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07 June 2023

Why women earn less? They don't negotiate!

By Shuchita Kapur

A number of times men earn better salaries than women for the same job for the simple reason that women don’t ask for more money, say experts.

To begin with, companies generally offer everyone (man or woman) a lowball starting offer, and it is up to the individual to negotiate that offer or to take it. But often, men negotiate harder and end up making more money than women in the same position or the same role.

According to Professor Horacio Falcao who specialises in Negotiation at Insead, men much more likely to negotiate pay than women. “Research actually indicates that in many countries around the world, women are more likely to accept the first salary offered than men. This usually results in men entering the company with a higher pay than women and then making more money in the future as raises tend to be percentage increases relative to the base pay.

Unfortunately, many women later find out that they are making less than men performing similar tasks and attribute this to unfair leadership, when many times it boils down simply to who negotiated for more when entering the firm,” he told this website.

Agrees Grainne Fitzsimons, Associate Professor of Management at Fuqua School of Business. “Research suggests that women are less likely to negotiate salary, because women feel uncomfortable in that role and worry about the impression they will make if they ask for more money. In fact, research suggests that this unwillingness to negotiate is extremely costly for women, and leads them to be underpaid in a number of domains,” she told this website.

A research study by Carnegie Mellon University in the US reveals that while 51.5 per cent of men negotiated their initial offers, only 12 per cent of women did.

This kind of behavior is not just limited to lean economic times. Even when the economy is looking up, women are less inclined to negotiate. In fact, according to Sara Laschever, co-author of Women Don't Ask: Negotiation and the Gender Divide, 20 percent of women say they never negotiate at all. And in the current recession, which has made many job seekers feel grateful for any work they can find, even a part-time toehold can feel like a victory.

Another research by John J. Heldrich Center for Workforce Development at Rutgers University substantiates this. He polled nearly 600 young men and women who graduated from college between 2006 and 2010. The authors found that young men are not only out-earning young women, they're doing so by an average of more than $5,000 per year.