Personal Finance

How to Negotiate Your Way Out of the Pay Gap

Negotiating a pay raise isn’t always easy, but knowing your worth is important for achieving long-term financial success.

About a year ago, Julia Egan discovered that a female colleague made 47% more money than she did. In a meeting soon after that, she broached the topic of pay with her coworker, but before she could share how little she was making, her coworker confided that she was frustrated because she made 20% to 25% less than their male colleagues.

“I left the meeting realizing not only that my colleague was paid 47% more than me, but that other male colleagues were making over 60% more than me,” Egan said.

Instead of negotiating, Egan decided to start her own business, Balancing Bravely, which offers support to working mothers. Working directly with other women helped her identify the struggle for fair compensation as a common issue facing women across employers and industries.

“For months, I thought it was my fault that I was underpaid because I didn’t advocate for myself, because I didn’t negotiate, because I didn’t even know,” Egan said. “But I realize every day in conversations with other women that I was not alone. Most women do not know what they are worth in the market. If women find out they are underpaid, they think they are to blame, and they question whether they are really worth it.”

Among full-time, year-round workers, women make 80 cents for every dollar that men make, according to data from the U.S. Census. Although some states are doing better than others, this translates to an earnings gap of $10,169 a year in median pay, according to the National Women’s Law Center.

Add that to the nonsensical difference women pay for women’s products, and women’s lifetime earnings really feel the pain over time. If you feel that you’re not getting paid what you’re worth, here are some steps you can take to level the playing field.

Know your value

To the extent that you can, use salary sites to get a feel for what others in your kind of position are paid. After that, though, you’ll have to get a little vulnerable.

“It’s not enough to get the generic information,” said Eli Howayeck, a career coach and founder of Crafted Career Concepts in Shorewood, Wis. “You’re going to have to open up strategically with people you trust in your network, possibly within the company and definitely outside the company.”

You can do this in a few ways. You can share your salary information with a mentor or someone in your network and ask them if, in their experience, you’re being paid fairly in your field. If you don’t want to share your pay, you can ask people what they would consider fair pay for someone doing your job.

And although it may feel taboo, you can also approach others at your company to discuss pay. It’s legal to discuss your salary with coworkers and for them to discuss theirs — and it’s illegal for employers to prohibit it.

An important distinction here is that you should be asking to be paid what you’re worth. “You’re not making the case for being paid the money that you need to make your ends meet,” Howayeck said. “You’re approaching this because you’re not being paid what you are worth, or you’re not being paid relative to the value you’re bringing to the organization. It’s not about your mortgage or the lifestyle you want to live.”

Come up with a plan

If you feel you should be paid more, you need to bring it up to your boss. It’s important, though, to be thoughtful about how you approach the issue. Don’t do anything hasty or in the heat of the moment. Think through who you’re going to talk to, when you’re going to them and what you’re going to say.

When you’re asking for more money because you feel you’re being undervalued, be ready to make a case for what you bring to the table. Are you increasing company revenue? Do you have a lot of valuable client connections? “There better be something tangible that warrants that pay adjustment,” said Susan Hosage, a senior consultant and executive coach with OneSource HR Solutions in Wilkes Barre, Pa.

If you have the option of talking about it when you have leverage, that’s even better. “The best time to bring it up is when your company needs you the most, when you achieve something that has some good visibility and your personal stock has gone up,” Howayeck said. “You’ve landed a big client or saved a big client, or you’ve just been awarded something. Timing matters.”

Just ask

If you’ve done your research and everything seems to point to a gender pay disparity, be direct with your boss. They may not even be aware of the issue, Hosage said, “especially if they’re not adjusting on a regular basis, or your immediate boss may not be responsible for making pay adjustment decisions.”

In fact, you might start with the human resources department at your company. “They often have a little more stake in the game in trying to make sure things are in fact internally equitable,” Hosage said. “And they’re going to not only be looking across that title and salary band, they’re going to be looking enterprise wide.”

If you have concrete research suggesting that you’re underpaid for your work, present it. But naming a colleague whom you know makes more money can feel like throwing them under the bus, and it’s also fine to say something as simple as, ‘I have reason to believe that I may not be appropriately compensated for my job; can you look into that?’

If they ask why you feel this way, “you could say, ‘I’m doing the same work as other people in my department, but I think my compensation is different,’” Hosage said. “You have a legal right to be equitably compensated. When somebody asks me that, I don’t view it any differently than someone who brings a safety concern to my attention, because it’s a legal right.”

Determine your next steps

If you feel like you’re not being paid enough for your contributions to the company, you’ll have to choose whether to stay or go. If you’re staying, you can try to negotiate for more non-pay perks, like more vacation time or the ability to work from home on Fridays. “There are a lot of things that are valuable to people that aren’t just about money, and sometimes that’s easier to do,” Hosage said.

If you’re dead-set on a pay bump, you may have to leave to get it. “If you really want to negotiate money, the time to do it is on the way in,” Hosage said. When you’re the top candidate and a company is offering you the spot, they’re more likely to move on pay.

One important caveat: if you feel like your compensation is a result of discrimination and not just a misrepresentation of the value you bring to the company, you may need to take more drastic steps. It would be best to make that complaint directly with human resources. “You have to have people who are well-versed enough on equity issues,” Hosage said.

After that, you’d have to file a complaint with the EEOC, but you’d better be sure of your case, because you’ll be kicking off an external investigation. “That’s a pretty big step for somebody to take if they want to stay with a company,” Hosage said.

The bottom line

Approaching your company when you feel there’s a gender pay disparity — or for more money in general — can feel intimidating, but you’re completely within your rights to ask the question. “It’s up to them to justify why they’re paying you what they’re paying you,” said Matthew Burr, a human resources consultant in Elmira, N.Y.

Back your case up with research, talk to contacts and mentors, and schedule a meeting with your boss or HR department when you’re calm and on top of your game. Be confident in your own value.

“I have been very successful since starting my own company and am accepting that it was not all my fault,” Egan said. “I really am worth what my colleagues were paid.”

Kate Ashford

Kate Ashford is a writer and content creator who specializes in personal finance, careers, health and consumer trends. Her work has appeared online at the BBC, Forbes, Monster and LearnVest, as well as in national publications, including Money, Parents, Family Circle and Women's Health.