How to Negotiate Pay
Meditations on tech across generations
Dear Daughter,
As a professional negotiator and a certified mediator, I love the nexus between “no” and “well, maybe, if.” My professional identity is attached to finding effective ways to resolve conflict and satisfy competing concerns in contentious situations.
So it is difficult to confess that I have always been a terrible negotiator when it comes to my own compensation.
When you were two, I interviewed to move to a corporate legal department. I was offered 40 percent less than the base salary I was making at my law firm, even excluding my annual bonus. The company’s mission was compelling, and I was excited at the prospect of a steady flow of deal work. Conventional wisdom was that in-house lawyers had an easier time meeting the competing demands of babies and work. Location was also a factor, because it was getting complicated to have kids and a career in LA; in Minneapolis, you could attend a public neighborhood school.
In the interview process, my entire focus was on how much I wanted all those benefits, and not on what the company would be getting in return. I told myself there was a natural pay gap between an in-house position and a large law firm, and between LA and the Minneapolis pay scale.
The company used a leading New York law firm as outside counsel. I had equivalent skills to those outside lawyers, and would be displacing outside law firm hours at an 80 percent savings from the law firm rate. This would have justified at least maintaining my previous salary. I never thought to bring this up.
It took me a long time to dig out from the hole I created by not negotiating that first corporate compensation package. Studies show that women who don’t negotiate their first salaries can end up costing themselves a half a million dollars over the course of their career.
When I became General Counsel, I took less pay than my departing boss. I was so excited to take on a senior executive role when I was offered the job, I didn’t even ask what the compensation would look like. When I left the General Counsel role, the guy who followed me immediately was paid significantly more. My predecessor and successor were both good friends, and they both pointed out the dynamic to me.
It took some external events to raise my salary up to a minimally acceptable level, from a market perspective. The chief salary dynamics in my favor involved my number-two guy (the one who eventually succeeded me). He would push for raises and legitimate recognition of his contribution. As a by-product, the CEO would acknowledge that I too was making a big contribution and needed to be at a pay grade at least nominally above his.
What was going on with me, given my professional skills, that I accepted this dynamic without seeking to change it through negotiation?
I let the CEO off the hook, telling myself I was fortunate to get the promotion, and not focusing on the inequities. I was relatively young, I told myself, and I shouldn’t press my luck. Of course, if I was qualified for the General Counsel role, age should not have been a controlling factor in setting compensation.
Studies have shown that women are unlikely to advocate for themselves in salary negotiations. In the famous study reported in Babcock’s “Women Don’t Ask,” the results revealed that only around 7 percent of women attempted to negotiate their first salary, while 57 percent of men did. Those who negotiated increased their starting salary by 7 percent.
There are lots of explanations and societal reasons women don’t negotiate their compensation. The chief external factor I have observed is that women must be mindful of being labeled “aggressive.” This occurs under a double standard where similar conduct by a man would be viewed as strong and assertive. Studies indicate that even though women will passionately crusade for the group’s mission, we don’t like to risk any conflict on our own behalf.
And we women tend to love our work, and in my case making more money did not serve as the measure of my self-worth. But love of the game is not a reason not to get paid if you are a star. If it were, hockey players wouldn’t hire agents — in fact, they would probably play for free — and musicians wouldn’t have unions to protect them against their instinct to accept every gig for the sheer joy of the group experience.
Here is what I wish I would’ve known and done, versus what I did. The following advice applies whether you are interviewing to change companies, or seeking an increase in compensation at your current company.
Hire Yourself as Your Agent.
Plenty of women are highly effective negotiators when they are representing interests other than their own. So, my first suggestion is to hire yourself as your agent. In an interview, you are both persuading the company to hire you, and evaluating and advocating for fair compensation. The company is both evaluating you and recruiting you. These roles can get tangled up. You can mentally separate them into your the role as interviewee who is convincing the company to hire her as talent, from your role as the agent representing the talent in the compensation negotiation. Your talent deserves a great agent.
Ideally, there would be a bright line between these roles. You would first get the job offer and then mentally turn the negotiation over to yourself as agent. While this often isn’t exactly how things play out, the talent and agent roles can be played when they come up within the interview process.
As agent, you will prepare fully for the salary and benefits discussion. You will research the market, find out what you can about the company’s hiring practices and compensation structure, understand your client’s tradeoffs: how she values base, bonus, and other benefits, such as paid time off, flexible hours, 401(k), company-paid technology and phone, and others. You will know how much clarity she needs in terms of the job description and the ability to take on extra assignments as part of her development. You will learn about the company’s efforts to help employees develop. You will get a sense for whether employees are treated as assets to be developed versus expenses to be minimized.
You will practice and think of the possible scenarios that could come up. You will role-play with roommates or anyone you can corner.
Upon your client receiving an offer, the agent shifts the conversation from sell mode to buy mode. The agent, having prepared a strategy and practiced, will have theories about how the negotiation might unfold. She will review all your qualifications and be able to pitch how you cover the job description. She will be able to discuss key differences between your current job and the new job. In salary discussions, she will be able to continue to frame the discussion not around your previous salary, but what market data reflects. If you are looking for a big pay and responsibility increase, she will be positioned, by having your current job description and another description of what you actually do, which offers more value added. She will be versed in the three to five reasons you deserve a raise where you are.
Tactically, she will ask for more compensation than your target. She will advocate why you belong at the top of any range that is serving as a point of reference. She will have a precise number that is your goal, which is not a round number but reflects some math based on underlying comparables.
She will be ready to make a counter-offer in a low-key manner. Striking a balance is difficult, and the only time an ultimatum is appropriate is if you have determined that you will truly walk away if your requirement is not met. A low-key counter includes communicating why the job is exciting to you, and is framed in terms of the value you believe you offer to the mission.
Your Agent Needs to Put on Her Game Face.
Your agent will need to get over the idea that negotiating will anger the company, or that it’s rude to ask for what her client deserves. Remember that “no” is not personal, and, in fact, “no” is the beginning, not the end, of a negotiation. If you got a “yes,” you would have no need to negotiate.
A good game face includes holding your head high, taking up your real estate in the room, having positive body language and verbal tone, and giving off a collaborative vibe.
This may all take a lot of practice. As cheesy as it seems, look yourself in the mirror. Smile. Practice saying the number.
By the way, I asked my male co-founder his advice. He said to pick the highest number you can say with a straight face, double it, and then practice from there. See, we are still not being egregious here. My partner only follows his own advice when he is in a fairly secure position, and either has an attractive “Plan B” or is reasonably certain the other side will counter.
Never lie about your current compensation. Your agent will have a great answer for why replicating your current pay would not be appropriate. She will rehearse and be fluent in the factual ways your current comp didn’t reflect your full responsibilities, wasn’t reviewed when it should have been, or doesn’t reflect what you now know about the marketplace. She also can say, in your case, that since you graduated during the great recession, that caused a big damper on salaries because no one felt confident to ask for fair compensation. She can say that you had several coveted internships that didn’t pay much, but greatly augmented what your college degree taught you. She can say that now, that investment, being similar to an advanced degree, should start paying off.
In terms of negotiating a raise, much of the same advice applies. You and your agent need to put together a performance review, including a bullet point list documenting achievements, and showing that you took on new responsibilities and exceeded expectations. Do this all proactively, before your annual performance review, and get it in front of your boss, because you need to get your raise figured into the department budget for the coming year. If you haven’t had an increase for a year, it’s time to have this conversation.
Have an “And” Conversation
One reason that is cited for women not advocating for their own compensation is that they don’t want to cause friction with their boss or other people they value. This trait is a good one when you are talking about needless and destructive personal conflict, but avoiding conflict is not in either party’s interest when you are giving constructive information about your need to be compensated fairly, and treated fairly.
If you and your agent are still having trouble with this, here is my suggestion: Have an “and” conversation. First, listen actively. In this stage, don’t be mentally rehearsing what you are going to say in response. Ask questions that help you understand your boss’s needs, hopes, desires, preferences, and constraints. You will use all of this to frame your response, which affirms, and does not discount, the information imparted by your boss. Instead, you will recount back what you heard. And you will do this in a non-gimmicky, sincere, and empathetic manner.
You can now lay out your requests, which will hopefully spur discussion. You can wrap up by saying, “It sounds to me like your goals are a, b, and c. And, at the same time, my goals are a, d, and e. It seems like we can achieve a, and based upon what you just told me, it doesn’t seem impossible for both of us, working together, to bridge b and c with d and e. The key here is that it doesn’t matter what the content was, as long as you heard the hiring person and also put all of your hopes and concerns on the table, without apology.
This puts you in the same boat, with a common problem, and creates a situation where you can row together toward a solution, rather than defending your respective positions in an adverse posture. You (and your agent) will need to be very centered to do this, and in a true state of seeking to understand the problem and opportunity set of your boss or the hiring person. You will not be perfect, but getting a “C” in your first salary negotiation beats the alternative of not having tried.
If, in the negotiation, you find you or the counterparty are surprised or caught off guard, note that. “It seems like my question took you by surprise. Maybe we should just note it and take it up after you have had time to consider it.” Or, “tell me more, how can I help move this outcome in my direction?” Or “would it work if we reduced overall vacation days but allowed me to work those days from home, which I probably would be doing anyway, no matter what we call them?”Or “this is a lot to take in, I think I have what I need to think about this further. Could we regroup this afternoon?”
In this “and” frame, you can ask the interviewer for advice. You can politely re-frame things not as “either — ors” but puzzles to be pondered together. You don’t have to be defensive, because you are not approaching the situation as if your boss or the hiring person’s goals obliterate yours. This is the key to a win/win stance.
You can also stop, and ponder something that the counterparty said, either in silence or by noting you hadn’t thought of the factor they raised. Silence is a very effective part of a negotiating vocabulary. Taking notes is also a powerful tool to take time and truly process what the hiring person is saying.
It’s critical for bosses to cultivate the “and” conversation, especially in this important context of compensation. Because of the strong link between work and identity, it’s emotional for every employee to broach and follow through on a request for a raise. It takes time and energy from the leader to address the issue in a manner where the employee is satisfied, or at least knows they were heard and understood.
It’s also emotional for the boss to be approached for a raise. I had one very senior executive who truly deserved more base compensation than he was receiving. There was no source from which to offer additional pay. He was a long-distance commuter, coming to our Midwestern office during the middle of each week from the east coast. By raising his overall requests constructively, with sensitivity to my constraints, he initiated the “and” conversation. Rowing in the same direction, we were able to identify that he would value, almost as much as the raise, the right to travel a few less times per month to the office. We addressed my concerns about the virtual commute, with him taking on the burden to overcome my and the team’s concerns that we wouldn’t have enough time together. We took the savings from fewer trips and allowed him more travel comforts as part of the package. This exec was someone I considered and still consider a friend, which only made the subject more emotional and potentially fraught for both of us. In my case, I prize compensating my team fairly, so not being able to give this key team member what he wanted struck at my identity. Acknowledge the emotions and then move past them.
If you are apart in the things you need, you don’t need to solve the puzzle right in the room. You can say, “I heard a lot of important things here and to do them justice I want to go digest them. In addition, you mentioned that you would look into x, y, and z and get back to me. Can we circle back at the end of the day?
Backing up even more, you can go into a first conversation about compensation and start with “I am not sure where this discussion will end up, but I would like to learn about your needs and wishes, so that I can make sure what I propose is a win for you. After I digest what I learn here, I would like to come back to you.” That may be the best marker you can mentally put down, that will make you comfortable that by listening and understanding, you are not necessarily agreeing with what your boss or interviewer is saying.
Additionally, in the context of just having received a job offer, this will give you time to recover from all of the emotion that interviewing and being offered the job evoke. No one is on an even keel at that moment, so it’s a natural place to take a pause. You may say how excited you are, and at the same time explore your questions without committing to a position yourself.
None of this is easy. But by doing your best, I believe you demonstrate to your future boss that you are working toward becoming a “professional human being” — one who is self aware, can listen without being threatened, and can problem-solve in a group setting. I love Steven Covey’s definition of “maturity,” which is balancing courage with compassion. A mature approach will allow you to see where continuing to press for a raise or additional compensation is not right for you and the company. This outcome is not a failure, and it plants the seed with your boss to be looking for ways to bring your compensation up when the situation is right.
In the long run, healthy cultures need to have equitable pay arrangements. This dynamic should be addressed not just by the women in the organization, but by all of leadership. While pay might not be what primarily motivates women, it can serve as a powerful de-motivator. Parity in pay is a cultural hygiene issue.
Your company needs to meet you halfway with careful and intentional compensation strategies. The most team-oriented players, and those with personal humility that may disincline them to ask for fair compensation, are the company’s future leaders. They are to be cherished and rewarded.
The studies about why there is a pay gap are, of course, generalizations, painted with a very broad brush. At the granular level, everything is much more complex and nuanced. These generalizations tend to paint women as exhibiting personal humility in service to the mission — that has merit too, and makes women prized players. If you are a leader with compensation strategy responsibilities, your approach should consciously value these traits. If the studies are right, then men should strive to be more like women at work.
