When you’re in the final stages of landing a new job, everyone you talk to is going to provide you with heaps of unsolicited advice on how to make sure you end up with the best possible salary.
You will likely notice that this advice can range wildly, often be quite contradictory, and frequently seem somewhat counter-intuitive.
Given just how vital salary-negotiation is as you’re planning out the next stages of your life, and the likelihood that it’s going to be at least a year before the subject comes up again after you sign a contract, it’s worth giving it some serious consideration. It’s also important to remember that when discussing your next compensation increase it’s all going to come back to this original starting point.
With all this in mind, here are our top salary negotiation mistakes to avoid as you work to land your next great gig.
Not Knowing What You Absolutely Must Earn
You might be surprised how many professionals haven’t thought about what their base compensation needs are. Everyone likes to answer this question by saying, “as much money as possible”, but all too often this fails to consider the realities and intricacies of funding your life.
If you’re a professional looking to change companies, start with a run through of your personal expenses before sending out your CV. Do you have a mortgage? Kids in daycare? Debt to pay off? A partner who stays at home? What about saving for retirement? Does your current employer have a pension plan, or match RRSP contributions? Thinking about your long-term goals, both professionally and for your family, and then matching them against your current income and total annual expenditures is going to start to give you a clearer picture of what you NEED to earn and an idea of what you would LIKE to earn, now and into the future.
Not Knowing What You’re Worth
Salary is one of those topics, like religion and politics, that we have been told over and over again not to discuss. This cultural taboo has played out very well for employers over the years who can readily assume that most staff have no idea what their colleagues are earning, not to mention what other comparable employees are making at other firms.
Of course, this is slowly starting to change. Many professional associations are providing detailed breakdowns of what the average salary is for a particular job type in given cities across the country. Companies like ours are starting to provide detailed salary guides available for free. And, if you’re working with a recruiter, they should have a good idea of what companies are willing to pay for a given position in your area. There are also more tools available online to help you start getting a sense of the market. Industry publications are also a great place to look, for example, IT World Canada maintains an annual salary calculator that gives you a comparison by city, across the country and if you are looking more generally, the PayScale salary calculator for Canada is a simple way to compare positions. If you match what you’re able to find online with the expertise of a talent search professional, you will have a good idea of what you can command in the marketplace for your skills.
Canadians, in general, are not the negotiating type. It’s not that we can’t do it, but more that we are used to a culture where you pay what’s on the price tag, and you either accept or decline a given offer. As a result, people are accepting offers below what they really want to earn or walking away altogether from an offer without asking if there is room to move on the salary. Of course, the earlier in your career that you are the more this tends to be the case.
A 2017 American survey by Career Builder really brings to light what’s being left on the table by simply accepting the first offer at face value. “More than 3 in 5 employers (63 percent) say they feel they have to pay workers more because the market is getting more competitive for talent.” However, “more than seven in ten workers (71 percent) have accepted a job when they knew their skill set and experience were worth more than what they were getting paid.”
Now keeping in mind that a job offer is not a bazaar and you are not here to haggle relentlessly, you do want to get a fair offer that sets you up for positive career growth. Respectfully asking for additional dollars, within reason, should be a good conversation and should ultimately provide some concessions in your favour. A great example of how even a small win early on is helpful can be done with a simple calculation. Imagine you are offered an annual salary of $50,000 and you take it. Assuming a cost of living increase of 2% for 25 years your salary at that point will be $82,030.30, and you will have earned a total of $1,633,545.29. Now, if you negotiated a slight increase up to $55,000, those same variables will give you an annual salary of $90,233.33 at the end of the same 25 years and a total earning of $1,796,899.80. The difference over those 25 years is $163,354.51. Of course, what’s likely to happen is that some of those years will be better than a cost of living increase, but the percent gets added on and compounded just the same.
Not Knowing When to be Quiet
There is power in silence. Too often when people are interviewing and hearing about the finer details of a given position, they feel a need to fill any bit of quiet and usually end up selling themselves short. If you’re expressing how interested you are in a job, let the sentence sit there when you’ve finished. Too often, in the nervousness of the moment, the applicant jumps into the void with the minimum salary they would be willing to accept or by telling the interviewer just how flexible they are. In not wanting to lose the opportunity you’ve demonstrated that you are ready to bend any which way to get this job.
Let the interviewer see that you are confident in the room. You are the right candidate and worth the money. By no means should you stare out the window in disinterest, but if you have concluded what you were saying and the interviewer is taking it in, let them do that. They may just volunteer precisely what you want to hear, at a salary that’s better than what you would have settled for in your instance of panic.
Asking About Salary too Soon
Sometimes this is going to be unavoidable as the company will force applicants to provide a salary range before the interview. However, it’s another reason why it’s so important to know your value to the organization ahead of time. If a salary range has not been requested, try to leave it until you’ve talked through the position entirely. Not only does it give the employer a chance to see your interest in the position first, but it also allows you to truly sell yourself before discussing what number value you are going to put on your skills.
Forgetting About Benefits
It can be too easy to fixate on the gross salary number and sometimes, when it isn’t quite as high as you hoped, to write off the position entirely. However, before you do that make sure you have discussed what sort of benefits the company offers in addition. There are the basics, like dental, vision, prescription, and life insurance, but there could also be a pension or a matched RRSP contribution, or maybe a car allowance, a cell phone, a laptop, or even orthodontics for the kids. Everything the company is willing to provide should be considered as part of the total compensation. If you are considering multiple offers or just comparing it to your current employment situation all of these items should be considered side by each. A slightly higher salary may not mean anything if you now have to pay for braces for three children that would have been covered with your current employer.
Accepting Right Away
Everything has gone perfectly. They love you and have offered you a good salary for a job you really want to do. Don’t except it on the spot. Thank them and tell them you will get back to them shortly with your answer. Give yourself the benefit of walking away and thinking about the position and the offer with a clear mind. Even if they are pushing you for a quick answer, ask them to give you at least until the morning. This is your career, and you want to make sure you are doing the best thing for you at this moment.
However, don’t call them back and surprise the interviewer with a request for an additional $10K. At this point, your negotiation should be concluded. If you wanted to ask for more money, you’ve already done it. This time of reflection is really about thinking clearly and assuring that you feel confident you’re ready to commit to this company for this next chapter of your working life. An additional big ask will only serve to make you look greedy, and odds are it will not help your reputation in your industry.
Not Getting it in Writing
No matter how much you and the interviewer get along. No matter what promises are made, what handshakes or assurances are given, don’t make any bold moves, like quitting your existing job until you have the offer in writing. People are prone to get carried away, both you and the employer. While you should trust that they are negotiating in good faith, be sure to have the final offer on paper before you consider it a done deal. The agreement is final when you’ve have something to sign.
Of course, there are always going to be more tips out there, and adding a few more pointers from a mentor with years of experience can’t hurt, but if you find yourself unsure, just make sure you have these bases covered! And, no matter how confident you feel, there’s no harm in checking in with a good recruiter, like LRO Staffing to shore up your confidence and be sure you’re ready to go!