Salary Negotiation: Top Mistakes To Avoid [Video + Transcript]

By Hollowell Hooks, Host

December 3, 2021

11-minute watch

Most people feel a little nervous discussing money, myself admittedly included. When we're asked, “What are your salary expectations”, it can feel like a trap that's going to force us into asking too much, too soon or too little, too late. We compiled the advice from career coaches here at Indeed, and I'm here to share the three most common mistakes that people make when negotiating their salaries and three strategies for how to avoid them. We will also explain what an employer expects during salary negotiations and provide real-world examples along the way.

Be sure to stick around to the end for an example of a strong response to give a hiring manager when they ask you, what are your salary expectations?

Salary negotiation mistakes to avoid

So first let's quickly understand salary negotiations from an employer's point of view, because it's key to understanding how these mistakes and miscommunications often occur.

Hiring is a time-consuming process for everyone. Most employers will ask about salary expectations on the first phone call because if there's an insurmountable gap between what they think the job is worth and what you as an employee want to be paid, it's just going to waste everybody's time.

Pro tip: If a company is small or a startup, they may actually be using the "What are your salary expectations?" question as a way to do a general market survey for figuring out how much they should actually be paying someone for the role.

With established companies, it's very likely that they've already had HR do market research to figure out what they believe that role is worth and how much they're willing to pay for it. It's a myth that a hiring manager has full autonomy in how much they can pay someone. Typically, they do have some wiggle room, more than what their initial offer is, but particularly in uncertain economies, it's really not as much as you would imagine.

Another myth is that employers will typically choose the cheapest candidate or the person who provides the lowest salary ask for the role. Well, obviously everyone would love to conserve resources. The saying goes, "You get what you pay for," and that's definitely true in a lot of cases for hiring, all that to say, as a job seeker, it's wise to understand that there is a cap on what an employer can offer you. But low-balling your salary doesn't necessarily guarantee you a competitive edge to getting hired.

Instead, do market research on what people with your qualifications and years of experience are typically paid, and then assess what you believe a fair but attractive offer would typically be. If you'd like to learn more about salaries across locations for that market research, I highly recommend checking out Indeed's Salary Calculator right there.

So now that we understand the factors that an employer typically is considering during salary negotiations, let's talk about the common mistakes job seekers make when discussing compensation.

Salary negotiation mistake #1: Being the first to disclose a specific dollar amount.

In the past, recruiters were trained to get their candidates to reveal their salary expectations first. Now, recent legal changes have limited how far they can really go in pushing you to answer that question, but the same generally holds true today, that they're going to want you to reveal your number first. You, of course, want to be obliging in the interview process, but in this particular instance, go ahead and flip that question back to the interviewer. Companies are already at an advantage here in this interview process, because they have their own historical salary data and they know how much they're willing to pay for the role.

So let's take a look at a real-world example here. Let's say an employer is doing an initial phone screening with you, and you're asked, “What are you looking for pay?” Now, you can go ahead and just respond with something as simple as, “It's so early in the process that I'm still learning what the role and responsibilities are, so my expectations are flexible at the moment, plus there are many other considerations that I make when it comes to joining a new company beyond pay.” But flip then the question to them and say, "What have you budgeted for the role?"

Another common way that employer will try and get at this answer from you is to ask about your salary range, so they're trying to basically see how flexible you are and then levels of expectations as needed based on how big that gap is between what you want and what they desire. As a candidate, however, you can certainly ask, “Well, what is the salary range for this position?" or "What are comparable salaries for people already in this role?"

This leads us right into our second rule, but before I hop into it, I would like to just quickly say if you've watched this far and it's been helpful, please give us a “like” and subscribe down below and hit the notification bell.

All right, Mistake #2: Waiting until the final step to discuss compensation.

Sometimes salary isn't brought up until an offer is on the table. This typically happens from a broken hiring process caused by an assumption by the employer that you'll just take any salary or other issues that you aren't aware of. Regardless, while you don't want to be the first to reveal a dollar amount, you definitely don't want to be in this situation either.

Actually, it's in everybody's best interest to discuss salary before a final offer, because it's a lot of time and resources on both parts. Not only does this maximize the efficiency of the process, but it also avoids an anticipation cost on your end. If you're spending a lot of energy and resources and have excitement building up preparing for this final offer only to find that it's completely impossible for you to make it work, that's a worst-case scenario for sure. So it's advisable to go ahead and disclose prior.

Now, if you've had a phone screen and one or two interviews already and you don't get the sense that the salary conversation is coming up any time soon, it's advisable to go ahead and bring up money. You can say, "I'm really excited about this opportunity. What salary have you allocated for the right person?" Or you can say, "The job posting wasn't really specific about the hourly rate, what is that?"

There's one critical consideration to make here, which is to be careful about who you raise this topic with. If it's the HR person that you're interviewing with, a potential manager or a higher-level executive, that's fine. Go ahead and ask them about the salary range. However, if there's someone within the organization that would be at your level or lower that you're speaking to, it's not advisable to ask them.

Mistake #3: Focusing only on salary.

This sounds counterintuitive. We all work for pay. If you aren't getting paid, you are volunteering. But, focusing on the take-home salary and income specifically can actually obscure other important factors that are necessary to consider when making such a large decision.

So the first factor here is to really understand what you are worth and what is standard, not only in terms of salary but the full picture.

What are typical compensation packages? To get an understanding of this, I would absolutely, of course, recommend checking out Indeed's Salary Calculator for a sense of just salary, but you can also speak with people in comparable positions for what their standard compensation package has been throughout their career experience. And finally, you can even reach out to recruiters who are unaffiliated with those interviewing you to try and get a sense of what's standard in terms of a typical offer overall for this type of role.

So the next step here is to have an honest conversation with yourself and what you value most in getting out of this opportunity. So I have a few considerations and questions to ask yourself written down here:

  • What pay would make me feel valued in the long term?

  • How does this job get me to where I want to go developmentally?

  • Is the scope of this job reasonable for the expected rate or would I quickly feel resentful if I wasn't given a raise?

  • And then finally, what is my walk-away number?

Like I said, giving a salary range, you'd like to generally avoid in a first conversation. It's definitely valuable to create one for yourself. What is the bottom number you would expect before this just isn't worth your time? So a drastic, obvious example would be if you know that the compensation for your role and experience is typically six figures, you would probably walk away if you were offered $75K.

So once you've assessed your market value and you've determined what's most important to you to get out of this opportunity, then examine the full compensation package. So this, of course, is really important when it comes to take-home salary, but the point of this tip is basically, don't focus only on that.

Consider all the other pieces of the puzzle. If it's benefits, if it's organizational development, all those things are really critical to consider. So read that contract line by line.

What is the health care coverage like? What are the retirement benefits? Do you get equity in the company? What is the value of PTO? Two weeks off is a full paycheck, for example, if that's compensated.

There are also other benefits to a job, like a flexible work schedule or a shorter performance review cycle that might make you eligible for a raise sooner. All of these things not only pose as benefits to you or things to consider when taking the job, but they are just as much on the table for negotiation as take-home income is.

So for example, if they can't raise their cap on the salary in order to get you to sign, maybe they'd be more receptive to giving you another week of PTO or a shorter review cycle so that you can prove your value more quickly and potentially be eligible for a raise sooner.

And of course, if you're considering multiple job offers, play them wisely against each other rather than just taking the first one that clearly might seem like it pays a bit more money. Of course, if there's a big gap, that's notable and something that would necessitate some more evaluation. But if the difference is $5K or $2,000 less a year than you'd be making one place versus the other, it's really worthwhile to consider career development factors, the full range of benefits, because, between opportunities for a bonus or quicker promotion, that difference is really going to even out pretty quickly.

recap of salary negotiation mistakes to avoid

So to quickly recap, here are three common mistakes to avoid when negotiating your salary:

  • Don't be the first to reveal a number. Instead, flip that question right back to the interviewer.

  • Don't wait till the final offer to discuss compensation. Instead, know that it's OK to bring up money.

  • Don't focus only on your base pay. This applies to both negotiation and when making your final offer decision. Instead, know that there's a lot of other factors that may be more important to you.

If you found this video helpful, please let us know by liking down below and subscribing to our channel right here. For more interviewing tips, I highly recommend checking out this playlist:

You can also check out this video for formulating a great elevator pitch:

Thank you so much for watching. Best of luck negotiating, and I'll see you next time.

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