1. Failing to Realize the Negotiations Start with Your Resume
Salary negotiations start earlier than most people think; it really begins at the start of the interaction. From the way your resume looks and is written, to how you follow up and even during the interview process. If you showcase your background at a high level, and you come across confident like the professional that you are, you don’t always have to sacrifice pay due to being unemployed or overqualified.
2. Not Doing Your Homework on a Role/Market
You must do your due diligence regarding researching. Take the opportunity to research salaries in your industry that match your position on LinkedIn, SEEK and other platforms.
If you don’t know how much you’re worth, you’re not going to have the confidence to best sell yourself. A well-researched salary range will also be easier to sell since you’ll be able to back up your ask with data.
3. Neglecting to Ask About the Employer’s Budget
When asked what your salary expectations are, it’s important to ask the potential employer what they have budgeted for the role. You don’t want to under sell yourself as much as you shouldn’t go in with “guns a blazing” expecting top dollar.
If you don’t ask, you have no idea how close or how far off you are to their target. You could be leaving money on the table, or you could be asking for something far out of their budget. If you’re having a conversation early enough and are forced to offer what you’re looking for, preface your answer by saying that it’s based on the little you know of the job requirements at the given time. Your impression of the role at the end of the process may be very different from what it is at the onset, and what you learn may also change what it is you decide you’re willing to accept.
4. Blurting Out a Salary Range
If working with an agency we will always give you a min-max salary the client is willing to pay. So you go into it with a bit of an awareness on where there head is at, its rare but if they like you they might ask you for a number early on, you can respond by saying, ‘I am currently exploring various opportunities, and I can’t give you a number; however, I would love to see what you have to offer considering my skills and experience.’ If they still press you for your salary goal, offer them a number 10-15% higher than your desired compensation for the role. It will give you room for negotiation in case the company wishes to offer a lower amount.
5. Forgetting About Benefits Other Than Pay
There is far more room for negotiation if non-salary items are part of the discussion and many workers seem to forget that they have this hand to play. Incentives, benefits etc are making a comeback for sure.
Interestingly, 80% of workers would keep a job with benefits rather than take one that offered more pay and no benefits; furthermore, 55% of employees would be somewhat likely to accept a job with lower compensation but a more robust benefits package.
It’s these benefits that employees so quickly forget can be a vital part of any negotiation. Money is obviously the first thing people think of when determining their worth, and that is a good place to start. But more money often isn’t the only thing that can reflect a good performance. Extra time off, a better company car, a car space, a gym membership, more flexible working hours (not just around hours but also WFH versus time in the office) better incentivized payment structures, subsidised further education, time of for assignments & exams, time off to attend volunteer work all of these things are all key areas to consider when entering into employment negotiations.
6. Committing Too Fast
If you’ve been looking for a job for a long time, it may be tempting to accept whatever you can get. But jumping on the first offer that comes along can be just as disastrous as marrying the first person who asks you out on a date!
Give yourself time to think about an offer before accepting it (but not too long). If there are other stakeholders in your life, like a spouse or partner, discuss the offer with them and get their feedback. Sometimes, just a little space is all that is needed to determine whether a job is a great fit or a bad decision born out of haste or fear. If you do decide to accept a square-peg-round-hole type of offer, make sure you know why you’re doing it. It’s okay to accept the first port in a storm if your ship will sink otherwise, but don’t kid yourself that you’re doing anything other than that.
7. Playing Mind Games
A salary negotiation may feel like a dance at times, but if it’s resembling a high-pressure chess match, something’s gone terribly wrong. Resist the urge to play Jedi mind tricks or try to pull power plays. Don’t reject a good offer just to play hard-to-get. For the most part, potential employers aren’t trying to screw you over; if they offer you a position, it’s because they want you on their team, and are doing their best to entice you to join them. Holding out for something better, even when you want the position and you’d be happy with the offer on the table, is a good way to find yourself unemployed. This doesn’t mean you should settle for mediocrity. If the offer is too low, keep right on negotiating until it feels right, maybe accepting a slightly lower starting salary than you would have liked but then making sure that it is written into your contract that they will give you a pay increase to a certain amount after a particular period that you both agree on.
8. Not Accounting for Changes Due to the Pandemic
COVID has led to some reductions in salaries, therefore it will impact merit increases moving forward since the baselines have moved backwards. Other organizations have frozen merit increases across the board. As you look for a new role, it is reasonable to expect compensation levels at the pre-COVID levels, but you should be prepared for organizations to keep salaries low until some sort of business confidence returns and is established.
9. Settling for a Mediocre Offer
Probably the biggest mistake you can make is simply deciding to settle and accept whatever offer you receive; salary is typically negotiated the first time after your probationary period and then annually when you are performance reviewed. Settling for a lower salary than you are worth has some major negative financial consequences. It will not only set you back financially but can also eat at you until you begin to seriously dislike your job and/or employer, which is not fair to either party. Feel confident stating what you require as an annual salary and even mention what you were on previously or currently if its higher so they understand how you are already negotiating and coming to the party.
10. Not Paying Attention
Pay attention when interviewing at a new company to the surroundings. “Do people work from home? What do people like most about the company and the people they report to? Salary is important and making sure you sell your skills and your qualifications is important, but be a listener and make sure you factor in the perks, the work-life balance and whether the environment is somewhere you can excel. Even if the salary is great, if you aren’t right for the culture or it isn’t right for you, no amount of money will help you to do your best work there and you will end up miserable.
11. Over-Negotiating
Although under-negotiating is a common problem, over-negotiating raises a different set of concerns among today’s employers. For example, a firm recently worked with a candidate and employer through five iterations of an offer letter. The candidate in this case had very specific requests such as more bonus potential, different thresholds to achieve more compensation and even minute details such as certain days off.
Because the candidate was perfect for the role, the employer bent over backwards to accommodate the requests, ultimately delivering an offer that matched exactly what the candidate had requested. Surprisingly, the candidate used the new offer as leverage to approach a different company for another position. This tarnished the candidate’s reputation with both firms. To avoid this mistake, you should negotiate in good faith and stop when they reach what you have requested. That is the way to establish trust and build connections.
12. Not Getting It on Paper
Make sure the employer agrees in writing that the salary may be increased but cannot be decreased during the term of the employment. A written agreement is key for employees negotiating a comprehensive compensation package that includes bonus, equity and/or other unique remunerative benefits.