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Salary negotiations are a part of an effective, high-quality interview. Despite this, a CNBC report stated that only 39% of Americans engaged in salary negotiations during their job search. Furthermore, another research by CNBC reveals that by not shying away from negotiating salary, an average American can earn up to 13.3% or $7528 more than their current salary.
However, some professionals find it difficult to ask for a raise, while others dread the idea of negotiating their salary. Regardless of whether you are a veteran or new to a job search, salary negotiations can be a key tool to help you achieve the offer you deserve. While there are many salary negotiation tactics, here are a few common mistakes that you would want to avoid.
1. Relying on cognitive shortcuts
Cognitive shortcuts are essentially ways in which our minds can make inferences and form judgments. These shortcuts include the use of schemas, scripts, stereotypes, and other simplified perceptual strategies instead of careful thinking. While negotiating, we rely on cognitive shortcuts in situations where there is a lack of preparedness or lack of time to make a decision, which shifts the focus from the factors that are important.
For example, due to cognitive shortcuts, you might just focus on the salary instead of the whole package in the negotiation process. This affects your long-term job satisfaction. Additionally, there are emotional biases such as strong emotions (anger or sadness to name a few) that may pose an obstacle in a person’s rational decision-making process, leading to negotiation mistakes.
2. Not preparing thoroughly
One of the key mistakes that you can make when entering a negotiation is not researching thoroughly beforehand. Factors such as industry type, geography, and seniority level can influence your compensation package. Therefore, it is essential to be well informed to gauge if an organization is offering you what you deserve. You can do this by finding out the median salaries based on your criteria through websites such as Glassdoor, PayScale, and Salary.com. We recommend exploring the following questions while conducting market research for better insights:
- What is the average salary in my country for the target industry?
- What is the salary offered by similar organizations for the desired position?
- What does my experience look like in comparison to the role?
- What are my skills and certifications in relation to the role?
3. Not knowing your BATNA
Knowing your value is a great start, but a candidate is not ready for salary negotiations until they understand their BATNA, i.e. best alternative to a negotiated agreement. BATNA is the course of action that you can take if the initial negotiation talks fail and no agreement is reached. You can determine your best alternative to a negotiated agreement through the following steps developed by Harvard Law School:
- List alternatives: what could you do if negotiations fail?
- Evaluate options: how much is each alternative worth to me?
- Select the best alternative i.e. your BATNA: what would provide the highest value to you?
- Calculate your reservation value: after determining your BATNA, what is the lowest-valued deal that you’re willing to accept?
Having knowledge of the best alternative option can be an effective measure of a negotiation’s quality. It ensures that you know your walk-away point. This can push you harder during negotiations and help you land a better deal.
4. Assuming something is non-negotiable
Another common mistake while entering into a negotiation dialogue is assuming that things are non-negotiable and accepting whatever is being offered. Most job-seekers are uncomfortable with the idea of negotiating and hence, function with the assumption that things are not negotiable. Tying it to the previous point, if you do not calculate your worth or work out your BATNA, chances are that you’ll end up settling for a lesser salary. This would lead to smaller appraisals, thereby creating a sense of demotivation and dissatisfaction with the job.
5. Not aiming for a win-win situation
Regardless of whether you have negotiating experience or not, there is always an underlying fear in our minds of being taken advantage of or putting up with unreasonable demands. However, while negotiating one must channel this fear in a direction that helps create a win-win situation for both the employer and job-seeker. For instance, if the employer is unable to provide the salary amount that the job-seeker is demanding, then they may be able to negotiate more stock options, extra vacation time or a pick-up and drop service to the workplace. Therefore, we suggest focusing on establishing a good rapport with your employer to have an enriching negotiation experience.
6. Giving in to pressure
Undoubtedly, salary negotiations can be stressful, and feeling pressured to accept a job offer right away is normal. Nonetheless, if you let stress overpower you, it can lead to making incorrect or hasty decisions, which can become a cause of regret. Even the best offers should always be reviewed with a clear and calm head. In some cases, you need time to make a decision. If this is the case, don’t be afraid to communicate this, asking for some extra time from the recruiter. Additionally, take time to reflect through the interview process and analyze any red flags that the employer might have that may become an issue in the future. Therefore, it gives you a perspective of things over and above the paycheque.
Salary negotiation is an important aspect of molding your career trajectory. Therefore, being mindful of the above-mentioned common negotiation mistakes can help you understand the nuances of negotiation. This can enable you to improve your professional journey by making a gigantic difference in your long-term earning potential. So, rise above that invisible fear of negotiation and if you find negotiations intimidating and challenging, we would be happy to help you with our expertise.