I’ve been pondering what I’d like my last post of the year to be about. Below are some ideas that crossed my mind

• Something that’ll prompt reflection about 2023 or action for 2024? 
• A personal anecdote? 
• A client aha moment?
• An uplifting story? 
• A cautionary tale?

I was definitely not thinking of discussing women and money. The reason? I’ve talked about women and money extensively since I started blogging. For example, I’ve discussed

• The UN findings about how women invest 90 percent of their income back into their families, compared with 35 percent for men. 
• How society profits from the unpaid work of women and how we could rethink it for a better tomorrow. 
• How salary increases are one of the ways my clients reap the benefits of my coaching and mentoring program.

Three factors made me decide to revisit yet again the topic before the end of the year

• Not long ago, a client — a woman in tech — shared that she was expecting a job offer from her dream employer — her first job outside academia. After telling her that I was “removing my coaching hat and putting my mentoring hat on” I exhorted her to negotiate her salary and offered my availability to provide feedback on the compensation package. Her reply clearly showed me that she wasn’t aware salaries were negotiable.
• Recently, I read the article from Ronke Babajide “The Sad Truth Is That the Bigger Your Pay Check, the Bigger the Pay Gap”. In the piece, she shares a personal story about how she was paid substantially less than her male counterparts. I was surprised by how many comments she got from women sharing similar heartbreaking stories. It also made me realise that when we talk about how gender influences salaries, often many things get conflated — for example, equal salary and the gender pay gap.
• Last but not least, this year Claudia Goldin was awarded the Nobel Prize in Economic Sciences for her work towards “the first comprehensive account of women’s earnings and labour market participation through the centuries. Her research reveals the causes of change, as well as the main sources of the remaining gender gap.”

In this article, I dispel some of the most damaging myths surrounding

• The impact of gender on workers’ salaries — including those about differences between how men and women approach salary discussions.
• How policies may help to bridge the gender pay gap
• The leverage available during salary negotiations

But first, let’s start with the personal reason I’m so invested in this topic.

My salary story

More than 20 years ago I negotiated my first salary. I could have done much better.

At the time, my future employer asked for my previous salary and offered exactly the same. Their bargaining chip was that they knew I was without a job and that it was obvious I was quite inexperienced in negotiating my compensation package. 

My gut feeling was that they were taking advantage of me but I didn’t have proof. I asked my friends for advice but none of them had much more experience than I did. Still, I negotiated a £3,000 increase, which I got. 

To make a long story short, a year later I learned that I was severely underpaid. That had three consequences

1. Feeling betrayed by the organisation, I decided to search for another job, which I landed about a year later.
2. As bonuses, promotions, and pension schemes depended on my salary, that initial negotiation mishap penalised my earnings — and retirement “pot” — for many years.
3. Given the pervasive practice of asking candidates for their previous salaries, several times it compromised any leverage I could have when negotiating a new role.

Myth #1: Equal pay is the same as the gender pay gap

Equal pay

Equal pay is being paid the same salary for the same work. The right to equal pay has been recognised by EU law since 1957. More precisely, Article 157 of the Treaty on the Functioning of the EU (TFEU) states

Each Member State shall ensure that the principle of equal pay for male and female workers for equal work or work of equal value is applied.

2.For the purpose of this Article, ‘pay’ means the ordinary basic or minimum wage or salary and any other consideration, whether in cash or in kind, which the worker receives directly or indirectly, in respect of his employment, from his employer.

Equal pay without discrimination based on sex means:

(a)that pay for the same work at piece rates shall be calculated on the basis of the same unit of measurement;

(b)that pay for work at time rates shall be the same for the same job.

Although the UK is not a member of the EU anymore, the Equal Pay Act 1970 established that 

(a)for men and women employed on like work the terms and conditions of one sex are not in any respect less favourable than those of the other; and

(b)for men and women employed on work rated as equivalent the terms and conditions of one sex are not less favourable than those of the other in any respect in which the terms and conditions of both are determined by the rating of their work.

It has since been repealed and replaced by the Equality Act 2010.

Sex equality rule

(1)If an occupational pension scheme does not include a sex equality rule, it is to be treated as including one.

(2)A sex equality rule is a provision that has the following effect — 

(a)if a relevant term is less favourable to A than it is to B, the term is modified so as not to be less favourable;

(b)if a term confers a relevant discretion capable of being exercised in a way that would be less favourable to A than to B, the term is modified so as to prevent the exercise of the discretion in that way.

Of course, that doesn’t mean that there are employers that break the law upfront — pay women less than men for the same work — or use subterfuges to pay them less. Two examples:

• In 2020, the Guardian reported that since the 2007–08 financial year, employment tribunals in England and Wales had received an average of almost 29,000 complaints a year. 

Across the whole period, equal pay claims made up 12% of all cases, which include other complaints such as unfair dismissal, discrimination, and unlawful deductions from pay. Equal pay claims made up 21% of all cases in 2017–18, 14% in 2018–19 and 14% in the first three quarters of 2019–20. 

• Shop floor Tesco staff, who are predominantly female, launched a claim in 2018 on the basis that “Tesco breached its duty under section 66 of the Equality Act 2010 to pay them equally to men in comparable roles, namely warehouse staff who are predominantly male. The claimants argue that they have been paid up to £3 an hour less than a warehouse and distribution centre staff.” Through the years, several similar claims at other UK supermarkets including Asda, Sainsbury’s Morrisons, and the Co-op have been working their way through the courts.

In the US, the Equal Pay Act of 1963 protects against wage discrimination based on sex. However, as in Europe, that doesn’t mean that discrimination is eradicated. For example “By 1969, the median salary for female computer specialists was $7,763. In contrast, men earned a median of $11,193 as computer specialists and $13,149 as engineers.”

Gender pay gap

The gender pay gap measures the difference in the average hourly wage of all men and women in work. Unlike unequal gender pay, the gender gap pay is not unlawful although countries such as the UK have regulations and laws making its reporting recommended or even mandatory.

In 2016, the Women and Equalities Committee published a report outlining some of the main causes of the gender pay gap:

• The part-time pay penalty — Women are more likely to work part-time, and part-time workers are paid less. 
• Occupation segregation — Women tend to work in lower-paid occupations and sectors.

I’ll add two more:

• Women are assessed on performance and men on potential. As a result, they are seen as less “promotable material”.
• Managers holding “benevolent sexism” beliefs may block women’s professional progression under the premise that they are “protecting” them. For example, not offering a more senior role that involves traveling to a woman with small children under the assumption that she won’t be interested.

Finally, it’s very important to highlight that the gender pay gap is an intersectional issue. 

• As this report from the Fawcett Society showed, the ethnic gender pay gap is extremely complex. For example, it can range from a reversed gender pay gap of -5.6% for Chinese women in Great Britain to 19.6% for Black African women.
• The UK Trades Union Congress published a new analysis in November showing that non-disabled men are paid on average 30% more than disabled women.

Myth #2: Transparency in salaries will eliminate the gender pay gap

I’ve been an advocate of salary transparency since in 2018 I attended a talk by Åsa Nyström, Director of Customer Advocacy at Buffer. She discussed Buffer’s value of “Default to Transparency” which consisted of sharing via their website all their employees’ salaries as well as the formula used to calculate them. 

The benefits of salary transparency are multiple

• For companies— It increases performance as it promotes trust between employees and employers. A study showed that people at high-trust companies report 74% less stress, 106% more energy at work, 50% higher productivity, 13% fewer sick days, 76% more engagement, 29% more satisfaction with their lives, and 40% less burnout.
• For women —  Research has shown that women are more prone to negotiate the compensation package when the job description includes the salary ranges.
• For governments – Salary transparency makes it less likely for unequal pay to occur, increase wages among women and other low-power groups which in turn will reduce their demands for state benefits.

However, it’s not the magic bullet for the gender pay gap. We need to remember that the gender pay gap is about career progression and gendered careers, so transparency won’t eliminate entrenched conscious and unconscious biases.

Still, transparency is a step in the right direction and there is some good news to celebrate. 

A new EU pay transparency directive, adopted in April 2023, will “ help workers or jobseekers better understand their position in the wider pay structure of a company or industry. It also includes collective measures to ensure employers share aggregated pay data broken down by gender, both internally and publicly.” 

Some of its key points are:

• The right for workers to obtain pay information about other workers doing equal work from an employer. 
• During recruitment, job candidates also have a right to be informed about the pay levels they can expect at the position they are applying for.
• Candidates have the right not to be asked about their pay history. 
• Organisations with more than 100 employees will have to publish their gender gaps regarding total pay and variable pay (such as bonuses), including their internal gender pay gap by job category. 

Myth #3: Women earn less because they don’t negotiate

Year after year, I keep hearing that the gender pay gap is due to women not asking for raises or underselling their skills.

Whilst some women may indeed be reluctant to negotiate, either because they don’t know that salaries are negotiable or they don’t know how to negotiate them, there are also other four important reasons: 

1. Many women are actively discouraged by their entourage to have salary negotiations. Over and over, women tell me that they’ve been advised by their mentors and network to “not rock the boat”.
2. Some studies show that when women negotiate their salaries, they receive backlash: They are seen as greedy whilst men who do the same are deemed assertive. Women know that they need to be perceived as “likable” so they don’t negotiate.
3. Society tells women how important is their work as family “pillars”. But does society monetarily recognize the kind of work women typically perform in that role — household chores, breastfeeding, child rearing, family caregiving? No. Hence, we’re used to our work being simultaneously praised and not recognized monetarily.
4. Women have been trained by society that our judgment is not trustworthy and that we need external validation before making decisions. Hence, we’re expected to talk ourselves out of our gut feeling that we’re underpaid and trust the organisations we work for about the monetary value of our work.

Finally, some studies show that women are more likely to negotiate salaries than men. However, while women are more likely to ask for higher salaries, men still receive greater compensation.

Myth #4: I will negotiate my salary once I prove my value to the organisation

You’ll never be in a better position to negotiate your salary than when you join an organisation. Please don’t count on being able to renegotiate your salary later on or at the next promotion — it’s extremely unlikely you have that leverage.

Moreover, by not negotiating your salary, you risk

• Feeling regret when thinking about how much you could have asked for.
• Fostering resentment against the organisation — if you learn others with similar background and skills are been paid more.

Myth #5: I may lose the job offer if I negotiate the salary

Scoop: You’re expected to negotiate your compensation package. So do it!

Worst case scenario? You get what you got offered in the first place but at least you know you reached the maximum that was on the table.

And if you don’t know how much you should negotiate for, ask mentors, sponsors, professional communities, and friends. 

Myth #6: I need to be mindful of the ongoing economic situation and settle for less

If you still feel reluctant to negotiate your salary, think about your future self. 

For example, an increase of £2,000 in 2024 will translate into £40,000 in 20 years. Moreover, promotions, bonuses, and contributions to your pension scheme are typically calculated as a percentage of your salary, so they’ll increase as your base salary increases.

In summary, those £2,000 will be the gift that keeps on giving!

Call to action

I have two asks for you

1. Set a salary increase goal for 2024.
2. Share this article with a woman who will benefit from negotiating her salary in 2024.

Happy New Year!

Upwards & Onwards: The Career Breakthrough Gift You Deserve in 2024

Last Friday, I received an email from a super-smart and ambitious woman that joined my personalised program “Upwards & Onwards”.

This is a 3-month coaching and mentoring package where I work 1:1 with clients to

• Examine where they are in their careers.
• Decide on their next bold professional move and ensure that it integrates into the lifestyle they want for themselves.
• Identify the gaps between where they are and where they want to be.
• Create a plan.
• Implement the plan.

When we started the program, this client had been blocked in her career progression for some years and the gap between her situation and the career she dreamed for herself appeared to be insurmountable.

Forwards to last week: In her email, she told me she just accepted a job offer that epitomised the role of her dreams! To her credit, she embraced coaching and mentoring and consistently followed up with the plan.

Through this program, others have succeeded in getting

• Both a promotion and salary increase during maternity leave.
• An internal promotion.
• A more senior job in another organisation.
• A substantial salary increase.

QUESTION: Are you ready to get the career you deserve? Click on this link to purchase the “Upwards & Onwards” program for £850.00.

NOTE: From January 2nd 2024, I’ll raise the price to £970.00. This price change is a reflection of my commitment to keeping the program affordable whilst making my business sustainable financially.
 
Click on this link to purchase the “Upwards & Onwards” program for £850.00.

QUESTIONS? Book a free call.

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