MONEY pay gap

3 Ways Women Can Make Sure They Get the Raises They Deserve

hand helping hand
DAJ—Getty Images/amana images

Career coach Caroline Ceniza-Levine weighs in on the controversial comments made by Microsoft CEO Satya Nadella last week. Her take: They underscore the need for women to find sponsors and sponsor others.

I imagine that the savvy, self-starting executive women of Microsoft felt particularly deflated by CEO Satya Nadella’s recent remarks (later withdrawn) that women shouldn’t negotiate for more money. Here they are most likely doing all the prescribed “right” things:

  1. Entering a high-growth industry, such as tech
  2. Working for a brand-name firm, like Microsoft
  3. Proactively working on their negotiating skills

…and then BAM! Here comes Nadella essentially saying that they should just wait for the system to even out the gender pay gap. If the CEO isn’t going to support your efforts, why even bother?

Actually this is precisely why you should bother with all of the proactive hard work. Your effort and skills belong to you, and you can take them somewhere else if you should hit a brick wall.

Sure, Satya Nadella’s unfortunate admission shows that a CEO of a major corporation may thwart your efforts just as a mid-level manager or even a narrow-minded friend (in the guise of well-meaning advice) might. You may not get the support you expect. But if you keep doing the prescribed “right” things below, you will collect some supporters to your cause along the way—including more open-minded, equitable executive sponsors.

Create an amazing body of work

It still starts with getting results, establishing your expertise, and contributing to the bottom line. Don’t let your own work product suffer because there is someone at the top of your company who doesn’t care—others do care and are watching for promotion-worthy candidates. You want your name to surface.

But you cannot simply let your accomplishments stand for themselves. You need to advocate for your them, to ensure they are recognized. See my previous post on preparing for your next review for step-by-step instructions on making sure you get your due.

Build a strategic and supportive network

So Nadella is out of step, and there are probably other CEO’s who share his view. But there will be men and women—at every level, in every industry, in every functional area—who are supportive.

I once had a banker at a big-name firm encourage me to “follow my heart” and take an unexpected career turn, even if it meant turning down his firm’s offer. He was so supportive and generous and gave me courage when I needed it most—and this was a BANKER! If I managed to find a mentor with a heart of gold in that industry, there will certainly be supportive senior people in any industry.

Find them. Enroll their support.

Be a strategic and supportive of others

Be the anti-Nadella. Don’t just throw your hands up at the amorphous system; proactively help others along and do your part to change the game.

Pick the smart but shy person in your group and plan to call on that person in the meeting; let the person know what you will ask so they have a chance to prepare. Think of that colleague from another department who always helps you and write a commendation to her (or his) manager, cc’ing the person you’re writing about. Return to your alma mater for a networking event or career talk.

As you build your amazing career and advocate for yourself, reach back and better the system for others.

 

Caroline Ceniza-Levine is co-founder of SixFigureStart®career coaching. She has worked with professionals from American Express, Condé Nast, Gilt, Goldman Sachs, Google, McKinsey, and other leading firms. She’s also a stand-up comic. This column appears weekly.

Read more from Caroline Ceniza-Levine:

MONEY Careers

This Guy Emailed His Boss for a Raise — And Cc’d the Entire Company

Hand waiting for money
Image Source—Getty Images

A Wells Fargo worker asked his boss for a company-wide raise of $3 billion, and he CC'd about 200,000 people. But his manager says he won't be fired.

In what might be the ultimate power negotiating tactic, a Wells Fargo employee asked his boss for a raise over email and intentionally copied the entire company.

As the Charlotte Observer reports, Tyrel Oates, age 30, wrote Wells Fargo CEO John Stumpf asking him to give each of the company’s approximate 263,500 workers a raise of $10,000. According to the Observer, roughly 200,000 of those employees were copied on the exchange.

Why did Oates demand such a hefty pay bump? He wants to reduce the nation’s income inequality.

In the full letter, which appears to have been posted on Reddit, Oates writes: “Wells Fargo has an opportunity to be at the forefront of helping to reduce [income inequality] by setting the bar, leading by example, and showing the other large corporations that it is very possible to maintain a profitable company that not only looks out for its consumers and shareholders, but its employees as well.”

After noting that Stumpf made $19 million dollars last year, Oates proposes his solution: “My estimate is that Wells Fargo has roughly around 300,000 employees. My proposal is take $3 billion dollars, just a small fraction of what Wells Fargo pulls in annually, and raise every employees annual salary by $10,000 dollars. This equates to an hourly raise about $4.71 per hour.”

“By doing this, Wells Fargo will not only help to make its people, its family, more happy, productive, and financially stable, it will also show the rest of the United States, if not the world that, yes big corporations can have a heart other than philanthropic endeavors.”

Oates told the Observer he currently makes $15 an hour processing requests from Well Fargo customers wanting advice on how to stop debt-collection calls. Despite working at the company for seven years, his hourly wage has increased by only $2 since the day he started.

The letter concludes with a plea for fellow employees to organize and stand up for themselves. “While the voice of one person in a world as large as ours may seem only like a whisper,” it reads, “the combined voices of each and all of us can move mountains!”

Luckily for Oates, while the CEO hasn’t (yet) responded to the letter, his employment doesn’t appear to be in danger. Oates’ manager has said he won’t be disciplined. “I’m not worried about losing my job over this,” Oates told the paper.

When contacted by the Huffington Post for comment, Wells Fargo would not address the letter’s text (which the Post confirms is authentic), but issued the following statement: “We provide market competitive compensation that combines base pay with a broad array of benefits and career-development opportunities for team members. Team members receive an annual performance and salary review. And all of our team members’ compensation levels significantly exceed federal minimums.”

MONEY pay gap

Why Microsoft CEO Satya Nadella STILL Has It Wrong on Raises for Women

Microsoft Chief Executive Officer Satya Nadella
Manish Swarup—AP

The exec has taken back his comments that we should count on karma to boost our salary, but that doesn't mean he gets what it means to be a female at work today.

Easy for a dude to say that women should have “faith that the system will actually give you the right raises as you go along.” Especially a dude who makes $7.6 million and sits at the top of one of America’s largest companies.

But Microsoft CEO Satya Nadella, who made that comment in answer to a question about how women should ask for a salary increase—in front of a room full of women at the Grace Hopper Celebration of Women in Computing on Thursday—at least seems to have realized the error of his statement.

On his blog last night, he acknowledged:

I answered that question completely wrong. Without a doubt I wholeheartedly support programs at Microsoft and in the industry that bring more women into technology and close the pay gap. I believe men and women should get equal pay for equal work. And when it comes to career advice on getting a raise when you think it’s deserved, Maria’s [Maria Klawe, computer scientist and moderator] advice was the right advice. If you think you deserve a raise, you should just ask.

Great that he owned the mistake. But what’s worse, the fact that he didn’t realize that women are paid 22 cents less on the dollar than our male peers—or the fact that he still doesn’t realize it’s not as simple as “just asking” for us?

Yes, We Pay a Penalty for Not Asking

Assuming you care remotely about women’s issues, you’ve seen the research showing that few women negotiate salaries. (By the by, it goes all the way up the ladder. Nadella’s fellow C-suiter GM’s Mary Barra noted at Fortune’s Most Powerful Women Summit that she had never in her career asked for a raise. The emcee then polled the audience on how many of them also had never asked, and “the majority of the conference’s high-powered female attendees raised their hands,” according to Fortune‘s Broadsheet.)

Our reticence has a compounding effect over our careers. By not asking right off the bat, Carnegie Mellon economics professor Linda Babcock has said, we leave lost earnings “anywhere between $1 million and $1.5 million” on the table.

But We Pay a Penalty for Asking, Too

Yet Babcock’s research found that we may be on to something with our sense of caution. Simply stating the case for why we deserve a raise doesn’t tend to get women to the same result as it does men. In fact, it can actually hamper our career progress.

For a study published in 2005, Babcock and Hannah Riley Bowles, a senior lecturer in public policy at Harvard’s Kennedy School, asked participants to watch videos of men and women asking for a raise. The guys and gals in the video used the exact same scripts.

The result? Participants liked the men and agreed to give them the bump in pay, but found the women too aggressive. While they gave her the raise, they did not like her. In particular, male study participants were less willing to want to work with the female negotiator.

We know that being well liked—a quality we women struggle with starting from the first grade-school birthday party we’re not invited to—is also key to getting ahead. So we’re caught between a high heel and a hard place.

Or, as Joan Williams, founding director of the Center for WorkLife Law, put it in The Huffington Post,

If women act too feminine and don’t ask, they end up with lower salaries. If they act too masculine and ask, then people don’t want to work with them. Women walk a tightrope between being too feminine and too masculine. Men don’t, which is one reason why office politics are trickier for women than for men.

So We Have to Give an Oscar-Winning Performance to Get What We Want

The research Babcock and Riley Bowles have done has found that women have to be more, well, “womanly” in their approach in order to get the raises and promotions that they deserve and come out the other side smelling like a rose.

You know—positive, solicitous, and putting others first. Less shark, more 1950s housewife.

Acknowledging herself that these findings are “depressing,” Babcock (along with Riley Bowles) concluded that being collaborative—trying to take the perspective of the company and hiring manager and using “we” statements instead of “I”—tends to be more effective than other approaches. They’ve also emphasized trying to be “authentic” by using language that feels comfortable.

That doesn’t feel the same as “just ask”—it requires us to act a part when what we simply want is for our managers to respect us as workers and people in a gender-neutral way.

We want to be able to walk in and say, “I brought in $2 million in business this year and am underpaid relative to my position,” and be better paid and just as well liked at the end of it.

You know, like a dude.

Related:
5 Ways Women Can Close the Pay Gap for Themselves
When She Makes More: How to Level the Financial Playing Field

MONEY Jobs

If Jobs Are Back, Where’s My Raise?

Empty pockets of businessman
Dude, where's my raise? Jeffrey Coolidge—Getty Images

Despite good jobs numbers, wages aren't growing much. The reason why is the biggest debate in economics right now

Today’s strong jobless claims data, which show that applications for unemployment benefits dropped again, is one reason to be cheerful heading into the Labor Day weekend.

Yet despite this, and the fact that the unemployment rate is now down to 6.2%, the economy still has this glaring weak spot: Workers aren’t getting serious raises.

Here’s how two important measures of wage growth have done since the recession. (The Brookings Institution keeps a running tab of these and other key economic indicators in the excellent interactive graphic here.)

fredgraph

Basically, what you are seeing is that pay to workers, whether measured as hourly wages or salaries plus benefits, has been running neck-and-neck with inflation of a bit under 2%. As Fed chair Janet Yellen pointed out in her recent speech at a Fed symposium in Jackson Hole, Wyo., wages are also growing less than workers’ productivity.

Why is this happening? Yellen, for one, likely thinks there’s some remaining “slack” in the economy. Employers are still wary about whether there’s growing demand for their stuff, and so they remain slow to hire. The low unemployment figures leave out a large number of workers who have become discouraged after a long time out of work. But if the slack explanation is right, as companies continue to hire, more of those labor-force dropouts will be drawn back into the employment pool. You won’t see companies under serious pressure to raise wages until that process has played out and companies start competing for a scarcer pool of job-seekers.

Yellen points to (though doesn’t endorse) another possible explanation. Many economists believe wages are downwardly “sticky”—even when companies want to cut costs, they’d rather lay people off than reduce the pay of the people they hang onto. That means that for people who kept working after the recession, wages were higher than they’d otherwise be. And now that the economy is (fitfully) coming back, maybe that means there’s also less room for wages to rise.

Another factor, of course, is that both corporate managers and workers are human, and people can take some time to adjust to new economic signals. Back in July, I sat down with a stock fund manager, who talked about what he was seeing going on at the companies he kept in touch with. More than five years after the financial crisis, he said, the corporate culture among top managers had changed. The people in the C-suite got their positions not by expanding their companies and finding great new hires, but by cutting costs. And they got used to a slack labor market. The manager used the specific example of truckers: You always know you can get a guy to drive a truck from your warehouse to your customer on a moment’s notice. So why worry about hiring more truckers?

As it happens, at the New York Times Upshot blog earlier this month, Neil Irwin wrote that this may be changing. A trucking company called Swift told investors it was having hard time finding enough drivers. The company says the problem is that there aren’t enough skilled people, but Irwin wonders if the problem is really that companies just aren’t paying enough. Trucker pay has fallen, in real terms, over the past decade. Irwin writes:

The most basic of economic theories would suggest that when supply isn’t enough to meet demand, it’s because the price—in this case, truckers’ wages—is too low. Raise wages, and an ample supply of workers should follow…. But corporate America has become so parsimonious about paying workers outside the executive suite that meaningful wage increases may seem an unacceptable affront.

The question now is, how strong does the economy have to get before employers are forced to change their thinking?

Related:
If You’re Looking for Work, the Outlook is Brightening
Why the Fed Won’t Care About Higher Prices Until You Get a Real Raise
What’s the Deal With America’s Declining Workforce?

MONEY hiring

This is the Easiest Way to Put $2,000 More in Your Paycheck

140826_CAR_BonusBuddies
Maybe you should wait to do this until after you've collected your bonus... Baerbel Schmidt—Getty Images

Companies struggling to find talented workers are increasingly paying their employees referral bonuses, a new survey from Challenger, Gray & Christmas reveals.

Raises are expected to be measly for most folks in the coming year, but a new survey out today reveals an easy way to get a bump up in your compensation: Recruit your friends.

As the job market rapidly improves, many employers are struggling to attract talent, according to the survey by outplacement firm Challenger, Gray & Christmas. Three-quarters of human resources execs polled said they were having difficulty filling open positions because of the shortage of skilled and experienced workers.

So, to unearth talent, Challenger reports that nearly 40% of employers are offering referral bonuses to encourage their own workers to send good job candidates their way. A survey in June by human resources association WorldatWork put the number even higher: That survey found that 63% of companies had referral bonus programs, up from 60% in 2010.

If you work for one of these firms, the payoff can be pretty juicy, as you can see here:

image (1)
Source: WorldatWork

Of course, these are only averages and for one level of position. Your take can be higher if you work in a complex field or position for which there is a lot of demand. For example, in Detroit, some accounting firms are paying workers as much as $5,000 for CPA referrals, Crain’s Detroit Business recently reported.

One-third of all hires come via internal referrals, according to recruiting consultant CareerXRoads. Hiring managers like internal referrals because they are a less costly way to find workers, and those hires have better retention rates. People already on staff have a good sense of the job and are more likely to reach out to passive candidates who might not be in the job market but would move for the right opportunity.

The bonus isn’t the only way you can benefit from making a good referral. Workers who find talent for hard-to-fill jobs are also valued as problem solvers.

Just don’t give that referral lightly. If the person doesn’t work out, it can reflect poorly on you. And you’ll typically need the person to stick it out in the job to collect your loot—the majority of companies don’t pay out the bonus until the new employee has been on the job between one and a half and six months, according to WorldatWork.

MONEY The Consumer Economy

The Real Reason You’re Not Shopping at Walmart

Female shopper in Wal-Mart store aisle
Patrick T. Fallon—Bloomberg via Getty Images

Despite the improving job market, workers still don’t have that much walking around cash, which means they have less to spend at retailers.

The summer has not been kind to some of America’s largest retailers.

Traffic at Wal-Mart’s U.S. locations, for instance, was down, while sales at stores that had been open for at least a year failed to grow. Macy’s lowered its full-year sales growth projection, and sales at Kohl’s dropped 1.3% in the last three months. Nordstrom’s earnings per share were basically flat.

If you’re noticing a trend, that’s because there is one: Merchants are struggling.

The Commerce Department recently announced that retail sales decelerated in July for the fourth consecutive month, despite the fact that more workers are finding jobs, and the unemployment rate is hovering around 6%. So what’s going on?

Well, one potential answer is that you, the consumer, just don’t have that money to spend. Yes, employers have added more than 200,000 workers a month to their payrolls since February. And yes, the unemployment rate has dropped to 6.2%—about the same as in September 2008. But workers really haven’t seen the benefits of job growth in their bottom lines.

For instance, take a look at real disposable income for U.S. workers. The year-over-year change in disposable income is only 3.9%, below pre-recession levels. “While stronger job growth has played a role in sustaining consumer spending, the slower income growth has served to keep a lid on real spending activity over the past several quarters,” per a recent Wells Fargo Securities economic report.

disposable income

 

Another way to gauge the plight of workers is a metric called the Employment Cost Index (ECI), which is published by the Bureau of Labor Statistics. The ECI measures what it costs businesses to actually employ their workers—so, wages, salaries and fringe benefits like medical care. Before the Great Recession struck in 2007, the ECI gained nearly 3.5% over the prior 12 months. Since the economic recovery, however, employee costs have not risen above 2%.

wages
BLS

Rising wages are a lagging indicator; people only see raises after the jobs picture improves. Which is happening now. Fewer people are filing unemployment claims, and the number of job openings continues to nudge higher. (And traditionally, job openings have an inverse relationship with wage gains.)

So, hopefully, sometime soon demand will pick up, businesses will start giving their workers substantial raises, and those workers will go out and spend their newfound dollars. (After all, my spending is your income.)

What’s good for the economy is sometimes what’s good for Wal-Mart.

MONEY Raises

7 Reasons It’s a Great Time to Ask for a Raise

John Gillmoure—Corbis

The sluggish job market is finally kicking into high gear, and that's good news if you are itching for a decent raise this year.

Stocks have been on a bull run since 2009, corporate earnings are soaring, and the housing market is surging. Now the latest economic reports show that the sluggish job market is finally catching up to the rest of the economy.

If you’ve been thinking about making your pitch for a raise, here are seven reasons why now might be the right time.

1. Job openings are highest in more than a decade. After rising for five straight months, the number of available jobs hit 4.7 million, the highest since February 2001, according to the Bureau of Labor Statistics’ Job Openings and Labor Turnover Survey, out Tuesday.

2. Competition for jobs is less stiff. There are two unemployed workers per job opening, down from three in the fall and seven during the height of the financial crisis.

3. The number of people quitting jobs—a sign that workers are more confident in landing a new one—is at 2.5 million, the highest since June 2008.

4. The number of jobs being created rose by more than 200,000 for the sixth straight month in July, the longest string of gains since 1997. Meanwhile, unemployment is the lowest since 2008, at 6.2%.

5. Raises are bigger. According to Mercer’s 2014/2015 US Compensation Planning Survey, the average raise in base pay is expected to be 3.0% in 2015, up slightly from 2.9% in 2014, 2.8% in 2013, and 2.7% in 2012. Workers rated above average, a group that accounts for 36% of the workforce, will get salary increases between 3.7% and 4.8% this year, according to Mercer.

6. Temp jobs are turning into full-time gigs. Conversions (giving full-time jobs to temporary workers) are at a three-year high, according to staffing agency Manpower.

7. Employers are really worried about losing talented workers. Turnover is up dramatically: 51% of employers are seeing workers leave, vs. 30% in 2012, according to OI Partners. Nearly three-quarters of employers say they are worried about losing highly skilled workers.

Of course, some of the optimism depends on what industry you’re in. For example, the average raise in the energy sector is projected to be 3.5%, vs. 2.8% for people who work in consumer goods, according to Mercer.

And while the picture is brightening for the long-term unemployed—the number of people without a job for six months or longer fell to 3.16 million in July, vs. 4.25 million a year earlier—it remains twice the number it was before the recession in 2007.

Still, economists are optimistic that salary increases, absent from the rebound in the job market, will finally kick in.

Wage growth is likely be “one of the big stories over the next 12 months,” says Capita Economics chief U.S. economist Paul Ashworth in his latest research note. Among positive signs: a sharp increase in the proportion of small businesses saying that they are planning to raise compensation. And a rising proportion of households in the Conference Board’s consumer confidence survey saying that they expect their incomes to rise, while fewer are saying they expect their incomes to fall.

Tomorrow: We’ll tell you the right moves to make to land a raise as the job market improves.

MONEY Careers

What I Wish I’d Known About My First Paycheck When I Was 22

Tug of War
When you get your first job offer, you can dig in and ask for more (nicely). Paul Kelly—Getty Images/Flickr Select

Earning every penny you're worth when you join the workforce can pay off for the rest of your life. So don't hesitate to negotiate.

For many people, negotiating pay is not a welcome task. In fact, almost half of U.S. workers simply accept the first offer. And when you’ve just graduated from college and are interviewing for your first real job, your focus is probably on landing the job, not demanding top dollar.

I’m here to say that more often than not it’s worth asking for a little bit more. I’ve been there, and if I could sit down with my 22-year-old self, there are a few things I’d tell her about that first salary negotiation.

Employers Expect You to Negotiate

The greatest fear I’ve heard people express is that a job offer might be rescinded if they try to negotiate the pay. As long as you’re respectful and reasonable, that’s very unlikely.

The prospective employer has already expressed interest in hiring you. As in any negotiation, they expect you to do just that—negotiate. It’s okay to simply ask if the salary is negotiable or to suggest a number that is slightly higher than what’s proposed. Most employers will have a salary range in mind when they make you an offer, not a hard-and-fast number. If they are first to float a figure, they usually won’t start at the top of that range.

The best thing you can do for yourself is come to that discussion prepared so that you know what an appropriate counter-offer would be. Do your salary research ahead of time. You want to know the potential pay range based on the job title, city, company size, and industry, as well as what you bring to the table—your education and any relevant experience. Negotiating blindly is not a great plan. Proposing a salary number that’s too high or too low for the position just indicates that you haven’t done your homework.

Your Salary Will Level Out Around 40

Typically, your biggest opportunity for pay increases is in the first 20 years or so of your career, so keep negotiating well. When PayScale delved into the data, we found that pay essentially goes nowhere after age 40, once you account for inflation. Your early career is when you have the most opportunity to rise up in the ranks.

Once you’ve reached a certain level in your chosen career, meteoric growth just isn’t as possible as it was when you were starting out. Additionally, even if you continue to see pay increases in your later career, if your raises are not keeping pace with inflation, you may not be able to stretch your paycheck any further year after year. In fact, it could be shrinking.

Not Speaking Up Now Means Working Longer

I know retirement seems a long way off, but the earlier you start considering it, the happier you’ll be later in life. According to the 2013 Wells Fargo Retirement Study, 34% of the middle class expect to work until they are at least 80 years old because they will not have saved enough for retirement.

You don’t want to be one of those people, do you? You want to be in the group that planned early so you can retire in your sixties and travel the world.

Even a small difference in starting salary could mean some serious money over the course of a career, according to a recent study by researchers at George Mason University and Temple University. The study concluded that “a 25-year-old who negotiated a starting salary of $55,000 will earn $634,000 more than a non-negotiator who accepted an initial offer of $50,000” (assuming a 5% average annual pay increase over a 40-year career.)

Just remember to invest that extra $5,000 in a 401(k) plan or other retirement fund, especially if your employer offers a 401(k) match. Your 80-year-old self will thank you.

Lydia Frank is editorial director at PayScale.com, a site that provides on-demand compensation data and software to employees and employers.

MONEY Raises

Why You Might Get a Raise Soon

140618_money_gen_12
iStock

Good news for workers: Employers think the future is bright

If you’re looking for a raise — or a job — some good fortune might be coming your way. In the second quarter of this year, more employers reported rising wages and expanding payrolls, according to a new survey from the National Association for Business Economics. And businesses expect the economy will keep growing. A quarter of survey respondents now predict that real GDP will go up more than 3% next year.

For its quarterly business conditions survey, the NABE polls its members, which include business leaders, consultants and economists in a range of industries. They say they’re feeling more confident about the state of the economy — and that’s good news for workers.

Ken Simonson, chief economist for the Associated General Contractors of America, says as sales have gone up, businesses have finally needed to hire more employees to keep up with demand. Plus, now that Congress has averted a series of fiscal crises, employers think the economy will continue to grow, so they’ve started making investments again.

That includes investments in labor: This quarter, 43% of NABE’s respondents said their firms offered raises. That’s up from this time last year, when only 19% of respondents saw higher pay. A third of the respondents expect their businesses will raise salaries going forward. Also, 36% of respondents said their firms hired more people this quarter, and 37% expect their businesses to increase payrolls over the next three months.

“Employment has been rising, the unemployment rate has been coming down pretty sharply, so there’s no longer that deep bench of experienced workers,” Simonson says. “Increasingly, companies are having to pay a premium in order to have the best workers, to get anybody who has gone off to a competitor.”

The bad news? Overall demand for workers is still pretty low. Only 22% of respondents said they have a shortage of skilled workers. Compare that to before the recession: In January 2006, 44% of respondents needed more skilled workers.

But while the labor market remains slack, Simonson thinks the trends are positive.

“We’ve been hearing for the past year about companies having trouble finding workers,” Simonson says. “I do expect that at some point this year, we’ll see an acceleration in wage increases.”

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