The 5 Biggest Salary Mistakes Women Make

The ugly truth about women and their salaries is this: We take home less money than men performing the exact same jobs. 

This means that even if a man and a woman have the same degree, have the same professional experience and do their job at the same level of competence, there would still be a difference between how much each of them earn.

Let’s think about that for a moment. The same exact background, but different pay.

The research on this is definitely side-eye worthy –  for every one dollar a man makes, a woman only makes 80 cents. 

And for many women who know they’re being underpaid, instead of pressing full steam ahead to rectify the situation, they’re guilty of making mistakes that actually sabotage their long-term income potential.

Most of these mistakes fall into 5 categories:

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Mistake #1: Not Having a Compensation Strategy

A compensation strategy is a plan that spells out your long-term salary expectations. These expectations are based on skill level and experience, industry standard for people in similar positions and unique value. Basically, you 1) calculate your worth, 2) add tax and 3) create a plan to get you to that dollar amount. 

While it would be great to have a compensation strategy before you start your first job – since your initial salary creates the baseline for everything else you’ll be paid in your lifetime –  this is something most women simply don’t know they should do. A lot of us – especially those fresh out of college and excited just to have a job – don’t take the time to think strategically about how much we get paid – which ends up being a costly mistake. 

If you don’t already have a compensation strategy, start now. Take out a pen and paper and think about where you are now, where you actually should be and where you want to be in the future. Once you’ve done the math, create a plan to get there – whether that’s by asking for a raise, looking for a new job, or starting a side hustle.

Mistake #2: Assuming You’ll be Paid for Your Contributions

It sounds so simple, right? Do a good job at work and you’ll eventually get paid for it. However, this isn’t always the case. While there are times when doing your job well can mean a few extra coins, 9 times out of 10, managers aren’t sitting around waiting to hand over wads of cash every time you accomplish a new goal.

Instead of passively waiting to be paid for your contributions, realize that you’ll need to be an active participant in your salary progression. If you expect to be recognized financially for what you do at work, then you’ll need to make sure your boss (and anyone else involved in the money decisions) is well aware of that. 

Whether you have to beef up your annual self-evaluation or schedule a stand-alone meeting to talk about your achievements, you need to make sure you create a platform to show your boss all you’ve accomplished throughout the year.

Mistake #3: Being Uncomfortable Talking About Money

Many women have pushed the subject of money to a space that is “off limits”, unable to discuss things like current salary, future money goals and earning potential with even their closest friends. So, to bring up the subject to their boss – to express dissatisfaction with their salary and ask for a raise – can be the cause of a lot of anxiety.

Although it can be tough, it’s time to move past the uneasiness that comes with talking about money – especially if you actually want to earn more. The saying, “A closed mouth, won’t get fed” couldn’t be more true in this situation. 

Although the most important conversations are usually the ones that are most uncomfortable, it’s definitely in your best interest to push past your fear and have it anyway.

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"It's time to move past the uneasiness that comes with talking about money– especially if you actually want to earn more."

Mistake #4: Making Emotional Decisions

Making any decision when you’re in your feelings is a bad idea. Emotions like: anxiety, anger, nervousness and fear can sabotage your efforts to get the raise you want when you’re not able to keep them in check.

Being so nervous that you accept the first low ball offer you get, or so angry that you yell at your boss when talking about how much you deserve a higher salary, will essentially ruin any chance of a positive outcome.

Your goal should be to remain calm and collected throughout the entire process – leaving the way you feel out of the equation. When it comes to making decisions on salary, focus on your research and the facts. 

Mistake #5: Being Afraid to Walk Away

Even if you create the right compensation strategy, ensure your manager is aware of your contributions, get comfortable talking about money and leave your emotions out of your decision-making process, the final decision on whether you ultimately get that raise or not is out of your control. 

Instead of getting hung up on this fact, you should have a contingency plan and exit strategy in case things don’t work the way you would have liked. 

You know what’s worse than realizing you’re being underpaid? Realizing you’re being underpaid, asking for what you deserve and then staying put even if nothing changes. This fear of change is what holds many women back in forging a new career path for themselves.

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If any of these mistakes are ones you’ve made in the past (or still making), don’t beat yourself up about it. Now that you know what to avoid, focus on how you’ll do better going forward.

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4 Ways to Tell If You're Being Underpaid

If I asked the question: “Would you like to make more money?” What would you say?  

I’m about 99% sure you’d say: “Of course! Show me the money!”  

But what if I asked if you were being underpaid? 

On the surface, it may sound like the same question, but I’m really getting at two entirely different things here. The first question has more to do with the fact that it’s human nature to never really be satisfied with the amount of money we’re bringing home – let’s face it – even millionaires aspire to become billionaires. 

But the second question is getting at something deeper: Do you feel the dollar amount assigned to represent your value at work – a.k.a. your salary – is fair?

According to a 2014 Glassdoor survey, 40% of employees feel they’re underpaid. That’s 2 out of every 5 people, and that’s insane. This means that most of the people at your company (maybe even including you) aren’t happy with their paychecks.

"40% of employees feel they’re underpaid. That’s 2 out of every 5 people"

But there’s a difference between generally feeling like based on what you contribute professionally, you’re not making enough to save, invest, or travel as much as you’d like, and actually having the intel to back up these feelings.

For example, imagine for a moment you’re the manager of a large department. One of your employees walks into your office and tells you she feels she isn’t being paid fairly. You try to probe and get to the bottom of why she feels this way, but the only thing she keeps telling you is: “I just feel like I should be making more money”.

The employee in this scenario is really doing herself a disservice. How can you expect to see a positive outcome – especially when it comes to something as tricky as asking for a raise – if you don’t have any facts to back up your request?

Sadly, your boss isn’t sitting around waiting to hand you an extra wad of cash just ‘cause. So, before you walk into his office demanding to be paid more, you’ve got to be clear on where you stand.
 

Here are 4 ways to tell if you’re truly being underpaid:

1. Your Level of Responsibility Has Increased, But Your Salary Hasn’t Followed Suit

Nine times out of 10, if your responsibilities have increased, your salary should too. Think about it – your previous pay corresponded with your previous work, so if there’s been a significant change in what’s expected of you, shouldn’t there at least be a conversation on how the change affects your compensation? 

Looking at your current salary in the context of any new role you take on, is a crucial step to make sure your salary remains competitive.
 

2. You Haven’t Received a Raise in a Long Time

In an ideal world, you should expect to receive a raise every year. And not only should your new salary keep up with the rate of inflation, but it should also represent the value you’ve contributed to your team over the past 12 months. Basically, it should be your company’s way of saying: “Hey, girl. We value you. We appreciate you. Keep doing what you’re doing.” However, in the real world, we know things don’t always work out this way. 

If you haven’t seen your salary move in a positive direction in two years or more (or if the bump you did receive hardly made a dent in your plan to pay off your credit cards), you’re most likely being underpaid. 
 

3. You Know [For a Fact] People in Similar Roles Get Paid More Than You Do

While it’s generally frowned upon for employees to discuss their compensation with their coworkers (though not illegal in most cases), there are other ways to get to the bottom of where your salary falls in comparison to people in the same role as you.

Sites like Glassdoor and Payscale have completely changed the game on accessing insider salary information. With a few simple clicks, it’s possible to find the average pay for virtually any role at any company. If you’ve researched three to five salaries and they are way off the mark when you compare it to your own, this is a huge red flag and could mean you’re not being paid enough. 
 

4. Your Colleagues Are Quitting Left and Right

While the main reason people quit a job is to escape a bad boss, one of the other top reasons is to escape bad pay. If all of a sudden your work besties are running for the hills – you may need to pull one of them to the side and ask why. The fact that your coworkers are calling it quits could mean they are finding better money opportunities at other places and it definitely means it’s time to take a look at your own numbers.

The key thing to remember is this: Your salary is something that should be looked at often in order to make sure it stays in line with your responsibilities and the industry standard.  If you can relate to any of the scenarios I’ve described, it’s time to take a long, hard look at your salary so you can be sure you’re being paid what you’re worth. 

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"Your salary is something that should be looked at often in order to make sure it stays in line with your responsibilities and the industry standard."
 

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