Importance of salary negotiation in the United States

By Julia Fullick-Jagiela, associate professor and chair of management, and Kiku Jones, professor and chair of business analytics and information systems October 06, 2023

Julia Fullick-Jagiela and Kiku Jones on the Quad

Before we can begin discussing salary negotiation for women, we must emphasize that the solution to pay equity is not “fixing women”, rather it is real systemic change.

Organizations need to make pay equity a priority. To begin to rectify the disparities between gender and race, companies should conduct pay audits to determine where those disparities are, increase transparency in their pay practices and establish standard guidelines. In addition, organizations should encourage employees at all levels to negotiate salary and promotion.

Women are often also caregivers. The lack of both affordable childcare and federally mandated paid leave has left many women in a position to have to leave their jobs and start over or take lower paying positions (Women in the Workplace , 2022).

Women are getting passed over for promotions by their male counterparts (Somers, 2022). It's important to understand gender pay gaps, we also need to look at the data intersectionally. Women of color have been experiencing even higher pay gaps and less promotions compared to white women. Black and Latina women made 64 cents and 57 cents on the dollar compared to their white male counterparts (AAUW, 2022).

Salary negotiation is one way that women can express their value during the hiring or promotion process. The following steps from AAUW’s Work Smart Salary Negotiation free online course can be employed to help women during the process. The first step is to know your value.

Identify accomplishments tied to your skills and the specific benefits the organization received based on those accomplishments. The second step is to research the position and know what the target salary and benefits are. Define your walkaway point. Third, know your strategy. Try to anticipate questions and reactions from your employer. Don’t get personal. Remain positive and flexible. Finally, practice with someone who can provide you with feedback.

Educating minoritized groups on how to negotiate salaries and benefits is essential in making sure they know their rights and what they can ask for and how to describe their value in a way that employers listen. However, this education is only one part of the pay disparity puzzle and requires organizations to make real structural changes.

Fixing broken systems is essential. Pay transparency laws are increasing at the state level but need to be passed at the federal level. As an example of their impact, Baker et al. (2023) found that pay transparency laws reduced the gender pay gap 20–40 percent for university faculty salaries in Canada.

Organizations are responsible for addressing current inequities in their compensation systems. The lack of both affordable childcare and federally mandated paid leave contribute to wage gaps (Galvin, 2017).

Who gets tapped for leadership roles, promotions, asked to sit on boards, who gets to negotiate salary and benefits versus who is penalized for asking, who has the bulk of caregiving and domestic responsibilities, those are all things that need to be addressed if we are going to ever achieve gender parity in the US.

Kiku Jones, Professor and Chair of Business Analytics & Information Systems, is focused on building empowered student leaders equipped both professionally and personally. She promotes diversity and inclusion in the classroom and challenges her students to become leaders on campus and in the community. Her primary areas of teaching include agile methodologies and data analysis.

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