Whether you’re considering a new job or aiming for a promotion, knowing how to negotiate can be key to securing the pay and package you deserve. While it’s critical to know what you should do, it’s just as important to know what you should avoid to prevent blunders blowing up in your face during salary discussions.
There are common salary negotiation mistakes that can result in a much lower pay than you expect. Worse, you may end up losing the job offer you’ve worked so hard for. The following seven negotiation mistakes can be easily avoided with some skill and know-how.
Salary Negotiation Mistakes:
Not Negotiating At All
A 2017 survey run by PayScale found that:
Yet, according to a study by Robert Half Creative Group, over 70% of executives are prepared to negotiate and pay more than their first offer. So when you fail to negotiate, you could literally be leaving money on the table.
Don’t make one of the biggest negotiation mistakes by being afraid of butting heads over your compensation package. Negotiation is ethical and expected. When you don’t negotiate, you lose out on a potentially higher salary. In addition, subsequent salary offers may be based on your previous salary. So your initial lower salary might have a snowball effect that may last throughout your career.
Not Knowing Your Value
Knowing what you’re worth prepares you to justify what you’re asking for. Today, previously hush-hush topics like salary are readily available with a little research. For example, there are online tools to determine how much people in similar positions and with the same training are earning in both yours and competing companies.
Walk in to these conversations with a firm grasp of what you should be earning. Remember to have a lowest acceptable salary limit in mind. Once an offer has been made, take time to consider the deal. A little pause helps to put the offer in perspective.
If you’re working with a recruiter, they likely have detailed guides on what companies are willing to pay for your skills. Knowing what the company is willing to pay can guide you on how much to ask for, what concessions you can make, and the perks and benefits to expect.
Focusing on Self-Serving Needs Rather than Value
Often, unskilled negotiators make overly ambitious demands to drive salary offers up. For instance, many feel the temptation to lie and exaggerate about their current salary. However, such tactics can be transparent and come across as self-serving.
Rather than focusing exclusively on your needs, consider the company’s needs too. When making a counteroffer against an employer’s offer, focus on creating and claiming value rather than coercive tactics.
Take time to build rapport. Share your underlying interests and the value you bring to the role. Find possible trade-offs that enable your employer to see you as a trusted partner. You don’t want to appear as someone who only looks out for their own interests.
If there’s an issue you don’t feel strongly about, you can indicate that you’re willing to make a concession in return for something you value more. For instance, you can forego some sick days for greater work-from-home flexibility, with your home office setup being funded by your employer. In all discussions, find ways to create win-win solutions rather than employing a winner-takes-all strategy.
Not Negotiating Beyond Money
When walking into an interview or salary review, keep in mind that the company seeks to look after its own interests. In maximizing returns, the managers may forget to consider certain employee perks and benefits. By negotiating, the employee brings to light needs that the management may have overlooked. When you don’t negotiate benefits,you stand to lose as much as $500,000 over the course of your working life.
It’s easy to find yourself fixated on gross salary figures, especially when the money isn’t as much as you had hoped for. However, before rejecting an offer based on the salary, make sure you’ve considered the perks and benefits. A higher gross salary may not mean much if your paid family vacation days are withdrawn.
When you decide that all the terms of your employment are open to negotiation, then a world of opportunity awaits. Consider discussing dental cover, company training, pension contributions, life insurance, vacation days, or a car allowance. Many companies nowadays are eager to provide perks and incentives that motivate their employees.
Taking It Personally
People naturally fear rejection or being perceived as greedy or pushy. Yet in business and career, rejection could simply reflect that you didn’t present a viable proposal. Don’t take the reactions of others personally. Instead, consider whether your argument justified your need for a higher salary.
Often, in employment negotiations, a “no” reflects a need for more information. Take heart knowing you might have to sometimes endure a rejection before finally getting a “yes.”If at first you don’t succeed, keep refining your negotiation skills and come back if you feel you’re worth the higher salary.
If talks break down, move on graciously. Your professionalism can win you contacts who might influence your other interviews later in your career.
Asking For Too Many Changes
A few employees make the mistake of asking for too many changes, especially after winning a first round. For instance, you ask for a 7% increase and when granted you then ask for a signing bonus. Then you follow up with a demand for corporate training.
It’s perfectly okay to propose changes to your employment contracts. However, too many demands might frustrate your recruiter or employers. Also, expecting an entire overhaul of the contract is unrealistic. Remember: Companies have policies to stick to.
Instead, be decisive with your first counteroffer. Pick specific employment terms you want to change in the contract. Propose all the changes you want in one move rather than one clause at a time.
Accepting or Declining Offers Too Fast
Once an offer is on the table, you may have only one chance to make a counteroffer. It’s at this point that many employees rush into a decision. Instead, it pays to carefully weigh the pros and cons.
Even the best job offers need time and thought. Ask for some time away from the pressure of your future employers staring at you waiting for your signature. Most interviewers will allow you a few days to a couple of weeks depending on the level of the position. Avoid this negotiation mistake by taking the time to consult someone with the skills and training to review employment contracts.
Similarly, before rejecting an offer, take the time to review the contract in full. Even when the salary and perks are lower than expected, take a pause before giving your official rejection.If you decide not to go ahead, be courteous and thank them for the opportunity.
Whether you’re a job candidate or an employee looking to discuss a raise, reducing these negotiation mistakes and being prepared can lead to a better compensation package. Knowing the potential pitfalls and how to avoid them can mean more fruitful negotiations.
Avoid these common salary negotiation mistakes. Prepare with facts and figures. Compare salaries and benefits across companies, industries, and cities. Take a collaborative approach and avoid coercion or coming off as self-serving. Above all, consider the compensation package in its entirety. Corporate training, medical cover, or paid vacations may hold more value than a few extra dollars.