"When we're talking about compensation, we're actually talking about how different people position their self worth in the marketplace," says Jana Rich, founder of the Rich Talent Group — one of the leading recruiting agencies in the tech industry today. Over her 22 years in the business, she's seen hundreds of compensation negotiations, including patterns in who wins, who loses and why. "The way you choose to represent your self worth depends on a number of things, like how you were brought up, your past experiences, your gender, etc. Some of us are much more comfortable asking for what we want, and recognizing and amplifying our own achievements to get it. But those of us who aren't in this group shouldn't be penalized because that's not our style."
Rich is passionate about empowering and equipping people to get the comp they deserve — particularly women and underrepresented minorities who have historically been underpaid. But the persistent wage gap in the tech industry won't be fixed with a one-sided effort. It's going to take people on all sides of the table understanding and embracing diversity in the way people negotiate.
In this piece, Rich provides advice to everyone involved in comp discussions to be aware and do better. Remember, the stakes are high. When people are passed over for raises or brought in at the low end of their comp range, their entire career's earnings are likely to suffer, which widens disparities. For startups, this advice is especially critical. Taking a stand on this issue is a magnet for remarkable talent in Rich's experience, and starting with good comp hygiene early lays the foundation for healthy compensation bands at scale.
To tackle this massive and important issue, Rich takes a three-pronged approach: First, she offers advice, largely to women and underrepresented minorities (though it's applicable to anyone who may feel passive, anxious or discouraged about negotiations), to prepare for conversations with their managers. Second, she walks through exact scripts for successful comp discussions. And third, she advises startups directly on what they can do to accelerate toward pay equity. Whether you're a candidate or a company, read on to join this movement today.
RESEARCH YOUR RATE
"When going into a negotiation, always arm yourself with the right data — it gives you so much power," says Rich. "But I think that, for a number of reasons, women go into comp conversations without data on their side. They don't know what the people around them earn, or how and why they're rewarded or incentivized. This happens because they don't have transparent conversations with each other. But men do."
To get the best set of information possible, she encourages women to start with their most intimate circle and move outward.
Start with candid conversations with your friends and colleagues about what you all get paid.
A few pointers:
- Make sure you trust them — they should be friends or colleagues close enough to have your back and not be posturing. They should want the best for you.
- Always offer to disclose your own salary in exchange to de-risk the situation and equip them with helpful data too.
- Try to ask peers who are in the same or a similar job at a certain stage of their career.
- Don't just ask members of your same gender. Try to get at least two data points from men and women. While it's very important for women to build networks to share this type of data, you want to make sure your expectations also align with male compensation models. Otherwise, you might not see the big gap at your company.
Traditionally men talk to men and women talk to women about this kind of thing. We have to cross that chasm.
"For too long, this has been a taboo ask in our culture — but that only benefits companies, not people," says Rich. "Take the fear out of it and just be straightforward: 'Hey, it would be very helpful if you could share your compensation with me, and I will do the same for you.'"
Don't make it a big thing. If they say no, don't press. If they say yes, keep their confidence.
"This can be transformative," says Rich. "After business school, a male classmate and I ended up in very similar roles at different companies. He broached the subject with me, saying: 'Hey, I think we should talk about what we make.' I think he knew he made more than me, so this wasn't about benefiting him — he knew it would benefit me. And I'm so grateful. It really helped me understand my value in the market in a whole new light."
In her experience, men commonly have these types of exchanges, while women tend to be more nervous or worry about the social ramifications if someone makes more or less. "You have to position it as a win-win. The person who makes less shouldn't be embarrassed or feel less valuable. Frame it differently from the beginning: they stand to gain info they need to change things for themselves," she says. "The only candidates I've worked with who don't readily share what they make are the ones who are ashamed because they know they're getting less than they deserve. The better move is to get the information you need to make up the difference."
Take the time to have these conversations before asking for a compensation adjustment or when you're negotiating for a new role. Keep in mind variations that might be explained by seniority, geography or industry.
Move on to public and proprietary data sets.
Rich recommends looking at a site like Glassdoor as your next step. Don't just look up compensation data for roles you want next. Also take the time to add your own existing compensation. This makes the information richer for everyone. And keep in mind that Glassdoor is powered with limited data, so it's wise to look at and triangulate comp for roles at several companies in your sector that are at roughly the same size or stage and in the same region. That will give you the most accurate sense of your market rate.
Don't stop there. You want to have as many resources at your disposal as possible to back up the compensation you're asking for. For example, many venture capital firms run compensation surveys across their portfolio companies. They make this data available to companies as benchmarks. So, if you work at a VC-funded company, ask your manager whether any of your investors have compensation data reports you can see. Here's how Rich suggests asking: "Hey, I've been thinking a lot about my market value over the course of my career, and I hear that X investor we work with has a pretty great survey of that kind of data for startups. Do you think you could share that with me? It would really help me understand how I want to grow in this role." Make it clear you're not looking at new opportunities, and frame it as a chance for your manager to aid in career development. In a way, it's a test for how your company prioritizes transparency and its people.
"I firmly believe that in five years — or maybe even less — companies are going to be required to disclose compensation," says Rich. "In the meantime, this is how you can get unique visibility for yourself. And it will make a real difference in how confidently you can enter into any negotiation." Recruiters like herself are another great source for this kind of data, so if you're working with a recruiting firm, ask to see comp estimates for your industry in the process.
It's okay to ask. It's okay to share. If all of us adopted this attitude, we'd solve pay equity so much faster.
Don't assume startups know what they're doing.
Startup founders have varying levels of expertise when it comes to hiring and managing people. Some have none, so everything they do is guessed at or grafted from other companies. "In this area, startups almost always learn by example, and they have to make decisions so much faster. Sometimes there isn't foresight around compensation," she says. "There are fewer rules and less oversight. Someone who's doing the exact same job as you might be making 50% more for arbitrary reasons — like they had an offer in hand from Google, or there was a burning need to get them in the door at all costs. Startup comp tends to be very reactive on a case-by-case basis, so you end up with a lot of lumpy disparities. Don't assume they're right and you're wrong."
The lesson here? Don't trust that the people offering you your comp package always know better than you. Don't just accept where they anchor your pay range. The best companies will remain committed to paying market rate. Having that data on hand will let you drive the conversation.
Use new compensation laws to your advantage.
Now in several states, including California, New York and Pennsylvania, there are laws targeting pay equity. And there are two in particular you should be aware of:
- Companies can no longer ask candidates to state their current compensation. "They can ask you what your expectations are, but not actually what you're making," says Rich. "That way, if you're making much less than what the new role might pay, you won't miss out."
- Companies must now disclose compensation ranges for roles if a candidate asks. "A lot of people don't know that they should ask directly, so they don't. If you know a range, you can and should always ask for the upper bound."
These laws were designed to make change, but they're far from a silver bullet. Pay attention to these loopholes to get ahead in negotiations:
"A lot of companies are still guilty of guessing at what a candidate made before — particularly if they're coming from a large company like Google or Amazon where pay bands corresponding to each level are pretty well known," says Rich. "Watch out for this. Rely on the research you've done on market rate for the role you're interested in. If there's a disparity between that number and their offer, they might be making assumptions about your current or past salary. Stick to your guns and what you know you deserve."
The other issue is that companies disclosing pay tend to provide huge, unhelpful ranges, i.e. "This role will pay between $150K and $200K."
"When this happens, the behavior I see is that many women gravitate toward the middle of the range provided — they'll think $170K is a great outcome. So if that's the initial offer, they'll just take it," she says. "Most men, on the other hand, will fight for the full $200K, because now they know it's on the table. When also offered $170K, they respond with, 'Why am I not getting $200?'" The law requiring companies to disclose assumes that everyone negotiates the same way. Hopefully knowing this will encourage more women to go for the upper bound.
"These regulations are well intended, but don't rely on them to get you what you want," says Rich. "Instead, be aware of how many employers will apply them and how you, as a candidate, can ideally respond."
WIN IN CONVERSATION
Comp negotiations are brutal for just about everyone. They're uncomfortable, nerve racking, emotional and stressful. Over the last two decades, Rich has seen what works and what doesn't, and is here to offer the best advice from her experience — again, for women and underrepresented minorities in particular.
The first thing you should do is reframe your attitude about the conversation. Women more often assume that the interaction will be adversarial. "Most go in with the conclusion: 'I'm asking for something they don't want to give me.' That's not the right springboard," she says. "Let's say you're in the worst case scenario where your employer never wants to pay you more and doesn't think you're worth it — going in with this top of mind still helps no one."
The key is to turn it into a 'developmental conversation' that's more fluid than brittle. "You know when you're having a brittle conversation — you're scared and don't want to say the wrong thing, you feel like you have to make a big speech upfront about what you deserve and why and then wait in suspense for their answer. The ideal comp discussion is more of a healthy back-and-forth dialogue," she says. "Take as much fear as you can out of it for the other party. For example, if this is for a raise, start by saying, 'I'd really like to talk about my future because I'm committed to being here. I was hoping we could revisit my development plan.' Then pause. Give yourself a moment to breathe and hear what they say back. Success in these conversations is just as much about listening and learning."
Have your context prepared in advance.
In addition to data on your market rate, you need to have a well thought out and rehearsed explanation about why you deserve the pay increase. The same goes for negotiations on initial comp after a company has thrown out a number. "As I've seen it, successful negotiations aren't about fair asks or aggressive asks. It's about giving the context of why you're asking. And it's not enough to say that your peers are making X so you should too," says Rich.
There's a lot of existing research showing that women tend to downplay their own accomplishments more than their male counterparts. Even if women feel great about what they've done, they often default to being team-oriented, and will talk about what the team made happen rather than what they did in particular. "This is great most of the time, but when it comes to comp, you have to advocate for yourself as an individual. It can take practice to get comfortable with that."
Make sure that the increase you're asking for is tied to future contributions you're excited to make. Perhaps it's expanding the scope of your responsibility or hitting a stretch metric or building out your team. "You want the money to correspond to an increase in your value to the organization. Make it clear that it's your desire to stay with the company so you can deliver that value to them," says Rich. "I recommend setting up the conversation like this: 'I like it here. I see a path forward I'm really excited about, but I'm not sure my value is being fully realized right now. I'd like to talk about compensation, but also about the opportunity you see for me to grow in ways the company needs.'"
Additionally, you need to be careful about how you share the quantitative comp data you've collected. If you come right out and say, "My research from six sources says I should be paid $X," that's going to set your manager back on their heels. They might feel ambushed, get defensive and shut down.
The better way to broach the subject is: "In preparing for this conversation, I put a lot of thought into what's important to me. I wanted to share those goals and objectives with you. I also wanted to tap into a few external sources to give us a basis for talking about how a role like that might be valued within an org like this. I have a few data points — which I know are imperfect — but I'd love to share those with you." Emphasize that you dug up these numbers in an effort to come prepared and be helpful. Most leaders appreciate it when you come with possible solutions to their questions. This is no different.
Help them visualize what the new role would look like.
If you're asking for a raise in your current role, you want your manager to vividly picture what your elevated contribution would be like. What amazing results would you produce? What would this make possible for the company? How would the team itself be different because of your great work? "Take the time to walk down the road with them. Be descriptive of what your role would look and what the future looks like with you in that role," says Rich.
If you're going into a new job and negotiating for an initial package, you want to do the same thing. When asking for a bump in the offer, talk about what you're confident you can produce for the company. Acknowledge the baseline of what exists today and then very clearly describe what things look like after a year, a couple years, five years from now with you in the role and growing your talents.
"This is a much more positive way to negotiate — talk about what could be, rather than what won't be if you leave the company or decline the role," says Rich. "People don't respond to something that feels like a threat around your potential departure nearly as well as they do to, 'Hey, here's the great things I'm excited to do for you, and here's what I think that's worth.'"
Don't take anything personally.
Most people think their employers should offer them raises without even needing to ask. When this doesn't happen, they assume their work isn't valued or appreciated. Disabuse yourself of these notions, says Rich. Managers are not mind readers. Particularly at fast-paced startups, these conversations can fall by the wayside. Don't get derailed by taking the lack of comp conversations, or the way your manager handles them, to heart. This emotion can only hurt your chances of getting what you want.
"This is one area where men and women tend to differ dramatically," says Rich. "When a manager rejects a woman's ask for more money, she's likely to shrink because it seems like a referendum on her worth and value within the org. She's also less likely to try to negotiate again and more likely to leave the job. When you stop taking things as personally, you can advocate for yourself better."
Let's say you make an ask, and your boss' reply is: "Sorry, I know you want $150K, but that's just not going to happen." Instead of assuming the worst and feeling badly about yourself, counter with: "I hear what you're saying, and I'd love to understand more about why that's your position. Can you give me some more context? What would you like to see me improve or change to get to that level?"
"Men tend to ask those types of questions right away — they get right back into the ring," says Rich. "And I think that boils down to the fact that comp doesn't erode the way they see themselves. Managers usually don’t mean to make someone feel less valuable or less worthy as human beings. So don't waste time thinking like that. Get back in the ring, and at the very least maximize your learning."
Make the conversation a quest for knowledge.
The outcome of a negotiation is dependent on many, many factors — seen and unseen. There are forces driving you to ask for more. And there are forces that either allow or prevent your company from giving you more. It could be that your manager just got yelled at about budget overruns, or is stressed about a particular project. So your goal shouldn't be only financial — the higher goal should be to learn as much as you can from the conversation that could help you in the future.
Here's a common example: A manager may say they can't increase your pay because they're trying to stay within really tight compensation bands for each level of employee. Perhaps you're not managing a large enough team to be eligible for an increase.
"Great, this gives you the info you needed to ask: 'How can I prove to you that I'm ready to grow my team?' Whatever your manager says to rationalize saying no, make that the conversation's new prompt, and learn as much as you can about how to make the needed changes," says Rich. "Be extremely specific: i.e. how many people you'd need to add to your team, the exact metrics you'd need to hit. Don't just get a sense of the skills you'd need to learn, but exactly how you'd need to demonstrate them in practice."
Once you have this written down (always take notes and share them back to have a written record), make it clear that you're holding them accountable for what they've just shared: "If I do these things that we just talked about, can I expect this increase at the next review period in six months? What would the impact on my compensation be at that time?"
Be optimistic and excited about your chance to grow in these new ways. It's not about doing the bare minimum to get what you want — it's about making a real difference for the company, your manager, etc. You want your manager to walk away thinking, "Wow, if we can get X, Y and Z done, and I'm going to have a more committed, happy and fully-realized team member as a result, that's a huge win for me!"
The best negotiation is one where both sides feel like they won. You always want your boss to leave feeling like they just managed you successfully to be more committed and productive, and feel more rewarded.
Introduce other opportunities and counter-offers the right way.
When asking for more money at your existing employer, it's tempting to cite other offers you might have as leverage. This is almost always a losing proposition, says Rich. It puts people on the defensive, and makes them feel betrayed right off the bat — like all this has been going on behind their back and now they have to fight their way out of a corner. It’s important you have these conversations before you pursue an external conversation. Even if you do get a raise, you don't want those types of feelings festering between you and your manager.
This doesn't mean you can't mention other opportunities at all, just be careful. Most importantly, it needs to be clear that you haven't proactively pursued other jobs or pursued something so seriously that you got an offer. You want to be really honest and transparent (and remember that the world is small, so lying isn't an option). Most companies are hip to the fact that employees who get offers elsewhere are unlikely to stay beyond a year, anyway.
Here's what Rich recommends saying, "Hey, I just wanted to share that I have gotten interest from X and Y companies, but I haven't acted on it because I really want to be here. In addition to wanting to accomplish these new projects (or grow the team, etc.), I'd love some reassurance that there's a path here for me to grow." This is much gentler and less threatening.
HOW COMPANIES CAN HELP
Rich is optimistic about the influence of groups like Project Include, Time's Up, and others pushing for pay equity, not just for women, but all intersectional groups that are impacted by biased compensation. "I don't think they're going to solve these problems on their own, but I do think that it's a shift in tide that's making all employers more aware of the issue. And it's a strong incentive for leaders to be on the right side of the movement to attract the best talent and build their reputation. "Attitudes are changing. And we'll probably see startups being more receptive to pay negotiations that will help close gaps," she says. But there's still so much company leaders can do to hasten this along.
"It's critical that leaders educate themselves about the differences in negotiation styles," she says. "People will advocate for themselves differently depending on gender, but also a number of facets in their background and professional experience. Founders and managers have to make sure they aren't just rewarding one style of negotiation."
It's worth having a conversation about this as a management team. Review recent promotions, or hires where comp was negotiated. Do the same tactics tend to succeed again and again? How about conversations where increases were turned down? What did they have in common? Write this down and dissect possible bias.
Gather market data and make it available yourself.
One of the best things you can do is be proactively transparent about how you pay people. Every year, go through the exercise of gathering data yourself, from Glassdoor, from VC surveys, recruiters, etc. so you have a sense of what market rate is for positions within your company. Tell your direct reports you've done this and share the results with them. Give them an easy way to check your sources for themselves. Doing this without them requesting it instills trust that you're looking out for them and making sure they're getting what they deserve.
Let's say there are some wild pay disparities on your staff. Call out why publicly: "Maybe it's that people's base salaries are all very similar, but bonuses fluctuate. Be crystal clear about how bonuses are structured. You want to make sure people know that." If you have lumpy compensation for the reason most startups do — you were moving fast without having firm rules around comp — announce at your all hands that you're aware of this and actively moving to close gaps. Encourage your employees to ask questions about their compensation publicly. It gives them agency and will make them think more of you. Pay attention to who approaches you. If you find that not many women or underrepresented minorities are questioning their pay, go to them. Start the conversation.
Enlist senior and executive women to emphasize this issue.
Encourage senior women at your company to talk about pay equity often and openly. When they do, they model to the other women at your company that they should feel comfortable bringing it up and having frank discussions. Also, many of the men will look up to them and follow their example. Perhaps this includes the founders, who can speak from their experience as women about how they value pay equity. If you're a male founder, consider having a candid fireside chat with a woman on your executive team about the issue and how they wish the company would address it or ensure they're doing the right things.
Equal compensation will not be achieved if people get upset or concerned about it only every so often. You want to keep it top of mind, so that all hiring managers and all external hires are shaped by it. You might also ask senior women who feel comfortable to speak up about their past experience negotiating, so that others can relate and see that even their most successful colleagues may have struggled in the past. It's a good way to humanize the issue at your company and get colleagues to commit to pay equity out of respect for their teammates.
To be really progressive, be precise with what you're paying.
Don't wait for candidates to ask about pay ranges for roles. Drop them into conversations early, and don't provide big ranges. Make it clear what anyone choosing to work with you can expect. This can be a really difficult behavior change, says Rich. Divulging comp tends to make companies nervous that they're going to alienate candidates or lose optionality. Don't worry. It makes candidates feel respected. And you're more likely to draw in the right people. It does more good than harm for both sides of the equation.
It doesn't have to be this big, dramatic moment, just say, "Here's our rough range for this role. What were your expectations?" If there's a disparity, don't pull back. Again, seek to learn: "Great, that makes sense, but it sounds like there's a bit of a delta. Do you think we still have room here to have a conversation, because we're really excited about you." This gives you a chance to see how integral compensation will be in their decision. Depending on your stage, you might not want to work with someone so motivated by cash compensation. Be honest and accurate. Your integrity will be noticeable and the time spent with candidates will be more efficient.
On the side of progress, companies that aren't paying market rate won't be able to attract great talent as easily. They'll learn more quickly what they need to be paying in order to compete. Candidates will be more equipped and empowered to make the right choices for them rather than investing in long recruiting processes for roles that won't pay what they deserve.
"If more people focused on what they could learn from negotiations, instead of just winning, we'd have a lot of happier people in the right roles for them," says Rich. "So next time you feel nervous, or defensive, or like you're headed into battle — change your goal. It shouldn't be about decimal points or figures. It should be about learning what the company wants, what you want to deliver, and how much that's worth to both of you. With this attitude, and a lot more transparency, I think we can make strides in the right direction toward equal pay."