in this way, you create a lot of inequity—and an opportunity for employees to learn about said inequity, particularly as people become more willing to talk about money. This last factor is critical for women, as we’ve been socialized to believe that it’s base and wrong to talk about money, that money is not “for us,” that we’re bad with money, etc…and as we push to erode that social norm and share information about compensation in the same way that men do, more of us will come face-to-face with the reality of our own pay gaps. This won’t work out for employers. Even for outlier employees—those with scarce skill sets in competitive markets—a healthy organization should be able to explain the rationale for their heightened compensation. And ideally, use their outlying compensation as a reason to raise everyone else—after all, they’re establishing the market.
Besides gender, there are other factors that make negotiation-based compensation unfair—or undesirable. One, people who are good at creating leverage—i.e. seeking other employment opportunities to use against their current employer, or hopping around every two years or so, end up making more…which definitely works against people who are loyal soldiers and reliant on their employer to proactively see and reward their value. (Unless, see above, this raises the market for everyone else.) Two, people who have greater facility with numbers and/or business acumen are going to win, creating disparities within organizations where the creative functions typically lose, big-time. This is a sore spot, as I think it’s easy enough to acknowledge that in many industries, creatives often generate the value on which the business ultimately scales. To be paid less is a breeding ground for resentment—and to be honest, it can feel parasitic. Case in point, anyone who has worked in traditional media knows this dynamic intimately: In magazines, those on the editorial side (writers, designers, editors) earned peanuts (starting salary: 22K), while those on the publishing side (sales team, marketers, etc.) who sold ads against the editorial team’s work, made significant money. This was the way it was and we had little recourse except to accept it.
But there have to be better ways—and my guess is that the future will require it. We’ve already seen the shift for creatives, who now function as both editor and publisher (a la this newsletter that you’re reading on Substack)—you could argue that the creative economy has slowly been putting traditional media out of business. Few of my creative friends will even contemplate going in-house these days, as it’s often way, way, way more remunerative to work for yourself and monetize your own output. Bringing people in-house now requires appropriately compensating functions that have long been under-valued.
The future of work will require both transparency and balance in compensation in order to assure all employees that their pay—and their colleagues’ pay—is appropriate and balanced.
About a decade ago, I almost took a job at one of the most valuable companies in the world. It was an exciting opportunity at a world-class operator, but there were hurdles. Namely, we would have needed to move to San Francisco and I was pregnant with my second kid. I was reasonable happy at my job, and we loved Vicky (our nanny), our house, our neighborhood, and Max’s preschool. But I went all the way to the end of the process because I recognized I might not get a similar chance. Ultimately, we couldn’t get there on the money—and not because this company didn’t have the coffers. At the organizational level at which the job was scoped, I was simply too expensive—they had hardcore salary bands to which they were devoted. If they bent the rules for me, they’d (appropriately) need to adjust the rest of the team—which would potentially have implications for other teams as well. They couldn’t re-scope my job at a higher organizational level either without setting off a stream of dominoes in the other direction (the person I would be reporting to was one level above me, so that person would then need to be promoted, etc.). We found ourselves at an impasse.
Rob and I talked a lot about short-term payoffs for potential long-term gains, but I walked away—though the experience only raised the company in my esteem. While it didn’t meet my needs, it felt considered, fair, and in integrity—and respectful and responsive to the whole. I have to believe that this company’s restraint and attunement to keeping the entire organization balanced is one of the reasons they’re so successful, even if it doesn’t work for everyone they try to hire.
I think this is arguably why people like me—those with spiky, highly specific experience—do best outside of corporate structures, and by extension, why most consultants are brought in short-term to help solve long-term problems. We don’t quite fit, and trying to make us fit might break the organization. While there are definitely trade-offs to a freelance life, being able to set my own rates and rules makes these trade-offs worth it—and the entire engagement feel like a clean transaction. One of the psychological hurdles for me back in the day when it came to negotiating for pay raises or higher comps was my reputation as a “good,” selfless woman, in part because I worried that by asking for more, someone would get less—I continue to be very trained to be very concerned about scarcity. (I’m working on it!) Being on a different line item of the budget resolves some of this anxiety for me.
I interviewed Tara Mohr, author of Playing Big for the podcast last week (episode is here)—and if this newsletter resonates, that conversation will hit. One of her big concerns in her coaching practice is that high-level women in corporations who can afford to quit are abandoning ship in droves—for some of the reasons discussed above. Businesses suffer, and cultures suffer, when women don’t stick around—solving for comp negotiation to become a relic of the past in most situations might encourage more women to stay. If you feel like negotiation is an important factor and needs to stay, and that compensation needs to remain opaque, can you tell me why in the comments below? (Legitimately curious.) The only upside I can come up with is that it might establish new standards and a new value in the market for the entire team.
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I worked for a company that promised salary transparency but never followed through, citing reasons about software delays etc. It was incredibly frustrating because I knew through the grapevine that I was getting paid less than my male counterparts and I was hoping that transparency would lead to more equality.
The one good reason I heard against salary transparency was from a friend at the same company who was managing a global team. Salaries varied greatly across Europe, Asia and the US. In particular, the team based in Barcelona was very upset about the (significant) difference between their salaries and those of their counterparts in San Francisco. It puts the manager in an uncomfortable position of having to explain that it’s two separate labor markets with very different pay scales. Cost of living is a lot lower in Barcelona plus there’s not the expectation that your salary is not just enough to live on but also your emergency savings, healthcare, retirement. There’s also the even more uncomfortable truth that the team in SF worked a lot harder than the team in Barcelona - fewer holidays & vacations but also more hours per day, higher output. It’s a lot to ask a manager to discuss and defend some of those large cultural differences.
Interestingly I’ve also had a few friends recently leave San Francisco tech jobs for positions in London & Stockholm. They go in with open eyes that they are going to be taking a hit to their compensation but are willing to make the tradeoff for greater quality of life - lower cost of living, more vacation, lower intensity, lower stress.
There seem to be two different but related issues here: negotiation and disclosure. Ultimately, I don't think you can avoid negotiation; there is no objective way to determine a fair salary or a fair price - it's always going to come down to what somebody is willing to pay and somebody else is willing to accept. But without disclosure, you are negotiating blind. Employers know how much they are paying everyone else, and often what the rates are in the industry - most workers, though, don't, and that puts them at a huge disadvantage.