Mistakes People Make When Negotiating Their Starting Salary

By Gerald Walsh ©

Salary negotiations can be one of the most difficult steps in a job search process. For some, it’s a natural discomfort with talking about money. For others, it’s a fear about asking for too much (and losing the job opportunity) or for too little (and being underpaid).

Mistakes made at this point in the search process – or worse, avoiding the issue all together – can cost you thousands of dollars in the long run. Here are the most common mistakes and tips on how to avoid them:

Mistake #1 – Bringing up the salary question before the employer does

Nothing turns off an employer faster than a candidate asking about salary too early in the process. Arguably, there is merit in raising this question early so no one wastes time if the gap is too large between what the employer wants to pay and what you want to receive. However this protocol is so engrained in the hiring process that if you violate it, the reaction is almost always negative. So be patient. It will come up eventually, assuming the employer is interested in hiring you.

Mistake #2 – Not knowing what you are worth in the marketplace

In order for any salary negotiation to go smoothly, you must have a good idea of what you are worth based on your experience, education and qualifications. Most people have an idea of their worth but in some instances, such as when you are moving to another part of the country or hitting the job market after many years working for a single employer, your current pay level may not be relevant anymore.

If this is the case, you will want to check this against the “market” by reviewing job postings, online salary calculators, industry associations who may produce salary guides for their members, and professional recruiters who have a lot of experience negotiating salaries. And don’t overlook obvious sources, such as simply asking people who work in the field for salary guidance on the type of position you are seeking. Good research will pay off in the long run.

Mistake #3 – Making it all about you

Employers are not concerned about your personal financial situation and how much money you have to earn to make ends meet. Trying to negotiate a higher salary because you have a big mortgage to pay will get you nowhere. Keep it professional at all times. It’s about the job responsibilities, industry standards and your qualifications.

Mistake #4 – Being the first to quote a definitive salary amount

The first person to quote a salary number loses. That is one of the core principles of negotiation. If you do so, you are telling the other person what your threshold is. Whether you are buying a used car or negotiating salary, the same rules apply. If an employer asks, “What are your salary expectations?” try to toss it back by asking, “I am interested in this role. Has a salary range been set?” A word of caution: if this back and forth goes on too long, you can turn off the employer. If he keeps pressing for your expectations, you should be prepared to state a salary range.

Mistake #5 – Believing you can catch up by negotiating a higher salary later on

The best time to negotiate salary is after a job offer has been made, but before you begin work with a new employer. This is because the cost of receiving a lower-than-hoped-for salary is so high over the course of your career. Let’s say two individuals – each 35 years old – are starting new jobs. One starts at a salary of $50,000; the other at $55,000. Although the difference is small at the start, if you assume each of their salaries increase by 3% annually, the second person will have earned $238,000 more than the first person over the course of their careers because of the compound interest effect.

Mistake #6 – Accepting an offer on the spot

Even if the offer comes in at more than you wanted (which is rare), you should never sign on the dotted line immediately. If you do, you run the risk of coming across as impulsive and careless. An offer is an important document because it is the employment contract between you and your employer. So even if the employer wants an answer quickly (which is common), take it overnight and think about it. Most employers will allow anywhere up to seven days for you to make a decision.

Mistake #7 – Thinking there is plenty of room for negotiation

Don’t be fooled into thinking there is plenty of room to negotiate once an offer has been made. Contrary to what some candidates think, most employers are not trying to take advantage of you by giving you a low-ball offer. Unless your prospective employer is unscrupulous, you can assume that the offer is within a reasonable range of what they feel the job is worth (or what they can afford to pay.) So while you might be able to move the salary up a notch or two, it is probably no more than within the 5% – 10% range.

In other cases, there is simply no room to negotiate. Often not-for-profit organizations operate with very tight budgets and cannot afford to pay more than the stated salary, no matter how strong a candidate you are.

Mistake #8 – Focusing only on base salary

What you should think about is “total” compensation and not just base salary. I have seen many salary negotiations go off track because the entire focus is on base salary. What sometimes gets lost in these discussions is the overall value of benefits, pensions, memberships, parking and other perks. In fact, a job with a base salary of $50,000 could have a real value of over $60,000 when everything is considered. Smaller organizations who cannot afford to pay you more may be willing to throw in non-cash forms of compensation, such as extra vacation time.

Gerald Walsh is an executive recruiter, career coach, public speaker and writer. During a 25+ year career, he has interviewed more than 10,000 job candidates, completed hundreds of successful searches for a range of organizations and guided many individuals – from young professionals to senior executives – to successful career change. He is the author of “PINNACLE: How to Land the Right Job and Find Fulfillment in Your Career.” You can follow Gerry on Twitter @@Gerald_Walsh and LinkedIn