Pragmatic Solutions to Achieve Pay Equity
My first podcast with one of my clients, Lauren Hasson. Lauren is now the founder of DevelopHer, a a career development platform for tech women by tech women. A few years back, she was an Equal Pay Negotiations client and in two years tripled her income negotiating a pay adjustment and starting salaries. Also, listen to my thoughts on the push for Mark Wahlberg to donate his pay when his co-star Michelle Williams was short changed.
Catching You UpIf you missed last week’s blog post then you did not get the chance to meet Allison Behringer, her podcast called The Intern, the pay raise negotiation she had with her boss, James, and my first four recommendations to get a more equitable raise. This week I share my final four (could the NCAA come after me for using that term?) recommendations for Allison and you, the readers.
At one point in the negotiation, James states he remembers Allison said she was “living large” with her current pay. Gleaned from the podcast, Allison came from working at a non-profit for $14,000. She has more than tripled her income in this one move. I worked for $14,200 in my second year of full-time work in 1986. I can only imagine the relief of actually earning money that sounds like 21st century income instead of money Alex P. Keating would have made fun of.
Allison also seems to be responsible for her own financial security and no one else’s financial security. No spouse, ill parent, children, or other dependents. Had she three children, she probably would not have ever said “living large.” More importantly, should the pay for a job change based on the personal situation of the individual? Does this mean that all childless individuals should always earn less than parents? Should single people earn less than married people? Such logic has nothing to do with the value of the job.
My Advice to Allison: Agree that you made that statement which she did. Then state, “that may be true compared to my work at a non-profit but that has absolutely nothing to do with the value of the job. I’m here looking for the appropriate title and pay for the job that I am doing, podcast producer and talent. An off the cuff comment does not negate that I am not earning the market value of the job.”
For the most part, Allison is talking with the wrong people. She chats with Maya, her go-to person at work. Maya is in Human Resources (HR) and Allison’s thinks, “so if anyone knows about negotiation and what’s a reasonable salary ask at this company, it’s her.” What Allison is forgetting is that Maya ‘s job is to help the company get the best talent for the least pay. It’s her fiduciary responsibility. According to one survey 1 in 5 HR managers are even aware of a gender pay gap at their company. Human Resources is the last place any of us should go to for help in our negotiation because they will be either directly involved in the negotiation or supporting the negotiation in the background. Allison just gave James all the information he needs on what she plans to do in her negotiation by talking with Maya. Maya also did not give any advice that I would call very helpful. Allison even states in the podcast some of the advice seems odd.
Allison also talks with her roommate, Avery. Avery urges Allison forward by stating, “I would be surprised if they don’t increase your salary.” That is great for a cheerleader, which is the role a roommate should play.
My Advice to Allison: More important than a cheerleader, Allison needs someone who is on her side only (not HR) and understands negotiating (not her roommate).
More useful than planning all the reasons of why Allison will get the raise is to list all the arguments James will give her as to why she will not get the raise and create a response to each. Allison, I so wish you got one of my video courses or worked with me directly to prepare for the negotiation.
Allison mentions the 70,000 downloads and sponsorship she has landed for the podcast. The thing that is skimmed over is the business the podcast has generated for the company. James agrees that the podcast is bringing in business. That is the number I really want to know about. That is the number that opens budgets and gets really good pay raises.
My Advice to Allison: Ask for a report from sales or marketing that shows the number of leads and the closed deals The Intern podcast has generated. In a perfect world the report will show you hard numbers such as 100 leads that generated 5 closed deals worth $100,000. Find out the close percentage and the average value of a deal from a sales representative if you cannot get all the data so you can estimate those numbers if you need.
I saved the best for last. Know your worth and value are common comments when talking about women and pay negotiations. I find it a troublesome expression. If you have gotten this far through this blog post, you will notice the focus is on the value of the job, not the value of the individual. I think this is a critical switch in perspective. It takes the personal away from things. This is important for when an employer tries to make you believe you are less than capable and therefore not worthy of earning the average pay of a job. Focusing on the value of the job instead of yourself will embolden you to think, “Heck, if I really am not even average then I would be fired. I’m not fired so I should earn at least the average value of the job.”
My Advice to Allison: Think about job market not the Allison market. Just like a house, a job has an ever-changing market. Each year check out the going rate of the job you do and see if you are being paid appropriately. In the future use online sites like Indeed.com, Salary.com, and Payscale.com instead of talking to a few people. That is not enough information to know what the market is. Other ways to research the market include headhunters and professional associations.
My Advice to Everyone: Listen to Allison’s amazing podcast. It gives you a chance to hear an actual pay raise negotiation. It’s not nearly as bad as everyone envisions. Allison got a raise just like 75% of people who negotiate for a pay raise. If Allison and you take some of the advice from this blog post, the raise will be more inline with the market value of the job. Thanks Allison for this great opportunity to learn from your experience.
Thanks to Leah Moschella of Boston GLOW, I know about this amazing podcast, The Intern, produced by Allison Behringer. I am now a fan of Allison. The episode entitled What’s Your Worth shares a real life negotiation for a pay raise. To the best of my knowledge it is the only real life pay raise negotiation that we are allowed to be a fly on the wall. I had the chance to talk on the phone with Allison. She confirms this is not the full story of her negotiation. She crafted the many parts of the process into one succinct, enjoyable, and engaging story. The resulting story is a master class for everyone. Employees should listen to hear a negotiation before they have their own. Managers should listen to learn what is going on in the employee’s head. Men should listen so they can hear how different women’s negotiations sound from their own.
Spoiler alert: Allison got a raise. I believe there was the possibility for a bigger raise. What could have been done differently to get an equitable result for the employer and the employee? Many things. There are eight things in particular that I believe are worthy of highlighting. This blog post will cover the first four. I’ll post part two with the remaining four next week.
Here’s what James the Manager said as reason for giving a raise that keeps Allison underpaid.
James the Manager: What I’m saying is, like, you’re six months in. You have this product that you essentially own. You are driving it. That’s kind of f**king unheard of. That’s really an amazing opportunity.
What I’m saying, James, is that Allison should be paid for the thing that she is doing that is f**king unheard of. You would not let her own the product if she was not good enough to own it. She far exceeds expectations and is doing producer work with an intern title. Let’s pay her as such instead of talk about her work as an opportunity for her career.
My Advice to Allison: Agree that you own the podcast and that it is unheard of. That is exactly why you deserve better pay. Allison is like most women who according to McKinsey, have to perform while men only have to show potential for promotions. Performing at such a high level should be rewarded now with pay and a possible promotion, not later.
Allison was hired as an intern. Internships by definition are designed to give experience to people with no experience. Internships have an expiration date. They are not to last forever. When hired, the agreement Allison signed stated that the compensation would be revisited in three months. It is now six months after she was hired. She is producing and hosting a podcast with 70,000+ downloads and sponsors. Both are above the success factors established for the job.
My advice to Allison: The ask should not be for a raise but for producer title and the appropriate pay as a producer. Comments that “To be fair, to be fair, like no intern is getting paid that,“ would not be made as objections to appropriate pay if the ask is different from a raise with the same title.
James the Manager: We want to, like, look at this and then again at the end of season one. More because we think it’s, we just think it’s, like, not particularly cool to sort of, kind of, renegotiate right in the middle of something.
Brilliant move, James. He just made Allison feel unprofessional for holding James to the agreement the company made with her to review her pay and that they are actually three month delinquent in doing so. Brilliant.
My advice to Allison: Call him on it. It’s disingenuous. “James, it’s not ‘not cool.’ It’s the agreement we made when I joined the company.” Allison does not share in the podcast that there are any stipulations other than time passing for the review. If that is the case then she can counter James when he says, “three months in, we didn’t have anything.” Her response should not be to agree with him but to say, “there were no other conditions for a review other than time. I guess I’m the one who could say ‘not cool’ to changing the rules in the middle of something.”
James the Manager can get as please as he wants about giving a 10% raise but as the math and the research shows, he’s at best 25% of the way to an appropriate raise. Let’s walk through it.
Employers are budgeting raises for 2016 at 3% on average. The rule of thumb is you should never change jobs unless you get a 10% increase than what you are currently earning. Well, if that is the rule of thumb for candidates then it’s the rule of thumb for employers to offer about 10% more than you are currently earning regardless what the market value of the job is. That is the first problem with using percentage to figure out a raise or starting salary – it does not take into account the current market rate. The other problem is that statistically women and people of color are earning 20%+ less than men who are white or has Asian ancestry. Statistically, a 10% raise will not get them to the appropriate pay.
Here’s where those math word problems from school come in handy.
Allison is earning $50,000. According to her research, her job should pay $70,000 – $80,000. What percentage increase does Allison need to earn the appropriate amount for her job?
(70,000-50,000)/50,000 = 20,000/50,000 = 40%
(80,000-50,000)/50,000 = 30,000/50,000 = 60%
Answer is 40% – 60%. An average 3% pay raise will not get Allison to pay equity. A 10% pay raise, which is considered the equivalent of a promotion or new job is not enough to get Allison to the market rate for the job.
My Advice to Allison: Ask James why he thinks 10% is such an amazing amount. He states 10% with such flare that he obviously does. After he responds, talk how percentage is meaningless when you start so below market. An intern should start below market of an employee but using that intern pay to determine full-time real employment pay is meaningless. It is for this reason 10% is a meaningless reference point.
To be continued next week in part 2.
At its core, the pay raise conversation is the same as telling your boss about any other broken tool. You don’t sweat for one month about saying the Internet is down, the printer is broken, or your chair is uncomfortable. Instead you expect action to fix it and go about the rest of your day waiting for your manager to solve the problem. Borrow that mentality and the pay raise conversation just got less nerve-racking.
It’s 3:00 PM and you have a big meeting the following morning at 8:30 AM. The company printer breaks as you are printing the many materials needed for the meeting. You try all the tricks you know (turn off and on, check and replace the toner or ink, check for a paper jam) but nothing works. Off you go to your manager informing her that, “the printer is broken and we have the Cuddy meeting in the morning!” You don’t even need to finish the rest of your thought. Your manager has the solutions at the ready and replies, “let me take a look and if I can’t fix it, you’ll need to go to a print center.”
You knew the options as well but your boss needed to approve the cost of using a print center. It is not your job to decide to spend that money. It is hers and you know it. The same can be said when you know your pay is not enough aka broken. You know the solution (more money please) but it is not your responsibility or authority to create. It is your manager’s.
Know the problem, state the problem, and then sit back and wait for a solution to be suggested. Granted you may not like the initial solution and will need to state that your paycheck is still broken. It is not until this moment, that I recommend employees throw out their pay and benefits ask. You want to give your boss the chance to offer you more than you expected. It can happen and often does. Sure you still need to know what your ask is and what your goal is. You just don’t need to put all the solutions on the table when you point out the problem.
I hope you don’t think I am referring to you as a tool. No one wants that. The tool is your paycheck. The right pay keeps you with the employer and employers hate turnover. The right pay keeps you motivated to do the job well. The right pay keeps you focused on work and not on your bills. Truly, it is just as important to your employer to find the right salary for you as it is to you.