Why Women Must Ask (The Right Way)

Few Stanford Graduate School of Business MBA students would argue that Professor Margaret A. Neale is a powerful woman. At over six feel tall, even my male classmates would be intimidated to negotiate with her. And it’s not just because she often calls out students’ “sub-optimal” negotiation strategies in front of the whole class—it’s because she’s clearly a master negotiator .

Maggie, as her students know her, starts her two-week, highly sought-after Negotiation seminar by introducing people to the cost of not negotiating—which could be years of additional work to make the same salary as colleagues who negotiate. Unfortunately, women suffer the most from this—which is why Maggie spends much of her time outside of the MBA program, co-directing the Stanford GSB Executive Program for Women Leaders.

Personally, my most interesting moment in the class came when I was assigned to negotiate on behalf of constituents and I was able to play the mediator. It was also my best negotiated outcome of the semester, and that’s no coincidence—as I learned, women often do best in representative negotiations.

I recently sat down with Maggie in her Stanford office, me on a low chair in front of her packed desk, her towering over me on a blue medicine ball. Read on for the scoop on why women don’t ask—and what we can do to change that.

Why should women negotiate?

Linda Babcock did a study for her book Women Don’t Ask where she found that there was a 7.6% difference between the salaries that women MBAs were getting and those that men were getting. A lot had been written on the comparable work issue already and much of the blame for the difference had been placed on organizations—basically institutional sexism.

Linda doesn’t say that doesn’t happen, but she does ask if there is something more. One of the questions she asked people is, “When you got your offer, did you attempt to negotiate?” She found that about 7% of women attempted to negotiate, while 57% of men did. Of those people who negotiated, they were able to increase their salary by over 7%. So, you can see that if women and men negotiated in similar proportions, that 7.6% difference would be cut dramatically.

One of the things I ask my students is: If you think of a $100,000 salary, and one person negotiates and gets $107,000, and the other doesn’t—what’s the cost of that? In a simple-minded way, some people say, “Is $7,000 really worth risking my reputation over?” And I agree, $7,000 may not be worth your reputation.

But that’s not the correct analysis, because that $7,000 is compounded. If you and your counterpart who negotiated are treated identically by the company—you are given the same raises and promotions—35 years later, you will have to work eight more years to be as wealthy as your counterpart at retirement. Now, the question is: $7,000 may not be worth the risk, but how about eight years of your life?