3 Salary Negotiation Mistakes To Avoid

salary negotiation tipsYou look across the table and your eyes meet. You blink and then quickly look away. Was that a smile you detected? You hope so, because you were smiling, too. No, you're not on a date. You're at a job interview and it's going well. It's the second time you've met with the prospective employer and you feel like it's a really good fit.

You've gotten past the resume screen, the first interview and now the second is almost over. The employer has expressed definite interest in your services. The only question is what's it going to cost them? Now – gulp – it's time for the tricky part: salary negotiations. Salary negotiations are like a first kiss: You're thinking about it the whole time and nervous before you start, but once you get going, it should come naturally and be easy – if you follow three simple tips:

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1. Don't forget to negotiate.

Seems simple, right? But most people don't know that they can negotiate and few do. The reasons not to negotiate are emotional: What if they say no? What if they get angry? What if they decide they no longer want to hire you?

Calm down, tiger. Hiring is a very serious business and most employers spend a lot of their time thinking about recruiting and retaining the best talent. If they want you, they want you, and the fact that you want more money isn't going to stop them from wanting you. They could say no, but unless you insult them with your demands - $250,000-a-year for an entry-level job – they are unlikely to throw you out of their office.

So, always try to negotiate, no matter what – you really have nothing to lose.

2. Never, ever, ever make the first move.

If they ask you how much you want, you should say something like, "I'm really interested in the position and I'm sure we can work out an agreement that is acceptable to all." If they press, don't be afraid to come out and ask them what salary range they were thinking. The key is: Get them to throw out the first number.

More often than not, they'll have an idea of what they want to pay and they want to tell you a number that will make you happy. They could even surprise you by offering you a lot more than you initially expected and would have demanded. Either way, you'll gain a lot of information about what they hope to pay for the role.

By getting them to throw out the first number, you set yourself up to be able to ask for more, which is what you should almost always do (see tip No. 1). Hiring managers will rarely tell you the most they can afford to pay for a position, so there's always wiggle room.

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3. Know your floor.

This is the most crucial negotiation advice you can get: Know what the minimum is that you would accept and be happy. It's not about what you can afford; it's not about what you think you deserve; it's about happiness. What's the least you can accept and be happy? Ask yourself this over and over until you truly know the answer.

For instance, if you know that you won't be happy at a new job unless the minimum they pay you is $75,000-a-year and they initially offer $65,000 (if you followed rule No. 2, they've thrown out the first number), it should be very easy for you to tell them, "That's a very generous offer, but I can't accept for anything lower than $75,000."

Once you know your floor, you have tremendous power in the negotiation: You win no matter how they react to that statement. If they say, "We can't afford more than $70,000," you know that you need to decline the job offer. Why? Because you know that you will be unhappy making $70,000 at that job. If they say, "I think we can meet your terms," then you got what you wanted: a new job at a salary that makes you happy. And isn't that what it's all about?

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Joseph Richards

I agree with Ande.

Once you have been formally offered the job, (and have a good understanding of your market value is), you have the advantage if you give the first dollar figure because you will "anchor" that number in the negotiation. It will serve as a reference point for all future offers and studies have shown that the final number in a negotiation ends up being closer to the anchor number rather than the counter offers...

I help people negotiate their salaries: http://www.salarynegotiators.com/

August 09 2012 at 1:15 PM Report abuse rate up rate down Reply

Doing your homework before sitting down to the interview is absolutely crucial. We all get tightened up at the salary question. Don't forget that a generous benefits package can sometimes offset actual monetary compensation. The best overall approach is to look at the big picture.

June 30 2012 at 12:47 PM Report abuse rate up rate down Reply
Brenda Somich

Great article. I've always found that knowing what you're worth relative to others in your field or line of work is key to negotiating salary. Aside from being informed of what you should be making (highly recommend completing a salary survey at http://www.payscale.com/ ) you should always know how much your position impacts the bottom line and how much value your work adds to the business.

June 27 2012 at 2:03 PM Report abuse rate up rate down Reply

I dont find that asking for tax returns is that uncommon for some reason. I am not sure where or when that trend began, but alot of employers are doing it. I would like to know why the interview process takes weeks or months and also why 5-10 interviews at the same employer can be expected. You could be interviewed by potential co-workers all the way up through several managerial levels up to a senior partner. I realize that there are alot of people out there looking for a job, but dragging out the hiring process is not beneficial to anyone involved. You could have 6 great interviews at the same company and interviewer #7 is in a bad mood or is an overall jerk- then suddenly your denied and you have to start all over again.

June 24 2012 at 10:25 AM Report abuse rate up rate down Reply

As a business owner in a company with over 40 employees, by the time we get to the part where wages & beneifts are being discussed, we're pretty sure you would be a good candidate. And at that point, usually the 3rd or 4th interview, you're probably our first choice.

Now you will have to have disclosed your previous earnings by now and they will have been confirmed by HR as they do their due diligence. Unless you've been grossly underpaid, expecting anything over 20% of your previous salary would be egotistical. Also, it would be sending the message that money is your only concern. If you're in sales, that's good, otherwise it does not cast a favorable light on you.

Better to get a reasonable bump in your salary and negotiate a comprehensive "review" in 6 months. It tells the employer that in 6 months you'll see that I'm worth every penny and are willing to prove it and if the employer agrees, he's saying, "You prove it, I'll pay for it." That's a true win/win.

June 21 2012 at 2:04 PM Report abuse -1 rate up rate down Reply

It is pointless to hold your cards in this game. You loose all control and give them the control to name their price on you. You will then have to work hard to get them to go up. Much better for you to set your own price. Make them work to get you down.

Guaranteed they will ask what you currently make so their is no holding your cards. You can lie about it but better to be honest and negotiate from there. If you don't answer the question, they can hold that against you.

June 21 2012 at 11:58 AM Report abuse rate up rate down Reply
Toby Phillippe

I have to disagree Ande. I think this is spot one. You're each holding your cards in this game. Knowledge is power. What you know and they don't. I don't mean to say you need to be too devious about it. They want talent at the lowest price. You want the best job at the highest price.

I do agree that you to consider the less tangible aspects you mentioned though. Those can equate to a lot of personal happiness (or unhappiness). If someone paid me 20% more, but I have to commute 2.5 hours more, I would take the lesser paying job all things being equal.

June 21 2012 at 5:55 AM Report abuse rate up rate down Reply

This is bad advice. The only valid point they make is to always negotiate.

The first thing they will ask you is what you currently make and could ask for tax returns as proof. That will be the starting point of the negotiation.

If you let them make the first move, you become at risk of getting low balled and will then have to work to get them up.

Better for you to take what you currently make and ask for a 50% raise as a starting point. Set the bar high to leave negotiation room.

Also remember that your pay isn't the only thing you can negotiate on. You can also negotiate on equity/ stock options, bonus, draw, advances, signing bonus, and set expectations that if you meet certain benchmarks within a time frame, you get promoted, etc.

Whoever wrote this article does not seem very smart and is missing a big part of the picture.

June 20 2012 at 2:48 PM Report abuse rate up rate down Reply
1 reply to Ande's comment

I will guarentee you if I am at any job interview where the prospective employer wants to see my tax returns I will walk out the door without another word. That is stepping WAY over the line. I don't have to prove that I am worth what I am asking any more than they have to prove it's not worth that much to them. That's why you negotiate.

June 21 2012 at 8:42 AM Report abuse rate up rate down Reply

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