Here's an unpopular opinion: I don't think people or companies should negotiate.
Currently, there's a lawsuit against Apple claiming that women are being paid less than men for doing the same work. There was a similar lawsuit at Google which was settled in 2022.
How does this happen? Well at least in part due to negotiation.
Historically, men have been more likely to negotiate and while the gap is closing, negotiation still works out better for men. Meanwhile, women who negotiate are viewed more unfavorably (as are BIPOC of all genders).
So negotiation ends up working out better for men.
And this compounds over time to create massive inequity.
For example:
1️⃣ A man negotiates that first job offer from $60k to $65k, while the woman starts the same job at $60k.
2️⃣ They both get 3% raises in year 2, and now he makes $66,950 while she makes $61,800.
3️⃣ They get promoted in year 3 and get offered 10% increases. He is now at $73,645 while she's making $67,980.
4️⃣ In year 4, they both get offers of $75k with a different employer.
She happily accepts - it's another 10% increase!
He says, "that's essentially what I'm making already, I'm not changing jobs without at least a $10k increase." So they offer him $85k.
Over the course of 4 years, 2 people with the same job title and experience, end up with a $10k/12% difference in compensation - due to negotiation.
In isolation, these can feel like good decision with solid rationale: "Of course we need to come up a bit, we can't expect him to leave his job with no change in pay!" No one is doing anything "wrong".
But when it happens over and over again across the entire system, then it leads to huge inequities across lines of gender and race.
So what are some things companies can do?
1. Increase transparency.
Publish compensation ranges and offer transparency around how people will be placed in those ranges from the first conversation.
2. Standardize compensation-setting practices.
Have a clear process for how salaries are set, and what factors are considered, and as hard as it is, and stick to those criteria even when it's really hard and may mean losing candidates.
3. Put out your best offers the first time.
If companies put out lower offers in an attempt to pay the least amount possible or to leave wiggle room for negotiation, then they are basically forcing candidates to negotiate to get the best offer, and that perpetuates inequity. Put out your best offer, and only negotiate if it's objectively warranted because the offer was sit inappropriately.
4. Correct inequities.
Run analysis on comp inequities, and fix them.
And for candidates: You probably aren't as concerned with the system as you are your own earning potential. So it's OK to try and negotiate.
But if a company says this is our best offer, and we set it intentionally based on the compensation philosophy and internal equity, believe them.
This is how we ultimately get rid of inequity in the system.