fbpx Skip to content

Tips on stepping over the pay gap.

How to overcome systemic barriers to negotiate better employment compensation.

A woman negotiating

It is an undisputed fact that women earn less than men. The gap varies by age, industry, location, and the method by which you measure it, but most estimates fall within a 10 to 25 per cent range — and that number grows for women who are Indigenous, living with a disability, racialized, or newcomers.

What is less clear is why this problem continues to persist. One common explanation is that the blame lies mainly with women themselves, for failing to ask for the compensation they deserve. In their 2003 book, Women Don’t Ask: Negotiation and the Gender Divide, Linda Babcock and Sara Laschever cite a study of recently graduated MBAs from Carnegie Mellon University. Only 7 per cent of the women had attempted to negotiate their starting salary, compared to 57 per cent of the men — resulting in compensation that was nearly $4,000 higher, on average. That amount, invested at a modest return of four per cent, would be worth over $60,000 in 25 years. And that doesn’t account for other increases of income that are negotiated over time.

As this statistic and others like it continue to be shared, what gets critically lost are the systemic explanations behind it: Women are socialized not to self-promote, and are punished when they do so, including when advocating for compensation in the workplace. Plus, more recent research finds that women are now in fact asking for increased compensation about as often as men — except they’re 25 per cent less likely to be successful.  

“These days it seems like there is zero negotiation allowed for new employment,” says Celeste, a network professional based in San Diego, California, who has been in the industry on and off for over 23 years. “Maybe it’s where I am in my career and career search, but it has yet to be presented as a dialogue. More of a take it or leave it.” 

What to ask for, and how to ask for it

Telling women to simply act more like men is not the solution to close the compensation gap. But while we work on the necessary systemic change, women need a better understanding of what to ask for, and how to ask for it. 

Fotini Iconomopoulos is a speaker, trainer, and author of Say Less, Get More: Unconventional Negotiation Techniques to Get What You Want. She has spent more than a decade teaching negotiation and communication skills, including advising clients on getting the compensation they deserve.  

“Both studies and anecdotal evidence show us that women are treated differently when it comes to negotiation, so we need to be more savvy.”

“Both studies and anecdotal evidence show us that women are treated differently when it comes to negotiation, so we need to be more savvy,” says Fotini. “We need to find ways to get creative on compensation as well, because salary is one piece of it — you can’t pay your mortgage except with the money in your bank account — but there are ways you can increase your wealth in addition to salary.” 

She recommends starting with considering your everyday or occasional expenditures that the company can be covering. Things like parking, transportation, and home office expenses, including your Internet and cell phone. When you take income tax into account, you have to earn more than $100 to pay that $100 mobility bill — while your company might be able to take advantage of bulk rates or tax incentives. 

You can also negotiate for education or training funds, from conference allowances to professional certifications to getting your MBA. “There are lots of things from a personal development perspective that will not only help you save money, but also help you to advance your career.” 

Career advancement

From the perspective of future career advancement, there are also non-monetary items to consider that are really important, like your job title. “If you do have to leave this company someday, or if you want to get promoted internally, which job title you are starting from determines your jumping off point,” advises Fotini. She also recommends asking what kind of access you’ll have to interesting projects, and what exposure you’ll have to potential mentors and sponsors. “All of those things are going to help qualitatively and quantitatively to advance your career, and hopefully make you a lot more money a lot faster.” 

Some employers may hesitate to give you the title or salary you’re asking for until they’ve seen you in action. It’s an issue Fotini sees happening more often with women than men — “men are often hired on their potential, women on their proof” — and she recommends countering with a starting bonus. “It’s a great way to bridge the gap, as they don’t have to commit to higher compensation fully.” 

Approach to negotiation

When it comes to your negotiation approach, Fotini says a lot of it is based on gut instinct. “You need to know the person that you’re dealing with, and what the right timing should feel like,” she says, adding that there are some general guidelines to follow if you’re unsure. Some elements, like job titles, might be easier to bring up sooner compared to a benefits package. “It’s very common to have salary be an early part of the conversation, so people shouldn’t be shy about doing that. If they’ve made an offer, or you know they really want you, that’s when it would be appropriate to be talking about all these extra details.”

Depending on your industry, there might be established norms with respect to perks, but consider them a starting point. “As much as I would recommend people do their homework to understand what’s standard in your industry so you’re at least getting the bare minimum — don’t let that limit you in terms of what you should be asking for,” says Fotini. “Just because it’s normal in consulting but not normal in manufacturing doesn’t mean that you can’t ask for it or that you won’t get it.” 

She has similar advice for seniority level. “Usually, the more senior you are, the more extra signing incentives you can get, because you’re going to be leaving behind some serious job security. You have to be thinking of what they can do to minimize some of that risk,” says Fotini. “It’s compensation, it’s starting benefits from the very beginning, versus a trial probation — all things that can add to your bottom line, and may very well be standard costs for the business. They’re more expected in senior roles, but not impossible in junior roles.”

“The greatest resource we have is people. The hiccup with that is, people are very uncomfortable talking about salary.”

Diane has spent two decades in the advertising industry, in Toronto and abroad. It’s common to switch agencies every few years, either to gain experience on new clients or to move up the ladder, so she’s been through the process more than a handful of times. She now approaches each offer as a negotiation, and recognizes that companies have the leeway to bend their own rules, especially when it comes to more senior positions. 

“I’ve asked several times to waive the three-month probationary period to get access to health benefits right away,” says Diane. “And when I started in my current role, it was a standard part of the package to have a car allowance and parking spot — except I don’t drive. So, I negotiated for a metro pass instead.” 

Tailoring the offer to her needs is a tactic she recommends to others. “I always look through to see if there are any benefits I won’t be able to use, and think of what else I can negotiate for in its place,” Diane says. Her savvy comes from experience, but she says she has learned the most about what to ask for and how to succeed at negotiations by talking openly with friends and mentors. It’s the approach that Fotini recommends everyone take. 

“The greatest resource we have is people,” she says. “The hiccup with that is, people are very uncomfortable talking about salary.” To overcome that hurdle, she suggests carefully crafting your questions in more general terms, such as ‘what would you expect someone of my experience level to get in this organisation, or in my industry?’ 

“Without those conversations, I fear that even with Google and Glassdoor and all of those resources, we’re missing a really important piece of the puzzle to get women where they deserve to be,” says Fotini. “There are wonderful people out there who want to see you be successful, so tap into those people, ask great questions, and you won’t be held back by some of those obstacles put in your way.”

At BMO, our deep-rooted belief in doing what’s right can be summed up in a simple statement of purpose: Boldly Grow the Good in business and life. If you're looking for inspiration and guidance to grow the good yourself, check out Women of Influence's deep dive — Money Making Change — on using investments, charitable giving, and everyday spending to make the world a better place. ​