Photo by Mimi Thian on Unsplash
This article as first published in FastCompany on 07.11.16
I was at dinner recently with some close female friends when the conversation veered into uncomfortable territory: Money. More specifically, what we currently earn versus how we’d like to be compensated.
I sat there saying very little.
Growing up, money–especially for the adult women in my life–was never considered an appropriate topic of discussion. Ideally, you had it; you never admitted that you wanted more of it or acknowledged a lack of it. That was just good manners.
But this recent evening made me realize just how deeply I’d internalized that reticence around money matters–and how personally and professionally detrimental that might be. This is one difficult conversation it literally pays for women to master, both among ourselves and in the workplace at large.
1. KNOWLEDGE IS ALWAYS BEST SHARED
The gender pay gap is more complex than the 77¢-on-the-dollar figure we’ve grown used to hearing women earn relative to men. Many different factors contribute to many different forms of earning disparity, and while important research is constantly bringing them to light, it can be hard for ordinary professional women to see the full range of ways those imbalances impact our lives.
One study found that while 61% of women wanted greater transparency on employee salaries, only 38% of men agreed that was necessary.
For instance, there’s the “motherhood penalty” that women without children don’t experience firsthand. Or the way women’s pay drops when the number of women working in the field increases–something that’s more keenly felt in certain industries than others.
Simply sharing information (including the anecdotal kind) is the first step to addressing the gender pay gap in all its complexity–especially since we know this type of knowledge can still be hard to casually obtain. One study found that while 61% of women wanted greater transparency on employee salaries, only 38% of men agreed that was necessary.
How to change things: Women can take it upon themselves to build internal intelligence. “Talking about salary, or money in general, is awkward,” Cheryl Kim, VP of corporate reputation at Aimia Inc., acknowledges. “But at work, transparency with trusted colleagues can make a significant difference. In my last role, a friend and I shared our salary and bonus information with each other for several years,” Kim says.
“We knew each other well enough to understand whether any discrepancy was appropriate, and when to advocate for ourselves if it wasn’t. It made our managers uncomfortable,” she adds, “but it was critical for us to feel we were being treated fairly.”
2. IT NORMALIZES THE TOPIC
A 2015 Fidelity Investments Money Study found an overwhelming majority of women (80% of those surveyed) refrain from discussing their finances with family and close friends. The researchers found that this reluctance translates to fewer conversations about investments and longer-term financial planning–all to the wealth detriment of women.
A 2015 Fidelity Investments Money Study found an overwhelming majority of women (80% of those surveyed) refrain from discussing their finances with family and close friends.
“I remember reading about The Smart Cookies years ago–a group of female friends who created the equivalent of a book club on personal finances. I thought it was brilliant,” Amanda Alvaro, cofounder of the agency Pomp & Circumstance, tells me. “I spent my life talking to my friends about virtually everything but money.”
“If we’re looking to close the gap between males and females in the C-suite and male and female entrepreneurs,” Alvaro believes, “we need to first break down the taboos around speaking about finances, talking about pay expectations, and bridging opportunities for women to access mentors and capital. These are conversations that should be happening among girlfriends.”
How to change things: Alvaro recommends practicing these discussions in your comfort zone first, much the way Kim did with her close work colleague. “Inspire open and frank conversations with friends about finances,” Alvaro advises. “You can have the broader discussion without divulging details.”
Then, once you’re more comfortable, it’s time to steadily expand the circle. “Join entrepreneur or business-related networking events,” she suggests, “read ferociously, and jump at the chance to assemble a small group of mentors to help guide and advise [you].” The impact of incremental, individual efforts like these can have exponential ripple effects over time.
3. IT CAN LEAD TO BETTER BUSINESS DECISIONS
“There is a fine line between generosity–paying it forward–and lack of confidence when it comes to money. And often, the right conversation can help us realize this,” says Candice Faktor, CEO of the innovation firm Faktory. “Recently, a highly successful New York–based friend was asking if she should charge for her advisory services to startups,” Faktor recalls. “We talked about the industry norms for advisory services and the spectrum of opinions on what you give as karma, and when it makes sense to formalize equity advisory.”
It’s an important point: If you’re hesitant to talk about your pay when you’re an employee of company, you’ll likely be just as tight-lipped as a consultant charging fees for your services. But it can be easily dispelled. The open conversation Faktor had with her friend helped her crystallize her thinking.
How to change things: “Your colleagues, bosses, employees, and customers are the people who can and will be your support network to bounce ideas off of,” says Faktor. Don’t hesitate to make the first move. “Ask them for advice and to share their perspective and don’t be afraid of looking vulnerable.”
4. IT’LL HELP YOU RAISE MONEY
Elle AyoubZadeh, founder and director of the luxury footwear line ZVELLE, felt well prepped for funding conversations right out of the gates. “I’d gone to business school and worked in the finance industry. But I still faced investors who told me, ‘You need to get a male to offset your female brain. Go find a male partner and come and see me in six months’ time.'”
Other investors may not be so overtly sexist, but there’s a clear gender imbalance in the startup world, both among entrepreneurs and investors, that suggests similar attitudes may be in play. Most glaringly, while rates of women entrepreneurs continue to rise, women only receive 7% of all U.S. venture capital.
And according to a recent Harvard Business School study, unconscious bias is a likely culprit: When investors were asked to imagine a successful entrepreneur, they overwhelmingly thought of a (good-looking) man.
“The more comfortable we are expressing our value, I think the better we can achieve our true worth.”
How to change things: “Talking with other women entrepreneurs helps you realize that you have other choices,” AyoubZadeh points out. “Surround yourself with people that can give you the right counsel–and by that I mean that they have done similar things to what you want to do.”
This ended up paying off during AyoubZadeh’s fundraising efforts. “I got very selective and raised money from exactly the kind of investors I wanted to, and the beauty of it [was that] all of them happen to be a handful of incredible women.”
5. IT AFFIRMS YOUR TRUE WORTH
“Too often, women equate our compensation in practical terms: ‘what I need’ versus ‘what I deserve,'” says Kirstine Stewart, Twitter’s VP of media, North America and best-selling author of Our Turn.
“I’ve had women come to me looking for a raise, but they use the justification of expenses, when the approach should be, ‘This is what I contribute to the business, and this is my worth to the business,'” Stewart tells me. “The more comfortable we are expressing our value, I think the better we can achieve our true worth.”
How to change things: Personally, I’ve started to have more of these discussions with the women and men in my personal and professional life. And I’ve found that easily one of the best reasons to do so is simply that it improves how you feel about yourself, what you’re worth, and what you should be earning.
As professional women, we need to keep pushing our employers and lawmakers for change. But at the same time, we should also be pushing each other. We need to get more comfortable talking with each other about money than earlier generations often were.
After all, boosting you up is exactly what your squad is for.
