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Race doesn't impact how job-seekers negotiate salaries—but it does affect how much money they get

CNBC logo CNBC 11/13/2018
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Conventional wisdom holds that you should negotiate your salary when you apply for a job, since that usually won't hurt your chances of landing an offer as long as you remain likable, and pocketing a few extra thousand dollars every year can add up as you get older. And when it comes to negotiating there's no shortage of advice on what works and what doesn't. You should know what you're worth , for instance, and be ready to justify why you're asking for more.

But regardless of how much you prepare, new research suggests that if you're black, racial bias can lessen the offer you end up receiving.

"Racially-biased job evaluators see black job-seekers as less deserving of higher monetary awards and take issue when the black job seekers ask for more," Morela Hernandez, an associate professor at the University of Virginia, tells CNBC Make It.

In the paper "Bargaining While Black," Hernandez and her colleagues suggest this bias may help explain the significant racial wage gap in the U.S. In 2016 the Pew Research Center reported that college-educated black men earn 20 percent less than college-educated white men. That's the difference between making $25 and $32 per hour.

Meanwhile, college-educated black women earn 8 percent less than college-educated white women. When you don't account for education, the gap becomes even more significant.

The researchers identified the salary negotiation process as a potential contributor to this trend through a series of experiments. In the first, study participants completed a survey to determine their own racial bias. Then they looked at resumes and headshots to estimate the likelihood that hypothetical job seekers would negotiate their salaries. Participants who demonstrated racial bias, the researchers found, expected black job-seekers would negotiate less than white job seekers.

Then participants were randomly assigned to be either hiring evaluators or job candidates and, in one-on-one scenarios, negotiated for a salary between $82,000 to $90,000. Race had no real effect on how much the candidates negotiated, but some of the participants incorrectly thought it did.

"Racially-biased job evaluators consistently overestimated the number of offers and counteroffers black job seekers made," says Hernandez. "This underlines how our brains can see something that isn't in fact there by virtue of the lens we use to interpret the situation."

Biased evaluators expected black job-seekers to negotiate less than the white job-seekers. Yet once the researchers put it to the test, those evaluators thought the black job-seekers actually negotiated more. As a result, they were "less willing to make concessions."

In other words, because their expectations were violated, they gave the black candidates less money.

"Each time a black job-seeker was perceived to have made an offer or counteroffer, it corresponded in the receipt of over $300, on average, less in starting salary," the report states.

In light of these findings, the researchers note that being aware of your own biases can help diminish their affects. They suggest that companies can benefit from training hiring managers to help ensure more equitable salary outcomes for incoming black and white employees.

"Previous research has demonstrated that black men expect lower starting salary offers, and also may not have the same foundation to confidently know what fair market value they can command," says co-author Derek Avery, a professor at Wake Forest University School of Business. "But the hiring process shows it's not just the job-seeker's mindset that must change. Hiring managers who negotiate with black candidates also bring their biases to the table."

Don't miss: Companies with more female executives make more money—here's why

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