Don’t Make These Salary Negotiation Mistakes

Even with salary information available from many sources, it’s still easy to undercut yourself in salary negotiations.

In a way, it’s like shopping for a car. You can find a lot of pricing information online, but it’s a different story when you’re sitting across the desk from the salesperson. Talking about money with a human resources person or the hiring manager is intimidating.

If you feel like you’ve made a salary negotiation mistake, you’re not alone. About 61% of the workers surveyed in Robert Half’s 2024 Salary Guide said they agree to a salary that is too low.

Pay transparency laws in many locations supposedly give job seekers more power, but the published salary range may be useless. Still, the disclosure paves the way for discussing compensation earlier in the recruiting process.

Even if you’re staying in your current position or hope to get promoted from within, you can use guides to help you end up with the compensation you want. Before entering any salary negotiation, prepare yourself to avoid these stumbles. 

1. Not Doing Research

Take into account the position and the location. You may need to negotiate a higher salary if you’re going to be working in a high-cost-of-living area just to cover monthly expenses. If you are relocating for a new job, definitely look into the cost-of-living difference from where you are now to where you’re going. Minor differences in rent or mortgages, utilities, transportation, and taxes can add up to make your raise all but disappear.

Get a sense of the average wage for a position and the gap to the next level. A move from analyst to manager should reflect the skills and knowledge required to do the job. You don’t want to take on a lot more responsibility without being compensated for it.

Be realistic about the job – if the company is looking for an entry-level manager, they won’t want to pay a senior manager salary. However, it may be worth it to take a lateral or even a reverse move if the job offers other incentives, like a new company, industry, or a location where you want to live.

2. Overlooking Total Compensation

However, salary isn’t everything. Look at the total compensation and how it fits your lifestyle. In the US, a higher employer contribution to healthcare insurance can boost your bottom line. Benefits like a company car, extensive paid time off, birth and adoption support and other lifestyle options could make your off-hours more enjoyable. Retirement contributions are another attractive lure beyond the regular wages.

3. Sharing Too Much

If you give away too much information, you may end up negotiating against yourself. Especially if you’re in talks for a new position, try your best to get the other side to name a number first. If you go first, the reaction will be something like, are you willing to be flexible? Or that’s over our budget. Getting a number out in the open early can be helpful to see how far apart you are. Then, you can decide how flexible you want to be. Once you name a number, you put yourself in a corner.

Some locations have made it illegal or inadvisable for an employer to ask for a salary history. Still, you may feel better about giving a broad range, similar to the company’s job posting. That gives an opportunity to talk about the other things that make a job attractive.

4. Not Knowing Your Value

Instead of working “for” the company, change your mindset to working “with” the company. That means you understand the value you bring to the business.

Asking for more compensation means you will earn your keep by generating revenue or reducing expenses many times the value of your pay. Build the business case for yourself by analysing the value you have delivered so far and what you plan to do in the future.

If you can step into a higher position without much training, it will be easier to meet your salary requirements. Most departments don’t have much time for training or re-skilling, so the company must be willing to pay for the skills it wants.

The goal is to give enough information so the company can see how you will help them solve challenges to justify your salary.

Ideally, you should feel like you got a good deal at the end of the conversation. However, like buying a car, it can be hard to tell whether you got a good deal. You don’t want to end up with that uncertain feeling when negotiating a new salary.