Small-business owners who are just getting their firms off the ground and are ready to hire a team of employees to help them reach their goals have some things they need to think about before making any hiring decisions. Recent research conducted at the University of Chicago found women are just as willing as men to negotiate for pay, when given the opportunity, contrary to the beliefs of many traditionalists.
Women want a fair shot at more money, too
Many small-business owners may feel that they can hire a team of mainly women for lower salaries than men, but that is just a common misconception that many firm owners are beginning to learn the hard way. Salary negotiations with women are becoming more common every year.
“We find that simple manipulations of the contract environment can significantly shift the gender composition of the applicant pool,” said John List, an economist from UChicago, and a Homer J. Livingston Professor in Economics.
When there is no statement in a job description, men are usually more inclined to ask for more money, while women will take the initiative on negotiating salaries, according to the study. Women were also found to be three times more likely to apply for jobs with negotiable salaries and to engage in salary negotiations once they applied.
“By merely adding the information that the wage is ‘negotiable,’ we successfully reduced the gender gap in applications by approximately 45 percent,” said List.
Men ask for more money when applying for a job
Fixed salaries attract more men applying for jobs, and they are more likely to apply when the salaries are high. Women are more willing to negotiate, according to the study.
The study determined the probability of men applying to a job with a fixed salary was 47 percent, while it would only be 32 percent for women. However, when salaries were negotiable, the probability of women applying increased to 33 percent, while men’s probability decreased to 42 percent.
Small firm owners know that salary negotiations can often become difficult to manage. By protecting themselves from potential litigation with business insurance policies, firm owners can feel more secure when negotiating salaries.
