How new grads can maximize earnings from the start
By one estimate, over a 40-year career the persistent lower pay for women translates to a lifetime earnings penalty of $500,000 less than what men earn (for white women) to more than $940,000 less (for Black women) and $1.1 million less (for Hispanic and Latino women).
Among the causes: gender wage bias by employers; the unequal division of household work that causes many women to take time off to care for family; and a disinclination at times among women to forcefully negotiate pay, especially since such assertiveness at times leads to a backlash.
Now, another cause has surfaced. New research finds female undergrads rush to nail down their first job faster than men, and in doing so may miss better offers.
Job search anxiety
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Academics studied job-hunting habits and initial salary offers for more than 1,300 undergrads at the Questrom School of Business at Boston University between 2013 and 2019.
There was no gender difference in the number of job offers, nor the tendency to turn down a job offer. But female students were more inclined to accept a job earlier than male classmates, by an average of one month.
Among those accepting offers during the summer (August) heading into their last year of school, women earned 17% less than men, on average. By graduation, the wage gap had narrowed to 10%. (The data takes into account different majors — marketing vs. finance — and GPAs.)
Granted, that 10% gap is still problematic — it worked out to an average gap of around $6,000 — but the research suggests that being a bit more patient can pay off.
The overconfidence game
Why the difference between genders in timing?
The well-established behavioral fact that men tend to be more confident — overly confident — than women is at play in the job search. The researchers estimate that about 25% of the wage gap can be attributed to men’s greater confidence.
Waiting, of course, raises the risk one might not land a job. Men were more OK with that, and more comfortable with risk-taking than women.
What women graduates can do:
Negotiate if you get a summer job offer. If you interned at a great place, and they offer you a job before you head back to school for senior year, that’s a great achievement. But slow down. Are you absolutely sure you want this job? If the answer is yes, don’t retreat into a “I can’t believe how lucky I am” stance. C’mon, they’re lucky too, right?
Do not tell yourself all you care about is getting your foot in the door. A lower starting salary tends to stick with you for years, and it means raises and next jobs are built from a lower base.
Research what’s competitive. There are plenty of websites, such as PayScale and Glassdoor, that provide salary range info. And asking people you know in that job, or who had that job a few years ago, is going to be even more helpful. This is where your social network and alumni relations can help. Or see if you’re just a LinkedIn connection or two away from someone who had your job a few years ago.
Ask for more time to make a decision. Undergrads recruited at BU’s business school typically have a maximum of two weeks to accept an offer, and 40% are given just a one-week decision window.
The researchers estimate that if employers extended the offer time by a month it would reduce the first-job gender wage gap by 40%. That’s not likely going to become standard practice any time soon. In the meantime, when you get an offer, politely and professionally express your enthusiasm, and then pivot to requesting that you have a few more weeks to sort through the decision.
Get negotiating help. If your school offers any free seminars on salary negotiating or how to approach the job hunt, you are nuts to not take advantage of that. In junior year, ideally. There are going to be some useful nuggets in there.
You might also want to hire a salary/negotiating coach for some online tutoring. Ellevest, an investment and financial planning service run by women, for women, offers 1:1 salary negotiating sessions at an affordable price, as does the Muse website.
If you get help before you even start the job search, you can practice how to answer the “What sort of salary are you looking for?” question that is going to come from HR pretty early in the job-hunt process. (Hint: Give a range, and make the low end 5% to 10% higher than what you will be happy to accept. Giving your negotiating counterpart room to negotiate is key to a successful negotiation.)
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