According to research by Mintel, women are 50% less confident about asking for a raise compared to men — 42% of men feel confident about asking for a pay increase compared to just 22% of women. And this lack of confidence may, unfortunately, be warranted. A separate study conducted by Harvard Business Review found that women are just as likely to ask for a raise; however, they are much less likely to receive one. Only 15% of the women who asked for more money received the raise compared to 20% of men. This failure to receive raises on the same level as male counterparts is one of the reasons for the existing gender pay gap. On average, white women in the U.S. earn $0.77 for every dollar earned by their white male peers, and this discrepancy expands greatly when race is factored in.
Despite these stats, there are things women can do to increase their chances of getting a pay increase. In this “Financially Savvy Female” column, we chat with Ashley Stahl, career expert at SoFi, about how women can build their confidence to ask for a raise — and actually get one when they ask.
Many women are apprehensive about asking for raises. What steps can they take to build up confidence before approaching their manager about getting a raise?
To gain the confidence to ask for a raise, follow these three guidelines:
- Aim for transparency amongst friends. Interview your peers to learn what they are making, if you’re comfortable doing so. Depending on the nature of your relationship with them, consider asking them to be transparent about their salary, job description, title and responsibilities. Compare their salary to yours, but do make sure you’re comparing your salary to those who have a similar role and level of responsibility to you. Be sure to consider their unique experience that factors into their salary, as well as what you’ve accomplished versus what your peers have accomplished, including increased company profits (or losses). Keep in mind it is more about job responsibilities and achievements over job title and description. A manager at one company likely has an entirely different role than a manager at another company. Seek out men and women to interview.
- Make a list of your achievements. How have you contributed to the company? Be specific. For example: “Under my leadership, our team increased profitability by 25% over the first and second quarter” or “Using an innovative approach to reducing our carbon footprint, I was able to save the company x dollars over the preceding year, and the company is on target to do the same or better this year.”
- Practice asking for a raise in front of the mirror, with a friend, or the dog! According to Harvard Business Review, practice not only builds confidence but improves quality. Be objective. Anticipate objections and find solutions. Come up with as many scenarios as needed to gain the confidence you need.
How can a woman know that it’s the appropriate time to ask for a raise?
Timing is everything. Let your supervisor know that you would like to discuss your performance. Give them notice and ask for an appointment or meeting within the next two weeks. It is best to schedule a meeting, otherwise, a “future date” will get lost in the day-to-day grind, and a casual stop-by conversation will be treated … casually. You don’t want your raise to be a casual matter, do you? Ask before your performance review pops up! If it has been a year since your last performance review and you’re doing excellent work, it’s time to ask for a raise. The key is to make this request at least a couple of months before your review because once you’ve walked into your review, your boss tends to already have a compensation increase (if any) both in mind and prepared for you. Raises should not be expected for mediocre work. But if you’re doing great work, increasing profitability, client retention, employee morale or exceeding in your role, asking for a raise is appropriate.
Work around the budget cycles of the company. For example, if you know that the first quarter is always slow, ask for a raise after the second quarter picks up. Avoid asking for a raise during the middle of company deadlines. However, just after the deadline passed — especially if you contributed to its success — might be a great time to ask.
What should you discuss in the meeting to improve your chances of getting a raise?
Stick to the facts.
Do not discuss the personal reasons you need a raise, such as the cost of babysitting, transportation costs, etc. Be objective with your accomplishments and how you’ve helped the company. Be prepared to answer questions about your work.
Have a specific number in mind.
Research shows that having a very specific number, such as $132,400, implies that you’ve done your homework and know your value as opposed to the more general $130,000.
It is OK to negotiate.
If you’re offered a lower number, ask your boss what steps you can take — and goals you can exceed — to earn the amount you want. Write those down, set a timeline and schedule a follow-up meeting.
Be prepared to hear “no.”
In the event you do not get a raise, keep your cool. If you truly enjoy working for the company, ask if you can revisit the discussion and set a timeline. Develop a plan with your supervisor so that you can achieve the raise you deserve by asking, “What can I do or what value can I add in my job to set myself up for a raise in the future?” On the other hand, a “no” might be the kick in the pants you need to move on. A lot of my clients are stuck in their jobs because they’re either too afraid to ask for a raise or were told “no,” so they think they’re not worth more money. That’s not true. If you truly do the work and provide value but the company you work for doesn’t see it, it’s time to move on. Don’t slack off at your current job, but begin your search for something better.
GOBankingRates wants to empower women to take control of their finances. According to the latest stats, women hold $72 billion in private wealth — but fewer women than men consider themselves to be in “good” or “excellent” financial shape. Women are less likely to be investing and are more likely to have debt, and women are still being paid less than men overall. Our “Financially Savvy Female” column explores the reasons behind these inequities and provides solutions to change them. We believe financial equality begins with financial literacy, so we’re providing tools and tips for women, by women to take control of their money and help them live a richer life.
More From GOBankingRates