The old saw makes it sound so simple: Put in a hard day’s work, get a fair day’s pay. Alas, it’s not easy to know what you’re worth.
Negotiating proper pay isn’t just about your bank account or your bottom line, argues Casey Brown, president of consulting firm Precision Pricing. Earning just recompense also affects how you feel about yourself.
“Being properly valued is so important,” Brown says in a TED talk. “The implications range far beyond just finances into the realm of self-respect and self-confidence.”
In an era of offshoring and outsourcing, the pay puzzle is a conundrum for everyone in the labor market. But fair pay can be especially problematic for women. Citing the US Bureau of Labor Statistics, Brown says female employees make just 83 cents for every $1 men earn. Female entrepreneurs fare even worse, making only 80 cents to a man’s $1.
Brown says there are two steps to extracting what you’re really worth from employers or clients.
1. First, define your value.
What are your clients’ needs, and how do you meet those needs? What unique skills qualify to serve your clients? What do you do that no one else does? What problems do you solve? What value do you add?
Brown answered these questions about her own company and concluded that she had been vastly undercharging for her services. She was concerned that clients would balk at a large increase and take their business elsewhere. But Brown pushed on: Confident in her product, she prepared proposals with the higher pricing and clearly communicated the value provided. Her business thrived despite her fears.
2. That’s step two:
After you’ve defined your value, you must communicate it – and explain to your boss or clients why you deserve a raise.
Brown’s experience brings up another difficult reality: Boasting isn’t easy for many business owners, and especially for female entrepreneurs. Brown describes the female founder of a web development business who often referred to her firm as a “little web design company.”
The self-effacing language undermined the perceived value of her product and depressed her earning potential, Brown says. Once this web designer focused on the quality of her offerings and her love for her work, she tripled her prices — and her business flourished.
Meetings with disgruntled clients that once would have intimidated her are easier now. She analyzes the numbers, lays out the data and communicates the value she delivers to the client. Her language and practices underscore her confidence in her product.
“Clearly defining and communicating your value are essential to being paid well for your excellence,” Brown says.
For more about negotiating pay and the hidden forces in labor markets, visit www.getAbstract.com.