How To Negotiate Salary Offers Once You Land The Job

Aimee at CareerCake says that when an employer asks you about your salary requirements, you should deflect the question and see if you can get the employer to answer instead.  Here’s my take:

At Catch Your Big Break, we warn repeatedly about the perils of following advice from friends, family members, and even so-called experts.  Instead, we teach clients to look for scientific support for any claims about how to conduct an effective job search.  This YouTube video is a perfect example.  When it’s time to negotiate salary, common advice is to let the employer take the lead.  In this video, Aimee explains why we’re all predisposed to follow this advice.  We’re afraid that we won’t get an offer if we quote to high of a salary expectation, and we’ll lose money if we quote to low.  So our fears drive some unrealistic expectations, and we miss out on making the big bucks because we failed to consult the research.

Before getting into the nitty gritty details, let me say that I’ve personally found that it’s important to have salary conversations at the right time.  As a manager, I’ve dismissed candidates from contention when they bring up salary too early in the conversation.  It seems presumptuous, and shows a lack of focus on the bigger picture that I personally prioritize in the people I choose to hire.  As a candidate, I’ve always found it helpful to take one step at a time.  First, a manager has to decide that I’m the best candidate for the job.  Then, and only then, we should talk about money.  Until that point, I defer them with a comment like, “I wouldn’t be here if I hadn’t done enough homework to think we can come to an agreement on salary.  With that said, I’d prefer to establish first whether I’m the best candidate for the job.  Then we can talk salary after that’s done.”  That’s the process I teach clients because I’ve found it to work, based simply on personal experience.  Now, let’s talk about the research.

If you want to negotiate salary and get the best offer possible, you should be the one to make the first offer.  Studies by Galinsky (2001) and Thorsteinson (2011) both showed that when the candidate provided the starting point for salary negotiation, there was an “anchoring” effect that resulted in a better final offer compared to a control group.  Even candidates who gave very high or extremely high first offers (like $1 million dollars per year) as a starting point ended up with better salaries than those who did not.

One strategy suggested in the research is to offer an extremely high offer as a joke, which still serves to anchor a high price in the employer’s mind, and influence the final offer in a positive direction.  For example, a candidate might say, “thank you so much offering me the job.  Now let’s talk about my million dollar salary and benefits package. … Ok. I’m kidding, but can we talk about what a fair salary would be?”

This advice is anything but mainstream.  Ask ten “experts” who should make the first offer in a salary negotiation and the majority of them will likely defer to the employer.  That still doesn’t make it the best decision.  Numerous studies have shown the benefits for the negotiator who starts off by making the first offer.  The research cited above shows that these results apply to salary negotiations.  Before you trust your paycheck to intuition, popular wisdom, or the advice of someone with a fancy title and a  YouTube channel, check the facts first.  Read the research for yourself, and make a decision based something that’s been objectively proven in the scientific literature.  You won’t regret it.