By most measures, working women and men aren’t paid equally.
The Census Bureau estimated in 2019 that women earned about 82 cents for every dollar that a man was paid. A gap, albeit a smaller one, also pervades among women and men who work similar jobs and share the same skill sets and qualifications, according to research from salary and compensation data firm PayScale.
While the gender pay gap has shown marked improvement over the last several decades, it’s a stubborn problem weighing on women’s wallets. It can also end up being costly, setting women back in their goals to save and invest.
For advice on how to navigate the gender pay gap and still meet your financial goals, we spoke with Chantel Bonneau Stewart, CFP, wealth management advisor at Northwestern Mutual, and Cady North, founder and CEO of North Financial Advisors, which specializes in helping women meet their financial goals.
1. Do as much research as possible – and don’t be afraid to chat with colleagues about what they’re making
To know if you’re really paid up to scale, start looking into specific salary data for workers with your educational level and experience who also have a job within your industry and geographical location.
While that includes online research, you should also consider speaking with other professionals in your industry and your coworkers to see salary ranges at your company. Don’t think of it as a taboo topic, North says.
“Focus on the things that you really can control,” North says. “When it comes to negotiating to try to get out of the pay gap, getting as much information as possible is extremely important.”
2. Don’t divulge your earning history with recruiters or hiring managers
If you’ve ever interviewed for a job, you might remember instances of a recruiter asking you about your salary expectations or earnings history. While experts say this is most of the time a way for recruiters to learn more about you, it might end up perpetuating the cycle.
Avoid answering the question and instead tell the recruiter you’d like to learn a bit more about the role. You could even offer a tight salary window, somewhere in the range of $5,000 and $10,000, of what you’re expecting to be paid based on the research you’ve done for the role.
“Employers have a bad habit of using what you previously made as a base and building on top of that,” North says. “Have a few phrases in your pocket, like, ‘My previous salary was below market value, so based on my skills and research for this role, I think this range is appropriate.’”
3. Don’t be afraid to job hop
While it’s not uncommon for workers to get a raise every year, most of the time these prove to be fairly minimal unless they’re paired with a promotion. Research suggests that workers see the most significant pay gains when they switch jobs.
“The typical annual pay raise when you’re in a job is going to be based on what you made before,” North says. “If you can get a huge pay raise by changing jobs, that’s a really great way to reset and kind of put you on a much more level playing field.”
4. Always ask for more
Negotiating is going to be your most powerful tool. Recruiters and hiring managers expect it, and it’s the quickest way to ensure you start earning more right away.
“I had a man in my 20s tell me that every time you switch jobs, you should always ask for a 20 percent raise,” North says. “That was extremely instrumental for me because it really gave me permission to ask for more than I probably would have. The idea that we have to negotiate is really something we have to get used to.”
5. Get comfortable with negotiating by practicing
But negotiating isn’t exactly a comfortable process. Practice makes perfect. Consider looking in the mirror and planning out what you’re going to say when the time to ask for more money comes, North says.
“Practice the phrasing that you’ll use looking in the mirror. Practice pausing after you say what you want,” she says. “All these things can be very difficult in the moment without practice.”
6. Come to the table with ways to demonstrate what you are worth
During any type of review, come to the table with concrete, tangible examples of how you contributed to your company’s top-line growth and use it as a reason for why you should be paid more.
“The areas where you have really moved the needle make it hard to argue with the value that you bring,” Stewart says.
7. Prioritize saving and investing – but make sure you still have an emergency fund
Women might feel more pressure to invest knowing they could be earning less than their male counterparts, though it shouldn’t come before having a cushion of cash to cover your expenses in case of an emergency or job loss.
“The more you can invest, the more you’re going to get ahead of the game because investing buys you options [to do things like] taking a sabbatical in 10 years or switching to a part-time consulting gig 10 years before retirement,” North says. “But investing doesn’t start until you have a solid financial foundation.”
8. Stick to a personal financial plan
Meanwhile, confidence with your own personal finances might permeate into your professional life, Stewart says. If you get to a point where you feel comfortable with money, you might end up feeling braver to talk about it with a recruiter or manager.
“It’s helpful for people, especially women, to make sure that finances are part of their life,” Stewart says. “It’s like your health, your fitness goals and your mental health – all of those things you want to be consistently checking in on, and you want to have a good pulse and relationship on how those things work in your life.”
Source: Bankrate / Image from freepik