Some thoughts from Dale Randolph in our Australian office…
This month the current CEO of Reddit, Elen Pao revealed to the Wall Street Journal that in a bid to level the gender wage gap, they would no longer be negotiating on salaries for new employees. Her argument follows the assumption that women are less effective negotiators and are less likely to ask in the first place.
From my experience, salary negotiations are something that both sexes delegate to their recruitment consultant with enthusiasm. It’s similar to a double or nothing bet, except there’s no ‘nothing’. I am yet to see a prospective employer take an offer off the table for the sole reason of being asked for a higher wage.
For us headhunters, salary negotiations are a double-edged sword. On one hand a bigger package for our candidate leads to a bigger fee. The flip side to this is that if you value your client relationships (like we do!), salary negotiations are a sure-fire way to put them under stress.
All clients are under pressure to keep their costs down, especially when they are paying for recruitment services. If a candidate is just asking for more money because “Why not? I’ve got nothing to lose and everything to gain”, then you could find yourself in the less than savoury position of trying to find more money for someone that clearly doesn’t warrant the pay-rise.
It is important for the recruiter to act as the gatekeeper to what is fair and what is not, we have enough experience to very quickly assess what someone’s market rate is. More than once I have told candidates that I won’t ask for more money, because they won’t get it. When your recruiter is saying that you’re not going to get more, then you can be pretty sure that they aren’t kidding you. Trust me, no one else (family excluded) wants you to get a higher signing salary than your recruiter.
What then of Elen Pao’s assertion that females are less likely to negotiate than their male counterparts? Over the last 3 years at Ferrari Healy in Australia, 1 in 2.5 females (after being offered a position) have asked us to negotiate for more money. For those unaware, the recruiter handles these conversations on behalf of their candidates. This is compared to 1 in 6 males. I must stress at this point that the sample size we’re dealing with here is relatively small but it’s still quite a significant difference, right? Let’s have a think about why this may be…
Some women might consider themselves to be underpaid as a result of not negotiating for a fair salary in their previous position. This could explain why they are so eager to ask for more when represented through the process. Obviously this does not apply to all women out there, and will insult some that are expert negotiators, but I think the general consensus would support my musings.
One important point to make here is that in our initial screening process, men seem more likely to establish the minimum salary that they would be prepared to move jobs for. If we think this is going to cause problems later on in the interview process (i.e. if they want more than the level we were briefed on by the client) then we’ll flag this with the employer straight away. If the candidate is then eventually offered the position, our client is aware of what they will accept, so potentially the initial offer is likely to be more generous therefore negating the desire to negotiate further.
Another suggestion, which is so self-serving that it needs to be taken with a pinch of salt, is that recruitment consultants help to level the playing field. If one of the main reasons for salary inequities between genders is ability and desire to negotiate, then we can eliminate this variable by deferring the responsibility to a third party.
With all this in mind, let’s have a look at this from the point of view of the hiring companies. If to eliminate the gender-wage gap, you have to hire employment consultants to negotiate fairly, you are not only going to be paying your women more money, but you’re also paying a recruitment fee for the privilege. Alternatively, you could take Reddit’s stance and remove both of those added costs. At face value it sounds like a cost-effective way of solving this problem.
These issues are always polarising, and I’m still making up my mind as to where I stand. Personally, I nearly had my head bitten off back at university for suggesting that in certain situations (i.e. the board of a multi-national organisation) women might benefit from a policy of equal male to female recruitment. The majority of those that disagreed with me were female, and their main point was that it would undermine the success of women if their positions were seen as having been acquired by necessity to adhere to policies, rather than on merit.
Perhaps a compromise between the two would be best, where the board is built of equal parts male to female, then the policy is relaxed once both sexes have an equal say in the matter – I don’t know. However, what I learned in that situation can be directly applied to this issue. By making the removal of salary negotiations about empowering women, there is the distinct possibility that it will create a resentment of women for limiting potential reward for both sexes; in turn doing more harm than good.
My parting point is this – effort and ability has no gender. If you limit the potential rewards for people that exhibit both in abundance, then you may end up discouraging the very people you are trying to help succeed.