Why there is a gender pay gap in freelancing

Pay inequality between men and women is not just restricted to the traditional full-time workplace. It exists in the freelancing world too.

Research shows that men out-earn women doing the same freelancing job and this gap worsens as experience rises. A 2017 report by Flexing It, a freelance platform, which studied what India’s experienced independent professionals earn across skills, industries and gender, shows that women professionals with over 16 years of work experience earn 45-50% lower fees compared to their male counterparts.

Last year, a US study of over 1.8 million Uber drivers found that female drivers make 7% less per hour, even though the algorithms that determine pay for the ride-hailing service are gender blind.

Research from UK-based Website Planet shows some women are paid half as men for similar freelance work. What is causing this pay gap?

Women settle for less

Men are four times more likely than women to ask for a raise, and when women do ask they typically request 30% less than men do, says Carnegie Mellon University economics professor Linda Babcock, who has co-authored Women Don’t Ask: The High Cost of Avoiding Negotiation—and Positive Strategies for Change. In a study of 78 master’s degree students, she found that just 12.5% of women negotiated for their starting salary versus 52% of men.

A 2016 survey of over 2,000 workers, published by Glassdoor, found something similar as well. Almost 70% of women accepted the salary they were offered and did not negotiate, a 16% point difference when compared to men, the survey concluded. A major reason for this is that women underestimate themselves. “... we don’t actually know what we are worth. Through a quirk of biology and culture, we undervalue ourselves. What’s more, even if we do realize our value and then ask for it, we often suffer consequences of another sort. People find us bossy, or uncompromising, or difficult. They don’t want to work with us,” says Joanne Lipman in her book, That’s What She Said: What Men Need to Know (and Women Need to Tell Them) About Working Together.

Haunting stereotypes

Sunaman Sood, who has been an independent consultant for over a decade and runs a management consulting firm, points to another cause behind the pay gap: the notion that women can’t be flexible in working. “I believe my women counterparts sometimes lose out not in how they negotiate but how they develop business. Business development, at times, requires a level of flexibility, for example, meetings over weekends or late evening calls. There is a perception that women freelancers may be a lot less accommodating when it comes to such tasks, which might impact how they get paid.”

In his report on the causes of the UK’s gender pay gap, Malcolm Bryning, a professor at the University of Essex, says women over 30 and mothers are particularly prone to being labelled less committed or reliable. “Women have career gaps and some of that is perhaps a ‘legitimate’ cause for a pay gap, but there is always a residual which is not explained, and that is often imputed as discrimination,” he says.

The way out

Flexing It’s founder Chandrika Pasricha says women coming back into the workforce after taking a break don’t get their due, and one of the ways to fight it is build awareness about the freelance market. “Identifying the most credible fee benchmarks and talking to other consultants are good ways to do this,” she says.

Zena D’Souza, a senior professional in the pharmaceutical industry who has recently become a consultant, is using her last salary as a reference for the amount she quotes for a project. “I’m connecting with more and more consultants. Networking is important but it’s never really a straightforward conversation around consultant fees. And this is expected, since the best projects are competitive. This is a new space for me and my focus is more on building a strong portfolio. So I would consider the quality of projects as much as negotiating the highest rate at this stage,” she says.

Owing to the no-wage transparency culture many people are not aware of what they are worth, and quote figures without ample research and investigation. The absence of an organized ecosystem for freelancers makes this research harder despite the advent of consulting firms that help bridge the gap between clients and independent professionals.

While salary benchmarks exists in the form of reasonably credible data on sites like Glassdoor and Payscale, such transparency is lacking in project-based work.

Being an independent professional in the on-demand knowledge space can certainly be a smart career move for women freelancers. However, doing your research is key. Engaging with organized consulting platforms that offer access to high quality projects, transparency around billing and a supportive ecosystem are some ways to ensure the right pay.

But remember, confidence matters as much as competence to succeed. One of the biggest weapons to fight pay gap is self-confidence. There is enough research to show that women even at the highest levels are less self-assured than men, and underqualified and underprepared men don’t think twice about applying for promotions.

Perhaps the first step towards fighting pay gap in the freelancing world is to close the confidence gap.

Ruchira Chaudhary is an independent strategy professional, an executive coach and adjunct faculty.Write to us at businessoflife@livemint.com