8/1/2015–I won’t negotiate salary for any job offer in the near future.
The potential reward is not worth the risk. If I only have one offer, I will not want to start that job with less goodwill because I’ll need that goodwill as I’m evaluated early on. The truth that negotiating can reduce a candidate’s goodwill is a lesson I learned from experience as a candidate who tried it, as a hiring manager who witnessed it, from interviewing professionals, and from Manager Tools, like so many other nuggets of wisdom. I’ll want to start with any little goodwill I can–especially in today’s world of supposed one- or two-year stints.
Even without the concern of losing goodwill, the support for negotiating is poor. Some claim that negotiating is expected by companies. True; with seven billion people on Earth, there are likely plenty of hiring managers who do that as there are all sorts of preferences which are equally ineffective in most situations. What a gambit, asking for more money thinking the company expects it. This must also be the camp which claims if you don’t negotiate, they’ll see you as “weak”. Before examining other scenarios, arguments, etc. basic principles are good to recognize.
First, “negotiating” in this context may apply to any part of the offer package, but at least is understood to mean “salary negotiation”. That’s the category I’m most against and is the one easiest to discuss. Second, it’s assumed you’ll be a great performer on the job. If not, you have no business negotiating. Fundamentally, negotiating for more suggests you are worth more than offered originally (later I’ll explain why this is only possible if you’re not a great communicator). Third, true “negotiating” is not just “asking for more money”, a rare but important distinction that Manager Tools points out; which are you really doing? Imagine a negotiation of anything else and consider what would happen if both sides explained all the value they had to offer and what they needed (that’s interviewing!) but when one side makes an offer–which in employment is externally benchmarked–the other side says, “ok, I’ll do all that but I want more money”. The effective negotiator never simply asks for more under the guise of “negotiating”. Further, typical negotiation is made effective if the parties are acquainted or have a relationship previously. A job offer is prior to any relationship, except for cases of internal hiring or getting a job from a friend. I can’t speak on internal hiring, though I could see a case where the offer isn’t enough to pull someone away, thus they could simply ask for more with valid, honest reasoning. But in the majority of cases, this is the beginning of a relationship.
I need to start asking how it would sound to effectively negotiate for more money. I can’t imagine a way which doesn’t make the hiring manager wonder what value the candidate didn’t mention before… That’s the reason why any candidate asking for more money must not be a great communicator–if they meant to convey how good they are in the interview process, but the company offered them less than the candidate thinks they’re worth (or actually is worth) then it’s the candidate’s own fault–it’s then his or her responsibility to convey more value to the company in exchange for the extra salary they’re requesting. Candidates are either top talent or they’re not. If I am top talent, I’m justified in getting paid like it. But without a relationship, the company must evaluate my ability based mainly on what I communicate to them–even what references they call relies on my communicating a good list of references. Again, when the offer comes and it’s less than I’m actually worth, I can either assume they’re playing a game expecting me to negotiate, and play along, or I could recognize that, as good as I am, I have some communication and persuasion skills to work on. I should accept their offer or another offer (since anyone who can rightfully claim to be top talent should have multiple offers)…
Assuming, conversely, I’m not top talent (in other words I’m not certain I’ll excel right from the start) I don’t want to negotiate, get more money, lose some goodwill and then find myself overpaid having asked for more. I may get coached out of the company first, especially in reducing budget situations. If I’m not top talent, I should put my effort toward becoming top talent–btw, a good way to learn if you’re worth less than you thought is by getting an offer of employment, even if it’s less than expected. In actuality, the market determines your value and the companies from whom you receive offers are your market.
There’s an idea that if you start off higher, your promotions will always be at a higher level due to the initial salary you negotiated. First of all, if the company grows 2%, don’t expect a 5% raise. Likewise, if the company is stagnant, why would a 1% raise be anything but a blessing? Second, the company you work for either manages talent or not (effectively). If it does, it will invest disproportionately in top talent, so putting yourself in that group is the way to go, i.e. they may get a raise when others don’t. It’s in this way the logic behind “interval promotions” is flawed (“interval” meaning a higher starting salary makes promotions in the future higher). The key point is: top talent who don’t negotiate end up making more than non-top talent who negotiate successfully coming in. If you’re not top talent, negotiating won’t save you, and incentivizes your company to fire you. If you are top talent, negotiating starting salary isn’t what will get you paid later on.
There’s another basic flaw in negotiating salary–how much do you expect to get? $5,000? Maybe $10,000 more if the company was holding out? So, even a successful negotiation is able only to get you a few hundred per month more, at best. Is that worth the risk of getting a cold “no”, a rescinded offer, a stigma, or loss of goodwill? Further, what about future job offers aimed at pulling you out of the company? Depending on level, you could effectively price yourself out of the market if you make too much for your level.
Ultimately, the purpose of negotiating salary is to get more money. I’ve found that the way to get more money is by achieving results, and that in a company I want to work for, performance determines pay after the first performance evaluation. Not only is performance the determining factor (as opposed to negotiation) but relying on performance rather than negotiation is risk-free return. Further, to say, “why not negotiate and perform” is to say, “why not risk goodwill for a few hundred dollars monthly, even though it won’t matter in a year when my high performance will get me the appropriate salary regardless of where I started?” For me, the reason not to do that is obvious.
QOTW–“You’ve got a good name here, already”. Barb
?FNW–Who got offers? Dale, Jess, Danny, Stephen, Jeff, Phylicia
11/29/2017 review–If I could teach a top 10 lessons to graduating college students, this would be on the list. There are benefits not listed here of avoiding the temptation to ask for more money. One is that you become even more focused on what really matters in your first role–relationships and results. While I’m only referring to asking for more salary, I still think non-salary compensation is also off-the-table for negotiation. Rather, the offer as a package is either your best option or it’s less than your best alternative (“batna” if you want to use negotiation terms). If it’s your best option, don’t try to ask for more knowing you’ll say yes if you’re denied. If it’s not your best, it’s professional to say so and point out where it’s insufficient. Don’t mention other offers, just know your threshold to hit and tell them if they’ve reached it. That gives them the opportunity to counter. If they do come back with a significant increase in a standard metric like salary, vacation time, or equity, it would be a red-flag for me because they should’ve offered you what they value you at in the first place. But it’s unprofessional to ask for more of anything when you’re already receiving enough to accept the job.
Don’t negotiate compensation when joining a company for the first time. If you absolutely won’t accept an offer, tell them specifically where it is insufficient. Be one of the few candidates who are overly-focused on contributing value instead of getting what they think they deserve.