salary negotiation mistakes that are costing you money

Salary negotiations are one of the most nerve-wracking parts of job-hunting – and because of that, people often make mistakes that end up costing them big money down the road.

Here are five salary negotiation mistakes to avoid in order to maximize how much money ends up in your paycheck.

1. Not asking for more. Not negotiating at all is probably the biggest salary negotiation mistake people make, often because they feel awkward asking for more money or they’re worried that the employer will be outraged and pull the offer. But as long as you make it clear that you’re really interested in the job and excited about coming to work there and a you handle the negotiation in a pleasant and non-adversarial way, no reasonable employer will pull an offer simply because you asked for more money.

Of course, there are also cases where it makes sense not to negotiate, such as where the employer has made clear that they’re offering the top of their range, or when they offer you the high end of the range you stated earlier (in which case you might look like you’re not operating in good faith).

2. Basing your salary request on your best guess of what’s reasonable, rather than doing thorough research. A surprising number of people decide what salary to ask for based on what they’d like, what they need, or what they guess the role pays. If you do that, you can end up severely undervaluing your work. Instead, it’s crucial to research the market rate for this specific type of job in your particular geographic area. You can do this by bouncing figures off of other people in your field, checking with professional organizations your industry, and talking to recruiters. You can also check online salary sites, but be aware that they’re not always reliable, since the job titles they list can represent widely different scopes of responsibility.

3. Letting the employer base a salary offer on what you’ve earned in the past. Your salary history is none one’s business but yours, and employers should be able to figure out what your work is worth to them without knowing how other employers priced it. And if you let an employer base your salary on your last job’s wages, you’ll miss out on the large jumps that are often only possible by changing jobs.

If a prospective employers asks what you’ve been earning, try sidestepping the question by answering with what your salary expectations are now. If they press, consider saying that your past employers want that information confidential (it’s often true!) but that you’re seeking $X.

4. Agreeing to put off a raise without a firm agreement in writing. I hear from a lot of readers who say things like, “My employer said we could discuss a raise in six months, but now it’s been eight months and it’s never come back up.” If you agree to delay a discussion about a raise, make sure that you have a written agreement and a specific timeline for that discussion to happen. It doesn’t need to be formal; you can do it with a simple email that says, “I just want to confirm that we’ve agreed to revisit my salary in June 2016 once we have more results from the X project.” Or, if your employer has told you that you definitely will get a raise in six months (as opposed to just discussing it), document that with an email saying something like, “I just want to confirm that we agreed to raise my salary to $X in June 2016.” And of course, once that time rolls around, raise the topic yourself; don’t rely on your employer to raise it or you may lose money while you wait.

And if you’re thinking of doing this when accepting a new job, be especially cautious. Candidates sometimes agree to a lower starting salary and an informal agreement of revisiting it in six or 12 months, figuring that once they prove themselves, it will be easier to get a raise later. Sometimes that works out, but it’s a gamble – and your negotiating power is at its strongest before you’ve accepted a job rather than once you’re already working there. In general, it’s smartest to do your negotiations up-front, before you accept the offer.

5. Asking for a salary range if you wouldn’t actually be happy with the lowest end of it. Too often, people give a fairly wide salary range (like $50,000 to $65,000) and then are disappointed when the employer sticks to the lowest end of it. But when you give a range, you’re saying that you’d be happy with anything in the range – and that includes the lowest part of it. So you want to pick your range carefully, or be prepared to argue about why you deserve the highest end of it (such as learning that the job has more responsibilities or longer hours than you’d originally realized).

I originally published this column at U.S. News & World Report.

{ 46 comments… read them below }

  1. Anon Accountant

    Is it awkward to contact a recruiter and ask about salary? As in a recruiter from a staffing agency? I’ve never done this and am curious if that was considered acceptable.

    1. T

      When asking for advice, make sure you consider the source’s motivation. For example, I got my current job contract-to-hire. When negotiating my contract, I thought it would be a good idea to discuss it with the recruiter that placed me. After all, he knows the market very well (I relocated) and has placed other people at my company so he would most likely know what salaries they negotiated. I was always taught to ask for slightly more than you think you can get but not so much that it is insulting or eliminates you from consideration. If they top out at $70K, they would not show you the door if you ask for $75K.

      The recruiter told me to ask for $65-70K, based on the market and the company. That seemed low to me so I asked for $80K and it was accepted without hesitation. That makes me think the recruiter may score points with my employer (leading to additional contracts) if he not only provides quality people but they also take lower salaries. Of course, it could also be that he underestimated how bad they wanted me.

      1. Anonymous Educator

        Is this an internal recruiter or an external one? An external one can often be motivated to get you a higher salary, because her commission will then be higher.

        1. PEBCAK

          Right, but if the deal falls apart, they get zero. So they will try to negotiate the employer up, and the employee down.

          1. Anonymous Educator

            I’m not sure what you mean about negotiating the employer up but the employee down. I know not all recruiters work the same way, but I used to work for a recruitment company (external), and the clients paid us a percentage of the hiring salary, so negotiating the employee down would mean negotiating our percentage commission down.

            1. Iain Clarke

              Option A)
              Spend days going back and forth to maximise commision, with a significant risk of getting nothing.
              Option B)
              Spend a lot less time getting slightly less commission, and with a much greater chance of it happening, so they can move on to the next sale?

              It’s the same with real estate – the agent is more interested in getting a slightly smaller safe sale, than a risky big one.

  2. Kyrielle

    “You must negotiate” was so ingrained in me, I felt odd about *not* negotiating…but they offered _above_ my original ask, and I’m pretty sure at the top of the range for the position based on what I’d found. And I was more than thrilled with the benefits. So it’s nice to see an article that basically seems to suggest I did okay there. :)

    1. Anon Accountant

      If the benefits are great and the salary is good then it sounds like it all worked out well. :)

    2. Anonymous Educator

      Yeah, if they’ve gone above your top range (which presumably is also above market rate), no need to negotiate.

    3. Solidus Pilcrow

      I also got more than my original ask for my current job and I feel very satisfied about not negotiating. I needed to move for the job and the new area had about a $3k/yr cost of living increase from my original area, so I would have been happy with my current salary +$3k. They offered me current +$5k. :) They also covered the bulk of my moving expenses.

  3. CrazyCatLady

    I tried to negotiate salary for the first time on a recent job offer. The hiring manager agreed to give me 10% more, but before he presented the revised offer, I turned down the job. But I felt really proud of myself for trying at least!

  4. BioPharma

    Ugh, I’ve experienced the last one, where I was simply offered the low end of my range, which left me wondering “WHAT IF.” What do folks think about providing an average expectation instead of a range?

    1. CrazyCatLady

      I think Alison posted someone’s comment recently about how they said something to the effect of: I’d have to really consider leaving my current position for less than $X. I really liked that phrasing, because you’re not giving a range. I feel like when you give a range, they’re most likely to start at the bottom or the middle at best.

      1. Bio-Pharma

        I feel like that would work when the candidate is really being recruited, but not so much when it’s for a job you REALLY want. (at least mentally, it would be scarier to state it that way) What’s interesting is that one would think that getting a job you REALLY want, within a range you want (but at the bottom) would be completely good news, but it’s weird how we can be greedy? anxiety-prone? enough to still think WHAT IF.

  5. Diluted_TortoiseShell

    The wide range is interesting. I usually leave a wide range, because it really depends on the benefit package. However I”m very clear that it depends on benefits.

    If you are going to over me 6 weeks of vacation, highly subsidized health, dental, and vision insurance with a 6% 401K match program than by all means $50K is great.

    Try to over me $50K when you only offer 2 weeks vacation, crap health insurance, and 2% 401K? Then no you need to offer me the $65K.

    1. CrazyCatLady

      That’s a great way of phrasing the whole range thing. Sometimes I feel like when you say “depending on the benefit package” they don’t necessarily realize how huge of a difference it can make.

      1. Not a Real Giraffe

        Sometimes it’s hard for us as candidates to realize how huge of a difference it can make, too!

        When I accepted New Job, I negotiated because I felt like I should, and got one whole thousand dollars more than the original offer (which was already basically the same as what I was making at Old Job). Thank goodness I got that $1k, though, because benefits were significantly more expensive! That $1k bump made the difference between making more than Old Job or making less.

    2. AdAgencyChick

      +1. I think if you have a convincing case for not being willing to accept the bottom of your range, you can make that case without pissing off the recruiter or hiring manager.

      1. Jake

        Agreed. The issue I’ve seen more often though is that during the interview phase the candidate is so happy and hopeful that they think they are willing to do the job for less than they actually are by the time the offer materializes. It just doesn’t feel real until they are trying to decide whether or not to take it.

    3. Jake

      Yeah, I didn’t realize how big of a deal having a $5000 dollar deductible on my health insurance was going to be while I was negotiating, so I accepted the other generous benefits thinking it was a great package, so I’d accept slightly lower salary.

      Then I paid the full deductible twice in a two month span. Boy was that a mistake. The next time, I saw a high deductible and used that as leverage to negotiate both more vacation and a (slightly) higher salary than I had originally presented as what I wanted.

      1. Not a Real Giraffe

        Ouch! I am specifically putting off going to the doctor until January for this exact reason. (I started my job at the beginning of this month and don’t want to pay the deductible in December and then again when I go in 2016.)

    4. T

      I would personally rather have a higher salary. Benefits can change from year-to-year or they shift the percentage you pay if the company starts struggling. Same with 401K match. My previous company stopped matching completely for three years during the recession (and raised the employee’s share of benefits costs from 70% to 85% and stopped all raises). My current company decides on a year-to-year basis whether they are going to match 401K. Last year we got 50% of our match and the year before we got zero. A company could technically lower your salary as well but I would think that would be the final step before layoffs for most companies.

      Before the recession, none of these things would have even crossed my mind.

      1. Anxa

        Same. I’ve never had a job with benefits. I’ve worked full-time for all of 5 months. I don’t really understand a lot of what I’d be missing out on, but at this point in my life, I’d love the cash to pay down my debt.

        As for health insurance, I’ve been self-insured my whole adult life; I can’t imagine being on a group plan. I would like to make enough to afford it on my own without going into debt to pay the premiums.

    5. Ad Astra

      This is absolutely right. A lot of employers seem to think their benefits are awesome when, in my evaluation, they’re pretty average. Which is why I usually bump up the bottom of my desired salary range. Sure, I might take $50k (for example) if the benefits are awesome, but I’d probably request something like $52k on the assumption that the benefits are just ok.

  6. Dan

    Candidates like accepting the bottom end of their “range” just as much as employers like actually offering the higher end of theirs. Employers will come on here and say that they don’t like publishing ranges because candidates expect to get their higher end of it, and are disappointed when they don’t. Yet employers get frustrated when candidates don’t like accepting an offer at the lower end of the candidate’s.

    When I am expected to provide a range up front, I’m acting with imperfect information that any reasonable employer should understand. When I’m undergoing a nation-wide job search, and providing salary expectations during the initial application is expected, those expectations are a function of 1) The cost of living, 2) The benefits, 3) the demands of the job, and 4) what other employers are willing to pay me. Many of these things are not known a the time of application.

    I remember once giving someone a low-ish range at the time of application. As my interviews and interest started heating up, I realized that it wasn’t necessary to accept an offer at the bottom end of “my range.” Sure, I put it down, but I am not obligated to accept any offer, let alone the lowest offer. If it doesn’t work out? Then so be it. That’s business.

    1. Ad Astra

      I definitely think it hurts more to accept a job at the bottom end of your desired salary than it to accept one at the bottom or middle range of the company’s stated salary. When the company states a range, you at least know that they’re not trying to lowball you (or, they’re trying to lowball everyone equally). When it’s the candidate’s stated range, it’s harder to feel confident that you’re getting what you’re worth rather than what the company thinks it can get away with.

      Obviously doing your research helps these situations, but candidates who are disappointed they didn’t get the top range of a company’s stated range are not typically candidates who do their research before negotiating salary.

    2. JM in England

      Whenever a recruiter calls me and asks my desired salary range, I reply that it largely depends on the cost of living wherever the job is based. Here in the UK, it can vary widely. Can verify from personal experience that it is most expensive in the London/South East region, whereas in the North East, your money goes a lot further………

  7. Mabel

    I once accepted a job with the understanding that we would revisit my salary in three months. I had it in writing, in a letter from my manager. However, about 2.5 months after I started, the company split into three separate companies, and the entire department was laid off. They did give us three months’ notice, though, which was very helpful because, of course, I didn’t get any severance pay (I don’t know if people who had been there longer got severance pay or not – I think they probably didn’t).

  8. Brett

    As a sidenote, I think I recently ran myself out of a job opportunity by giving way too low of a salary expectation.

    I talked with directly with the company’s recruiter, and my salary expectations were about a 25% bump from my current pay. They reacted fairly negatively to what I asked, and I did not hear back from them anymore. I assumed it was because I asked too much.

    Well, the position ended up going H1B, and they paid a level IV wage (~60% more than what I make) to someone with less than 2 years experience. Now I realize that my low salary history and low salary expectations probably made them doubt my qualifications.

    1. Brett

      Well, nevermind… thinking about this made me go lookup the LCA. It might have been listed as Level IV, but they ended up paying a level I wage that was slightly less than what I currently make (and well under my salary expectations). Surprised the DoL didn’t wonder about the disparity when they approved the application.

  9. Mockingjay

    5. “Too often, people give a fairly wide salary range – like $50,000 to $65,000 – and then are disappointed when the employer sticks to the lowest end of it.”

    If pressed to give salary, I provide a range and the caveat “depending on benefits.” Looking back on previous offers and interviews, my range was too wide – at least $8,000 to $10,000 between low and high, sometimes more.

    Guess I really need to narrow the range. The autoselect salary ranges on online applications don’t help either.

    1. Dan

      Why do you think $10k is too wide? $10k is easily the difference between great health insurance and crappy health insurance, 401k match, and vacation allowance.

    2. Ask a Manager Post author

      I think it depends on what the numbers are overall. With $150k-$175k, that $15k range is pretty normal, whereas it’ll seem way to wide if the salary range is $25k-40k.

  10. The Expendable Redshirt

    My current role is very ridged salary wise due to funding coming from a government grant contract. Though my supervisors would very much like to increase the salary, that is NOT happening. Its more realistic to decrease the client load or ask for other benefits than petition for more funding. Negotiating for a larger salary doesn’t always work.

    1. fposte

      Sure, but nobody said it did. It’s just that people often don’t negotiate when they could and should.

      1. The Expendable Redshirt

        Yup. I’m just saying it’s nice to read an article saying “It depends!”
        Lots of the time negotiating is the best idea. But sometimes (like the article notes) negotiating isn’t needed.

  11. GrumpyandSleepybutNotDopey

    What about negotiating for an internal move? And, if a new role would involve moving to a completely different department but for only 3k more, per year? The industry is not a highly paid one but the salary offered is on the high end of the range for industry average. I have a few years valuable experience but nothing related to the department.

    1. CharlieCakes

      This is me!!! Different department, valuable experience but not related to the new department, but the new position will require a lot more of me and it warrants a higher salary. I asked for a 15-25% raise….got 12.5%

      I was bummed (scenario #5 if you will) but this was internal and government so their hands are tied.

  12. Althea

    In addition to what people have said about benefits and the wide range… it also depends on quality of life in the job. I might be happy to work at $50k if the hours are generally 40 per week, but if it’s a workaholic culture of consistent 60 hours per week? No way. $65k top of the range or bust. That kind of thing is very important to me. It’s pretty hard to know that aspect until you’ve completed at least one interview, sometimes more.

  13. Vorthys

    I’m decidedly late to this one, but on the off chance:

    IEEE members! Get your salary reports! If you participate with their regular survey, you get five report generations for free, giving you plenty of space to put together a reasonable estimate. It weights a variety of criteria and their relative effects on your expected base and total compensation, and shows you a range based on percentile.

    It doesn’t do all the work for you, but it definitely helps narrow things down.

  14. OG

    hoping someone can answers this.
    I’am applying for a job, and the job posting specifically states that the completed application must contain one’s salary history.
    I know the author of this site said to mention during an interview if that question came up, to say the company they currently work for says that info must be kept confidential, so can I list that on the resume as well?
    If the HM can use their google skills, they can find the current company I work for, showing our job board with..the salary I made when I was part time since we have multiple positions. I also feel if I even make it that far, that they can justify starting me off at the entry level salary, because this position if hired at the 1st quartile can make more than someone higher up than me which requires an M.A., but that’s just the way my department runs sadly…

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