Raise your expectations and narrow the pay gap

When it comes to salary negotiations, Otegha Uwagba follows a rule of thumb: as a young woman, ask for 20 per cent more than you would instinctively judge to be fair. You will often discover that the “fair” amount is more than you thought.

Over time, the 27-year-old notes, women tend to be undervalued by employers in terms of earnings — or, perhaps more important, they undervalue themselves.

“Asking male peers, I’m always blown away by how much more they ask for than I usually do,” says Ms Uwagba, a brand consultant and author of Little Black Book, a career guide for women.

“It says a lot about the psychology around women in the workplace that they are conditioned to expect less. When you have a new job offer is [when] you have the most power.”

Driving a hard bargain with prospective employers remains important for a generation of young women seeking to help close the gender pay gap once and for all.

Rising numbers of women in higher education, together with equality regulation and maternity rights, have brought incremental but notable progress on pay disparities. In the UK, the gap has narrowed for each consecutive cohort in their 20s since the early 1900s, according to the Resolution Foundation, a think-tank.

When you have a new job offer is [when] you have the most power

Otegha Uwagba

When baby boomers — people born in the couple of decades after the second world war — were in their 20s, the gap averaged 16 per cent. However, for Generation X — born between the mid-1960s and 1980 — it narrowed to 9 per cent, according to Resolution, whose figures show a gap of about 5 per cent for today’s millennials.

Despite the progress, the data imply young women will be hit harder later in life: the gap still begins to open up for women in their 30s through to their 40s, a trend that has not been eliminated in even the most socially progressive countries.

One factor to be addressed is the “expectations gap” alluded to by Ms Uwagba. A survey of graduates by recruitment website Totaljobs in 2016 found that across all roles and at all experience levels in the UK women still have lower expectations than men on salary.

Women also undersell themselves to prospective employers, Totaljobs found, expecting a pay rise of £3,241 on average when applying for a new role, compared with £4,107 for men.

Typically, this starts from the outset of a woman’s career, says Professor Christine Naschberger of the management department at Audencia Business School in Nantes, France. Female graduates in France expect to be paid 15 per cent less for their first salary than male graduates, she says. Their male counterparts tend to work for sectors that pay more and to choose jobs that pay more. “Young women need to be aware of the gender gap [because it] starts early, right after graduation,” she adds.

Young women need to be aware of the gender gap [because it] starts early, right after graduation

There are practical steps young women can take to combat this, such as doing research before a pay discussion.

Any young woman will find gender pay gapsvary by sector, depending on factors such as female representation at senior levels and in part-time roles. It is the programmes that a particular sector or company has set in motion to address gender imbalances that are more important, say professionals who focus on diversity.

“Understand the broader market data for pay, know the market average for your role,” says Mark McLane, global head of diversity and inclusion at Barclays, the UK bank. “It’s about being well informed — [about] the company, its culture and its approach to compensation. [Ask yourself:] what are my expectations?”

Still, it can be a sensitive process. A 2017 report by consultancy McKinsey covering 222 US companies found that men had to negotiate less than women did to get what they wanted. By contrast, when women did negotiate, they were far more likely to receive feedback labelling them “too aggressive” or “bossy”.

The wider pay gap in older age brackets can also be attributed to the so-called motherhood penalty, say some commentators, whereby women take on the bulk of caring responsibilities for children, hurting their pay and progression. A 2013 survey by Washington DC-based think-tank Pew Research Center of 810 young people found that 59 per cent of millennial women believed being a working parent would make it harder for them to advance their career, compared with 19 per cent of millennial men.

Dame Helena Morrissey, head of personal investing at Legal & General Investment Management and author of A Good Time to Be a Girl, urges young women to seek out mentors in the workplace who can advise on pay concerns.

The onus should not be solely on women, she adds — companies still need to step up to ensure female talent is appropriately rewarded.

“If women strategise about their career, know they want to position themselves, get the visibility and get given the projects that will put them in a good light, then the company also needs to make sure that they have a situation where those people will then be recognised,” she says.

Similarly, Dame Helena would like employers to offer men more options on flexibility in the workplace and parenthood.

Men can have quite “straitjacketed expectations about their role”, she says. “We can approach things somewhat in a less binary way — [not] ‘this is somebody’s role, this is somebody else’s’. We need to think a bit more boldly.”

The author is an FT companies reporter in London

Have you been paid differently from a colleague because of your gender? We want to hear from you. You can reach us securely using this form or by emailing laura.noonan@ft.com