Your salary matters.
“For many people, your biggest asset is your earning power, so you have to manage that as well as any other asset,” says Dawn Rapoport, a certified financial planner and chief operating officer at Waddell & Associates.
This is especially important for people early in their careers, in the “accumulation phase” of acquiring assets.
“In the early years, where you start very much has an impact on where you end up,” she explains. “You want to make sure you are being very focused on negotiating your best opportunities, because that will help determine what you’re getting paid in future roles. If you spend ten years being undervalued, that doesn’t set you up for the middle or later stages of your career, where you should hit peak earning power.”
This advice applies to everyone — but research shows women may have more trouble putting it into effect, whether that’s because of their own socialised tendencies, a lack of history with effective negotiation, or the way their actions are perceived from across the table.
Below, Lee E. Miller, co-author of “A Woman’s Guide to Successful Negotiating” with his daughter Jessica, details seven of the most common and counterproductive negotiation mistakes women make.
'In academic studies and in my own experience in the business world, women often do not negotiate,' Miller says. 'They simply accept the first offer.'
Counterintuitively, an employer is usually ready for a little discussion. 'I've been on the recruiting side, I've been the head of HR, and I expect there will be negotiation -- especially as you move up the ladder,' Miller explains.
In fact, missing the opportunity to negotiate for yourself could even raise a red flag with your employer. 'If you don't negotiate for yourself, the company will wonder, as you move up, 'Is she going to negotiate effectively for us?' Declining to negotiate casts doubt on your leadership,' Miller says.
One tactic Miller has seen among women is to accept a position without negotiating, with the intention of proving their worth and then approaching their employer for a raise.
But, he explains, there's a flaw in that approach. 'If you start too low, your raise is on that too-low base. Aren't you better off getting an additional $10,000 up front and then getting the same 10% raise down the road? You should always be negotiating the best possible deal that you can.'
He acknowledges that sometimes, an employee isn't in the best position to get more than the initial offer right off the bat. That's fine, he says -- but go in with a strategy. 'It's very typical if you're changing fields or you need new skills, to get the experience and then ask for the raise. If you can't get it after all that, be willing to change jobs, because someone will be willing to pay you.'
One of the main reasons women are reluctant to express dissatisfaction with an offer is because they're afraid of losing it, Miller explains.
But it depends on your approach.
One phrase you can use -- assuming it's true -- is, 'I think this is below the market, can you reconsider?'
'It's 'no,' but it's not definitive,' Miller says. 'It's, 'Can you do better?' You have to always understand the employer is trying to recruit this person. They want you to start the job happy.'
He recommends using phrases like, 'Can you help me? Can you help make this offer one that will allow me to happily accept?'
'The key to all this is to give them reasons to want to help you, so you take the offer and take it excitedly,' Miller says. 'That's what we want. We don't want you not to be happy about it, because the first time someone comes along with a better offer we know you're out of here. If you have reasons for asking for other things, we'll probably say yes.'