How should a young woman approach the gender pay gap?

gender pay gap
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Young women need to be aware of the gender gap: in many countries the gender pay gap is around 25% and 10% when compared with identical jobs.

The reasons for the gender pay gap are explained by the fact that more women work part-time and choose sectors (e.g. education, hospitality management, care industry, etc.) and jobs (marketing, HR, communication, etc.) which usually attract less pay. How to explain the difference of 10% for the same job?

One reason for this pay gap is that women are less comfortable negotiating: only one in eight women challenges and negotiates her salary as opposed as one in two men. Another statistic shows that young female graduates expect to be paid 15% less for their first salary than male graduates. Men tend to negotiate in the following manner: “I won’t consider this job for less than £50,000” whereas women tend to say “I am earning £45,000 at the moment. Ideally I would like to get little bit more.” This is why at Audencia Business School, we launched, in September 2017, a free training programme called NégoTraining, which aims to raise awareness among women about this issue and help them negotiate their salary and other benefits. It is open to all women, whether they are working or seeking employment within any sector, because they all face the same gender stereotypes and glass ceiling. The goal is to train up to 5,000 women by 2020. Other regions of France and companies have asked Audencia to offer similar training programmes across the country. This further confirms the importance of this issue.

Another reason lies on the employer’s side: recruiters sometimes offer lower salaries to female candidates because of gender stereotypes, including that women work as much for personal satisfaction as for the money. A particular challenge is the fact that much of this stereotyping is unconscious.

Which sectors fare better than others and why?

From one business sector to another, the differences in net hourly wages vary widely, but they are always in favour of men. Studies show that the difference in hourly wage between men and women is as follows: 1.5% in the construction sector, 2% in the water and waste treatment sector, and 7% in the transport and warehousing sector, 25% in the textile sector, 30.7% in the arts sector, and it rises up to 39.5% in the finance and insurance sector which has the highest gender pay gap.

It is particularly interesting that the hourly wage gap between men and women appears to be lower in some sectors that employ a majority of men. In those sectors, the few women have more well-paid jobs. On the contrary, in female-dominated sectors, the few men present are more likely to occupy the most highly qualified, managerial or high-skilled positions.

Sectors that have the highest pay are investment banking, insurance sector, finance (trading), industry e.g. automobile industry, consulting industry, audit, etc. Men tend to work in those sectors whereas women choose sectors that pay less – service, education, health care and social welfare. This is called horizontal segregation or the glass wall. Young women should be informed about these facts before choosing a job and sector. Many factors influence the choice of a job: family, environment, school, peers, etc. Social class is also strong determining factor: children of blue collar workers do not generally study at university or at business school. Many young women feel that they are not competent to work in more male dominated sectors – a kind of self-censorship that affects the career choices of young women.

And even women who work into male dominated sectors are still paid less – for example the bonuses for female investment bankers at Barclays are 79% lower than men on average than the bonuses given to their men counterparts (Source: http://uk.businessinsider.com/barclays-gender-pay-gap-bonus-2018-2)

Which countries have the most positive approaches? Where is it being tackled right? Where are countries fall short?
The most positive approach to the gender pay gap are found in Scandinavian countries and in Iceland. Thanks to an egalitarian culture and government policies that encourages and allows men to benefit from a generous parental leave, and professional equality between women and men in the workplace is much more advanced. Germany has just passed a law enabling women who work for medium companies (200 + employees) to check the remuneration of their male co-workers. Large German businesses (500 + employees) must publish complete salary structure and show evidence that they are complying with equal pay legislation. More transparency is the way forward in reducing the pay gap. Some companies in Silicon Valley also publish their salary scales in order to attract (female) talent.

What do women need to know about negotiating salary rises?

First women need to be aware how important salary negotiation is and to initiate it. There are four steps to negotiating a salary. A successful negotiation starts with a careful preparation:

Know your value:

You need to know how much you are worth, what your strengths and capabilities are, how much experience do you have, what are your achievements, your results, your performance. You need to sell yourself and work on your personal branding.

Benchmark your salary and benefits:

You need to know how much jour job is worth; what do competitors pay for the same (or a similar) job? you may want to check websites such as indeed.com, hays.com, glassdoor.com, etc. Have a look at job offers: do they provide a salary range? Ask members of your network! Ask alumni of your university or business school! Get as much as information as you can; you also need to get the big picture. It is also important to think about the total compensation package and not just your base salary: what kind of benefits can you negotiate? What about variable pay (individual or collective)? What about a company car? Does the organisation have any profit sharing schemes? Is there a pension scheme? Is there an employee assistance program (EAP)? What about training and development opportunities and career advancement? Can you work from home? What about working time and time off? Bear in mind that you should use a salary bracket of 15% to 20% when you negotiate. This shows that you have done your homework and that you are open for negotiation and flexible. Negotiation is a win-win game.

Know your strategy:

First of all, you need to be in a good state of mind to negotiate. You should be confident and positive not just for yourself but also for others. If you are not feeling well or angry, you’d better postpone the negotiation. There are two negotiation strategies: 1. Your target salary is on the lower level of your salary bracket (e.g. salary bracket = £41,000 to £50,000; your target salary is £41,000); 2. Your target salary is in the middle of your salary bracket (e.g. salary bracket = £41,000 to £50,000; your target salary is £44,000);

Practice makes perfect:

After a solid theoretical preparation, you need to practice. You may organise a role play with a good friend in order to simulate a situation of a salary negotiation. If you feel confident you may go immediately into a salary negotiation with a recruiter or your line manager. After the interview, analyse what went well, what went wrong and what kind of improvements you could make.

For a successful negotiation, you also need to adopt the “right” attitude:

  • Be assertive
  • Go in with a positive attitude
  • Show the you are interested in the long run
  • Stay calm

About the author

Article provided by Prof Christine Naschberger of Audencia Business School

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