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The growing digital labor economy (also called the gig economy) is the new frontier: flexible work from anywhere in the world, the ability to stay professionally relevant, and all without sacrificing personal or family priorities. This new model of work has the potential to be great for professional women, and I’ve personally reaped the benefits. But it has come with an unexpected cost.
A year ago I started working remotely as a marketing consultant when my husband and I moved from California to London with his job. After working for large corporations for years, I was happy with how my little business was blooming.
As I was doing a project for a new client, I happened to see a proposal from another consultant working for the same company. He and I were working on a similar project, had similar credentials and similar experience, but we did not have similar rates. He had charged 40% more that what I charged, for essentially the same work.
Saying that I was disappointed in myself is probably an understatement. In the past, I’ve always prided myself on negotiating well and making sure that I was earning a competitive salary. But once I moved into the digital labor economy, I undervalued my work significantly.
After some research I realized this was a potential pitfall for any woman embracing this new way of work. When we work for large corporations there is market research we can use to figure out what we should be earning, and there are norms about when, with whom, and how much is negotiable. Take away that certainty and a study shows that women tend to earn less. When it comes to earning, ambiguity is our enemy.
I wanted to understand how women working in the same situation could avoid the trap of under earning. I spoke with Harvard senior lecturer Hannah Riley Bowles, who has devoted her career to researching gender negotiations. Through research, she breaks down ambiguity into three main types (Who, What, and How) and gives us strategies to tackle each one separately.
WHO:
For the first type of ambiguity, Bowles explained that the less we know about someone, the more likely we are to rely on stereotypes to shape our perception of them. A common stereotype to lean on is a gender-based stereotype.
In the digital labor model, in-person meetings are rare and first impressions are generally made from a pitch and a resume, leaving a lot of room for gender-based stereotypes to fill in the gaps. Bowles explained that these stereotypes could include “she’s going to be agreeable and not push back on what I offer,” or “this is probably how much she makes.”
To combat this, Bowles advises to clearly signal who you are, so your client will rely less on stereotyping and will form their early opinion based on the signals you project.
She explained that signals can include clear statements, such as “I provide high value work.” Or the signals can be more subtle, by using your client roster, your reviews and your credentials to create the first impression image that you want them to see. Showcasing a roster of high value clients or reviews that focus on the quality of the work you do can help signal to prospective clients early on that your work doesn’t come cheap, but it’s worth it.
WHAT:
When I was pricing my first projects, it was hard to know how to price right. What price should I charge and what was up for negotiation? Bowles explained that this is the premise of the "What" ambiguity. In situations where less is known about rates and what is negotiable, women tend to ask for less. In structured, corporate environments, women may have a sense of appropriate pay levels and other items they can negotiate for. In this new economy, there is a lot more ambiguity.
To decrease this, it’s important to do your own investigative work and ask others what prices they’ve seen for similar work and what is negotiable. While I thought I had done my research to ask a few peers what a fair price would be, Bowles cautioned that my investigation didn’t go far enough. She explained that though I had reached out to my convenience network, that information can be biased. We tend to compare ourselves to and form relationships with people we believe are closest to us, which means if you survey your convenience network, you are likely asking other women for advice.
This can be a problem. If women are asking for less and you’re asking a pool of women for advice, you might be setting yourself up to under-earn without realizing it. Go beyond your convenience network to do your research.
HOW:
According the Bowles, the final piece of ambiguity that we need to tackle is how to approach discussing rates: both the initial discussion and any negotiation that takes place.
Women tend to be more inhibited than men when negotiating because we know it comes with a social cost: people are less likely to like women who initiate a negotiation. When the norms around negotiating are less clear, as they are in the digital labor economy, women feel even more regret related to negotiating.
Bowles suggests that to ease anxieties it’s important to try and understand the norms for your type of work for your industry, and for your client. She suggests reaching out to other professionals, again outside of your convenience network, to get feedback on how to approach a conversation about fees. Not only will this help you to devise a communication strategy that works, but it will also help you to feel more comfortable going into the conversation knowing that your approach is completely normal in this situation.
While the digital labor economy does provide great opportunities for women to take advantage of flexible, often location independent careers, we need to know that we’re not doing it at a cost to our bank account. Using these three strategies to decrease ambiguity is a great place to start.
Erica Gellerman is a consultant who helps women advocate for themselves so they can be recognized and rewarded in their career.
