09: The 3 biggest mistakes women make with salary negotiation when making a career change

It can feel like you’re starting over when you’re making a career switch. Perhaps you’re thinking that you’ll for sure have to take a pay cut to switch industries or professions. This is a common assumption for women.

Here to set us straight is Anna McDonnell Dowling, the CEO and co-founder of the f school, an online platform that teaches women the life skills that are not taught in school. Her mission: to equip women with tools they need to live more empowered lives. One of these tools is salary negotiation. 

In this episode, Anna explains the 3 biggest mistakes women tend to make when negotiating a starting salary as part of a career switch.  She teaches us how to prepare both verbally and physically for the negotiation, how to counteroffer that initial starting salary, and how to handle common roadblocks, such as, “It’s not in the budget.”  She also tells us about her free online class on salary negotiation, where you can get even more help. To date, the f school has taught close to 1,500 people in over 50 countries!


Free online class for women: How to Negotiate a Higher Salary Without the Fear of Hearing ‘No’
www.thefschool.com/salary

Music credit: TimMoor from Pixabay

Podcast info:
What's your career switch? What do you think about this episode and the show? Tell us at careerswitchpod.com. Follow us on Instagram, Facebook, and LinkedIn.

Transcript

Lixandra: Hi everyone, I'm Lixandra Urresta, and this is Career Switch Podcast. This show is here to encourage you to take action with whatever career change you've been considering or are working on. In some episodes, I talk to people who've made their own career switch, whether by choice or circumstance. They share the good, the bad, and the truth about their journey, including what worked for them and what didn't. In other episodes, I speak with experts who offer their best career advice on issues that can come up during the process of making a career change. After all, it takes guts to switch things up, and it's not easy. However, it is possible. So. I hope you hear something in this episode, an idea, a suggestion, a piece of wisdom that'll spur you into action with your own career switch, whether it's taking that first bold step or trying something new. Welcome. I'm glad you're here. 

When I was making my career switch out of publishing, where I had worked for over 20 years, I assumed that I'd have to take a pay cut to break into a new industry. After all, I didn't have direct experience in a new field, so I'd have to start over. It sounded logical to me. Little did I know that I was making one of the three biggest mistakes regarding salary among women who are making a career switch, assuming they're starting over and therefore they need to take a drop in pay. Perhaps you're thinking this now, or maybe you're one of the many women who had to leave the workforce during the pandemic. Now that you're looking to make a career switch and return to work, you might be thinking that accepting a lower salary will be the way to get back on track with your career. 

Here to set us straight is Anna McDonald-Dowling, the CEO and co-founder of The F School, an online platform that teaches women the life skills that should be taught in school but simply aren't. Her mission with The F School, which stands for The Feminist School, is to equip women with tools they need to live more empowered lives. One of these tools is salary negotiation. In this episode, Anna explains the three biggest mistakes women tend to make when negotiating a starting salary as part of a career switch. She teaches us how to negotiate higher salaries without the fear of hearing no. She'll also tell us about her free online class on salary negotiation on the F School website, where you can get even more help. 

Hi, Anna. Thanks so much for joining us. I'm so excited about this episode, especially since many women are currently returning to the workforce after having to take time off during the pandemic. Let's start with the biggest mistakes. When I was trying to switch industries after my layoff from magazines, my personal mindset was that I would have to for sure take a pay cut to break into a new industry since I had no direct experience in it. Is this a common mindset about salary among women who are making a career switch?

Anna: Yeah, exactly what you just described is extremely common for women who are either re-entering the workforce or who are switching careers, is that they're kind of starting from scratch. It's like they're joining the workforce for the first time. What we see is women who are super accomplished, really experienced, they're deliberately underselling themselves because they either think that's what's expected of them or they think that it will help them get the job, especially when it comes to switching careers This really comes back to the way that women are kind of conditioned in society to be really small, to be very accommodating. So asking for more money is definitely something that's going to put our back up. And it's, it's not something that we're used to doing.

Lixandra: In your salary negotiation class, you debunk the idea of I'll get paid what I deserve. You say, this is a myth. There is no such thing as getting paid what you deserve. Can you elaborate on that?

Anna: It's something that I see a lot when it comes to salary negotiations. Women are always told, oh, go after what you're worth. Ask for what you deserve. For me, that's actually quite a damaging concept. And the reason I say that is because if you're tying money to your self-worth, what happens if you don't get the raise? What happens if you find out that, you know, your best friend is making 30 grand more than you're making? It's those kind of things that can be really damaging to our self-confidence. If you're tying that number to your self-worth, you're going to feel like crap, basically. And so what we really want women to understand is that instead of going after what you think you deserve or what you're worth, ask for what you want. Ask for what the market value is. Ask for what you need. What is your actual bottom line that you need to live a really happy and fulfilling life? And just move away from this concept that money is tied to your self-worth because you are invaluable. You know, there is no dollar amount that you can put on your experience and your value as a person and as an employee.

Lixandra: I remember when I was freelancing at a company in a new industry and I thought, once there's a full-time opening, I'll be a shoo-in because I'm already working there. They'll fall in love with me and see that I'm a hard worker. I'm also going to save them time and money because they won't have to interview a ton of people to fill the position. That's how I thought I could get my foot in the door in a new industry. What do you say about my thought process?

Anna: I would say that's the second biggest mistake that women tend to make when it comes to switching careers is I'll get my foot in the door. They'll see how lovely I am. They know I'm not, you know, a psychopath and and my work will speak for itself. The problem here is that if you don't negotiate a better starting salary at your new job, the impact of that will stick with you for the rest of your career. We're talking potentially hundreds of thousands of dollars that you could have for your retirement or for your kids or for your holidays, whatever it is, just because you failed to negotiate like a tiny 5% or 10% increase on your starting salary and then renegotiate a modest increase every year or every two years after that.

Lixandra: How does that 5% or 10% initial salary negotiation impact the rest of a woman's career?

Anna: that five or 10% increase on your starting salary is going to compound every year. And all of the raises that you get on top of that year after year are a percentage of that starting salary. And so failing to negotiate in the very beginning has a massive impact on your lifetime earnings. I actually read a stat recently that said that women in the U.S. are entering retirement with about $100,000 less than men on average, which is quite shocking. And something like one in five women in the U.S. don't have any retirement savings at all. I think that really speaks to the way that we think and talk and act about money. And, you know, we've kind of been taught to be passive participants when it comes to our finances, when it comes to our salary. So this stat isn't really that surprising. And I will say that, obviously, there are many reasons why women are earning less than men and why they're entering retirement with less money than men. It's not our fault. We live in a patriarchal capitalist society. But that doesn't mean that you're totally powerless in this. So just really thinking about if you don't negotiate those small increases in the beginning and then going through your career, That's potentially $10,000, $20,000, $30,000 every year. I think in some industries like academia, it's almost a million dollars in the difference between women and men's careers and their earning potential over like a 40-year career. So yeah, it has massive impacts.

Lixandra: OK, so now that we've covered two of the biggest mistakes, the third one is coming up, and the consequences of not negotiating a starting salary, let's get into the nitty gritty. Let's say you're a woman who has received a job offer in a new profession or industry, so you're making your career switch. How should you negotiate your starting salary?

Anna: So the best advice that I would give is to be prepared with a salary range when you go into that conversation. Always prepare a range based on what your bottom line is, what the market value is and what it is that you'd actually just really love to be earning. And just remember, when you go into a negotiation, the first offer that somebody gives you is very rarely the highest amount that they are willing to pay you. So people are expecting you to negotiate. And if you speak to a hiring manager or HR person, they will always tell you that they have a range. And so you should have a range as well. To prepare this range, you know, just do some very basic research, like what is the market value for this position in your city? That's very important. If you're working in finance in New York City, it's going to be a very different salary range to if you're working in some kind of rural town. So do your research, speak to other people in your industry. That's that's one of the key ways that we can get really specific on what this range should be. and speak to men and speak to women as well, quite often you'll find that you've probably been underpaid or else you're going in there with the range that is just not accurate.

Lixandra: Now, people in general can be very hesitant about talking about their salary. How can you get them to share this information when doing your research?

Anna: Yeah, there's there's a few ways you can do this. I would I would really keep these kinds of things as informal as possible. So you can, you know, tell somebody that you've seen a job posting and this is what the company is offering. And do you think that's a fair salary? You can also tell them that you're thinking of asking for between this number and this number, like, oh, I'm going for this new job and I'm thinking somewhere between 70 and 90. Like, what do you think? Someone with my experience, where do you think I would fall within that? and just asking them as a peer and as an expert in the field. And the reason we always say to ask men as well as ask women is because quite often if you're only going to your female colleagues or your female peers and talking about salary with them, we know from all the research tells us that women are statistically getting underpaid. And so it's really important to make sure that you're asking people other than women in those scenarios. So, yeah, like I mentioned, just keep it really casual. If you feel comfortable with them, you can share what your salary is and ask them if they think that's fair. So you don't have to outright say, tell me what you're making. You can keep it super casual and you can do it in a kind of indirect and very friendly way.

Lixandra: What should women keep in mind about the actual dollar amount that's on the table?

Anna: Remember that salary is just a number that somebody is agreeing to pay you to come and show up for five days a week for eight hours a day. It's not an emotion. It's not tied to your self-worth. This is a business transaction. It's a business conversation.

Lixandra: So in my situation, it took me 14 months to get a full-time position in a new industry. I was so grateful and I felt so lucky to get the offer because I was making my career switch. Right. However, according to you. That's also the wrong mindset when approaching a salary negotiation, and that's the third mistake women make, thinking they're the lucky ones in the situation. How should we be thinking instead?

Anna: get out of the mindset of thinking that you don't have any power in this situation because you've gotten to the stage where they've offered you a job and you're talking about salary. They don't want to start this process all over again. You have power in that situation because they want you and recruiting is very expensive and timely and they've already done all of that. So step into that power. it's really important to remember that they are expecting you to counter offer them. And it's it's completely professional and there's nothing wrong with doing that. Even the fear of talking about money can make us feel a little bit gross and like we're being greedy or like we're not grateful. Counter offering or asking for a higher salary than you were initially offered does not mean that you're not grateful. You can definitely show gratitude while also asking for a higher figure.

Lixandra: Your salary negotiation class also covers preparing your verbal and body language. For example, you teach to not say thank you after receiving the initial offer. Is this a way to prepare verbally?

Anna: This is all to do with your body language, your sense of power, your sense of what you're kind of holding in the moment. If you're saying thank you, it's a way that we kind of give away some of that power and give away some of that authority. My advice for any woman who is in a salary negotiations when you're offered that initial starting salary is to always respond with, that's a great place to start. It's such a beautiful little line because you're retaining your power. You're keeping the conversation open. It's very polite, but it's quite strong. It's worked in so many situations that we've seen women go through our course that it's a really, really golden one.

Lixandra: Anna, salary negotiation can be so uncomfortable. I'm sure it makes people cringe. What can someone do to relieve some of that discomfort?

Anna: Practice, practice, practice is so important. Ideally, you want to practice with someone who is maybe a friend or even a work colleague that you that you have a good relationship that you really trust. So it feels a little bit uncomfortable so that you can really practice on controlling the tone of your voice, taking a pause, taking a deep breath and thinking before you respond. You don't have to say yes or no straight away in the moment. You can always take your time.

Lixandra: By taking your class, I realized that I actually touch the back of my neck a lot and I scratch the top of my head. I would not want to do these things during a salary negotiation, especially now when job offers are being done over Zoom. So what about prepping your body language?

Anna: Practice not wringing your hands, not flicking a pen, not tapping your foot, not crossing your legs, whatever it is, all of those kind of movements that we do when we're nervous. We do them because we're nervous, but they also have the opposite effect. When you make yourself small, when you're when you're fidgeting, those kinds of behaviors will affect us internally as well. And they will actually make you more nervous because your nervous system will think, oh, I'm under attack. So it's really important to just practice as much as possible. Practice in your daily life, any situation that makes you feel a little bit uncomfortable, just really pay attention to what you're doing with your body, with what happens to your voice. Does your voice go really high when you get nervous? And just do those things every day and it will make the salary negotiation process much easier.

Lixandra: OK, let's talk about some roadblocks when negotiating. So you get that initial offer and you make a higher counter offer, a range, like you said, what if the response is it's not in the budget? This was a common response that I got whenever I tried to negotiate in publishing.

Anna: Yeah. The budget one is probably the most common that you're going to hear is that we've already set aside a certain amount of money for this position and it's too late to go and change it. I would say the best case scenario here is that you come away from that conversation with both of you agreeing that your desired salary will be counted into the next annual budget. And so you can accept that starting salary with the agreement that next year their budget is going to take into account what you actually want or need to be earning.

Lixandra: Another roadblock. What if you go back and forth and they do raise the initial offer. However, the response is this is the most we pay for this position. Are you then stuck since supposedly they're offering the highest salary for that job.

Anna: In this situation, there's a couple of things that you can do. So first of all, you can ask them, if I did accept this job, what would it take to get me up to the range that I want to be at? And asking for really clear objectives from them is a great way to know that you're going to be able to secure that salary, you know, further down the line. And if they're not able to give you anything, then that's really good to know. Knowing is better than not knowing. Knowing that they're never going to be able to meet your salary expectations is really important. And at this point, you can decide, is their highest offer enough to meet my my needs and my wants? And what else can I negotiate? You know, one of the one of the mistakes that women make is is only focusing on salary. But there's so much that you can negotiate besides salary. You can also negotiate extra paid time off. Are you getting married in a year's time? Can they give you extra vacation for your honeymoon, like paid time off? That has an actual dollar value. Are there career development opportunities that they're willing to negotiate? Can they give you a bigger professional development fund? And then once you do the professional development, because you're new in this industry and then you've completed all the courses and you're more qualified, then you have more reason to negotiate because you're more qualified now. It's a win win situation. Can you negotiate a flexible schedule? You know, there's there's so many things. Switching careers in particular is a really unique opportunity. to kind of craft this lifestyle that you want for yourself and this work life balance that you want for yourself. So looking at it holistically, not just to do with with salary, but what can you negotiate for yourself as a whole? What about a signing bonus? Absolutely. Signing bonuses, performance bonuses. It's it's really limitless. Like just if you if you just really think about what would improve your quality of life and what would make it really worth it for you to take this job, ask for it. The absolute worst they can say is no.

Lixandra: Plenty of women have left the workforce this past year due to the pandemic. Now that many are returning to work and looking to make a career change, how should these women address the time they spent at home in regards to salary? I'm sure some may be thinking, I'll just have to take a lower salary or whatever I can find to get back on track with my career.

Anna: My advice would be to try not to make assumptions. Base these decisions on what the market value is and not what you think somebody is going to want to pay you individually as a person. And before you go ahead and kneecap your earning potential, do your research. Because they've advertised for this position on the assumption that they're going to be paying within a certain range based on what the job is, based on where you're living. And so why would you go under that? Why would you try and get them to pay you less? And if you've taken time off to mine children or because you get laid off, talk about your lived experience. Like, you know, what has this time away taught you? What skills have you learned during this time? Did it did it grow your passion for this industry that you're going into? And I think it's becoming more and more acceptable for people to have gaps in their employment history. And it's best just to talk about it, you know, be professional, but be honest and use it as an opportunity to show them how much this new career would mean to you and how hard you're willing to work for it. But definitely focus on what the going rate for the job is. And yeah, just do your research and remember that it's not tied to to your worth as a person, but it's tied to an actual market value.

Lixandra: Is it market value based on experience? And when you're making a career switch, you may not necessarily have experience. So can you still use the market value?

Anna: you can 100% still use the market value. Market values will always come with a range as well. And generally, as people get more annual experience and as they gain more skills and more seniority, they'll move further up the range. It's important to remember that you are not entering the workforce for the first time. And so even if you've been, I don't know, a teacher for 10 years and you're moving into finance, there are transferable skills. It might not seem like there are, but there are 100% transferable skills that will make it so that you are not starting from a kind of an intern or a junior position. It's important when you're going into negotiations to always be kind of asking for more than you expect in a certain sense, because this is what a negotiation is. It's kind of coming in and going higher and then bringing it up and bringing it down. And this kind of like seesaw effect happens. And you can't do that if you are if you're coming in at the absolute lowest number in that range. You're really taking away all of the power you have in that situation.

Lixandra: Wow, we've covered so much in this episode, but there's so much more that we can learn in your online class. Tell us about the F school and the salary negotiation class that you offer.

Anna: I co-founded The F School back in 2018 because myself and my business partner really saw that there was a fundamental lack of what I believe to be life skills. Women are kind of going into work and into school and into life without having these very fundamental skills to get them through. And so this is why we created The F School. It's to give women kind of concrete steps that they can put into action every day to live more empowered lives. One of those skills that our community asks for a lot is help with salary negotiations. And so here we are. But if people are interested in learning more, then you should check out our free class on how to negotiate your salary without the fear of hearing no. In that free class, we break down all of the big mistakes and the steps that women can take to overcome them. So you can access the free class at the fschool.com forward slash salary.

Lixandra: Thanks so much, Anna, for all the info that you shared with us. Special thanks to Anna McDonald Dowling for being our guest today. If you want to take the F School's free online class for women called How to Negotiate a Higher Salary Without the Fear of Hearing No, go to thefschool.com slash salary. 

You can find links to the resources mentioned in this episode and more helpful information in the show notes and on our website, careerswitchpod.com. While you're there, join our mailing list and follow us on Instagram and Twitter at careerswitchpod. So what's your career switch? Are you excited to take action after listening to this episode? Tell us at careerswitchpod.com. We'd love to know, along with any feedback you have about the show. We're a new podcast, so please rate, review, and share with your friends and colleagues. It'll help get the show out there. Thanks for listening today. Till next time.