Your Company Bias
We’ve established that white men will negotiate for higher salaries. We’ve shown that white men are, in fact, paid higher salaries than women and African Americans.
So be honest with me — does your company expect new hires to negotiate their compensation? From what we’ve learned above, do you still think it’s the right thing to do?
If you believe in gender and racial equity, that behavior is plain wrong.
There are five major problems inherent in companies that expect salary negotiations.
1. It’s sexist
Men are more likely to negotiate higher salaries than women. Boom – you now have a gender pay gap. You proud of that?
2. It’s racist
Throughout modern history, racial bias has historically led to African Americans getting paid less than white people for the same job. African American women? Well, they are screwed.
3. It’s socioeconomically biased
Wealthy people tend to negotiate higher salaries than poor people – even when going after the same job.
4. It penalizes the less aggressive
Not everybody feels comfortable negotiating. Remember my mother up at the top of this story? She’s really smart and is an accomplished businesswoman. Why should she make less than someone not as skilled simply because she doesn’t like to negotiate?
5. It lacks transparency and integrity
If you’re paying different people different amounts for the same job, despite no difference in their tenure or abilities, you are screwing somebody over and they probably know it.
The Salary Negotiation Solution(s)
When I’ve had this discussion with other people, quite a few have had the fervent point of view that negotiation is expected.
“If people don’t negotiate well,” I was told by a group of others. “It’s their fault. They just need to learn how to be better negotiators.”
You know what, I bet the people who are claiming that everybody should be a better negotiator are the people who are already good negotiators. Isn’t it always the wealthy who preach about the meaninglessness of wealth?
Here’s what it all comes down to – there are two different tactics that can be taken in order to solve the pay discrepancy dilemma:
- Fix the people
- Fix the institutions
The “Fix The People” Solution
The “Fix the People” approach to eliminating salary disrepancies follows the belief that everybody should just become a better negotiator. It’s a bit Darwinian in its thesis, a little “survival of the fittest negotiator” vibe.
If you believe in the “Fix The People” approach, I suppose you consider salary discrepancies to be OK. If a less experienced person gets a higher salary than the more experienced, well, that more experienced person just needs to learn better negotiation skills.
Unfortunately, this is a naive way to view the solution. It’s not fair and it won’t work.
Look at my mother, and the 40% of working adults who say they don’t like and aren’t good at negotiating. They aren’t all of a sudden going to change. Why should they be paid less than somebody who is potentially less qualified? Why should they be paid less simply because somebody else likes negotiating?
We don’t have to live in a Zero Sum world.
The “Fix The Institution” Solution
The other solution is to fix the process of hiring.
There is one solution that is guaranteed to fully expose and remove the biases of salary negotiation: radical salary transparency.
Radical salary transparency is about being upfront with salaries. It means openly displaying salary ranges on job descriptions. It means letting colleagues know each other’s salaries and the reasons why one is paid a different amount than another.
Radical transparency can be tough for leaders. It requires more thought and more work than just being inconsistent with salaries. It requires turning away from someone you really want to hire because they refuse the offered salary.
Yes, it is tough. But you can do tough things.
In fact, all you need to do is look at the government in Finland for inspiration.
They got so frustrated with gender pay gaps that they, the Finnish national government, decided on radical transparency. They post every single worker’s salary for the public to see. Want to know how much your colleagues are being paid? It’s right there on the Internet to find.
As it turns out, some states in the US are moving closer to this type of Fix The Institutions transparency.
California already passed a law requiring salary ranges to be displayed on every job description and New York passed the same thing.
It’s a start. A good start. Just not the entire solution.
It’s going to have to rely on you (yes, you) and how you handle the hiring process at your company.
Tell me, what are you going to do now?
Are you ready to embrace radical salary transparency?
Don’t leave my mother in the dust.