49% Of Job Candidates Never Negotiate An Initial Employment Offer. Do You?

A study shows that you might be missing out on over half a million bucks over the course of your career—because you didn't speak up.

Are you negotiation-phobic? Are you so risk-averse that in a job interview you blurt out, "Thanks, I’ll take it!" in response to whatever salary you’re offered? If so, you’re not alone. Even though many employers admit to lowballing initial offers in the expectation of a negotiation, many job candidates, it turns out, just grab the first offer.

Not negotiating, however, can be more costly than you think. In their paper "Who Asks and Who Receives in Salary Negotiation," researchers Michelle Marks and Crystal Harold found that employees who negotiated their salary boosted their annual pay on average of $5,000. According to the researchers, assuming a 5% average annual pay increase over a 40-year career, a 25-year-old who negotiated a starting salary of $55,000 will earn $634,000 more than a non-negotiator who accepted an initial offer of $50,000.

And in a recent study to find out how many people on both sides of the desk do—or don’t—enter into the fray of salary negotiation, CareerBuilder, the largest online job site, found that an astounding 49% of job candidates never even try to negotiate initial job offers.

So why?

While it may seem like second nature to haggle over the cost of a cheap trinket at a flea market, in a job interview, to put a price on your most valuable assets—your labor, expertise, connections, creativity and personal skills—can be anathema to risk-adverse job seekers. According to researchers Marks and Harold these job seekers perceive the negotiation process as "potentially causing damage to the relationship, creating a less stable social dynamic." The ultimate fear is that to even enter into a negotiation will mean the loss of the job offer itself.

But Rosemary Haefner, VP of human resources for CareerBuilder, says of these timid job seekers, "Shame on them." Haefner explains, "Lately we’ve seen more employers who tell us that they would have been willing to negotiate, nearly half of the employers surveyed. They even expected it. But the job candidates just didn't ask." Haefner attributes this economically self-destructive trait to both risk aversion and lack of negotiation skills. But she warns job seekers, "You can’t win if you don’t play," and offers some strategies on how to get over negotiation-phobia.

Prepare yourself

"Think about what you're asking for and why. Create a script of what you want to say. Anticipate what the potential employer’s reaction might be. Anticipate your reaction to theirs. Practice the script with friends or family. The more you do this, the more you’ll gain confidence and be prepared for wherever the conversation will go."

Take the emotion out of it

"There is something very emotional at the heart of negotiation. Sometimes people panic. Sometimes they make it more complicated than it is. The key is to get over the emotion and think of your skills as objective data. Just offer the facts. ‘Here's what I've done. It’s in my resume. We talked about in the interview. And this is why I’m worth this much.’"

Create your story

"Instead of saying in a job interview, ‘That's really all you’re offering me? I’m worth much more,’ you have to be able to articulate why. See the bigger picture. Exactly what is it you're bringing to the table that is so valuable? What are all of the things you've done? What are all of the great things that you're going to directly and indirectly bring to the company? Be able to say, ‘Here are the three or four things that I'm going to be able to do. And this is why I’m asking for more.’ This can also apply to employees up for a promotion or a job move within a company."

Know what else you want

"If the salary is not negotiable there might be something else you can negotiate. You can say, ‘Okay, you can't give me more money but can you give me schedule flexibility? Because that's also worth something to me.’ In our survey we found that 33% of employers were willing to negotiate more flextime and 19%, more vacation time. About 15% of the employers were willing to have the company pay for your mobile device or to negotiate telecommuting at least once a week. There’s room for talking about things other than just a salary bump."

Know when to stop

"When you’re in the market to buy a house, you put it an offer. There might be a counter. Then you might go back with something else. And then you're kind of done. The same rule applies with job offers. There's a limit of how many times people go back and forth. When the person extending the offers shuts them down…then you stop. If there’s no wiggle room and you keep coming back and trying to push it you can sour the deal."

Build in benchmarks for future raises

"If they say, ‘No,’ to what you ask for, your ego might be bruised but at least you know you tried. If you want the job, the conversation should always end with, ‘Yes I understand. I respect your decision. Fine, I'd like to take the offer.’ But to set the stage for the future you can also add, ‘What will I need to do in the first year in order to prove to you that I am worth a raise?’ The practice of negotiation early in your career sets you up for success later.'"

[Man on the line: PhotoStock10 via Shutterstock]

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18 Comments

  • Eric Woodring

    One other piece:

    Professional and respectful negotiation, where you exercise both tact and restraint, is a great way to show your employers you're wiling to play ball. Negotiation, be it with salary, objectives, team structures, or project management, is an essential part of a business. Managers negotiate a myriad of tasks on a regular basis. Showing your company you know how to gently push for what you need while also striking the proper balance is a great way to not only command respect but also line you up for better jobs in the future. Silence and tacit acceptable allow anyone to maintain the status quo but it certainly isn't going to help you conquer the boardroom.

  • Eric Woodring

    I think this is a great article and I wholly agree with the content, but at the end of the day negotiating salary is about knowing what you're worth from an objective business mindset, not from an emotional place. I've been lucky enough at 25 to nearly double my salary in 2 years. I did that by making sure I was contributing to the overall success of my company... not just my individual objectives. Money talks. My company needs me because I have a desired set of skills and I never lose sight of the bigger picture. I make sure that I bring in double my annual salary every month and it's put me on the fast track to bigger and better things. In both cases that I was promoted the job and salary was offered to me, I had raised my hands enough to take on more work and was known for the quality of output. As a result, I've never had to ask for a promotion, only negotiate for the proper raise.

  • Jo

    This article basically documents what I went through a few months ago. I took an internship immediately after college and once that time for full-time conversion came around, I tried all of the above to negotiate the best deal I could... with no luck. Am I just at a dead end job?

  • studenttojob

    Yes, true that employees are timid to negotiate. I agree with the view that employee should know what they are capable of and must articulate it. Also, i did not know the cost is so big. Thank you.

  • Nick Kossovan

    It's obvious that the authors (Camille Sweeny & Josh Gosfield) are clueless as to what is happening in corporate America. The bottom-line is this... employers are in the driver's seat and will be for the foreseeable future. When it comes to "negotiating" the core rests on who needs who more and today the person seeking employment needs the employer much more than the employer needs the person seeking employment, thus the power to negotiate doesn't rest with the job seeker but with the employers.

    The jobs seeker wants a job and would be foolish to try an negotiate in the current economic climate when there are so many lined up behind them will to take the job for what the employer is willing to compensate.

  • David

    Very relevant article today, the further I get in my graduate program the more I see a need for these kinds of skills. Even one of my peers is taking a negotiations class!

  • EH

    This article is right on the mark. I negotiated cell phone and more money initially, and every year or so I negotiate for raises and bonuses for various accomplishments. I have raised my salary 50% in the first 5 years.

  • Steph

    Shame on them? That's not an appropriate way to coach, Ms VP of Human Resources. As an HR professional for 15 years, I'm horrified by that lack of tact.

  • josh

    Steph, the comment was meant in a humorous vein. Of course no one should be literally shamed for not negotiating,

  • Joaquin Padilla Rivero

    5% annual salary increases? During 40 year-jobs? Who is this worker? There can't be more than one blessed person with that kind of pay and stability in that age bracket. The majority of 25-year olds, if we have a job, have our salaries frozen (a loss in terms of real wages) and will be lucky to stay 4 months in the same job. To "negotiate" means that you'll be kindly dismissed and that another of the 2,000 candidates will be chosen.

    This article is written from La-La-Land. I'd advise the author to get real feedback from employers and workers, and see how eagerly wages are raised. This is a pure mathematical pipe dream.

  • josh

    Joaquin - the 5% figure was quoted from the study. Of course salary increases depend on the economic cycle, educational level, what industry you work in and other factors. Income equality has factored in as well—those at the top are finding their incomes increasing at a faster rate than those at the bottom. And since the last downturn, incomes have flattened out. So with all of these variables, you can only estimate at what rate a single employee's salary might increase over a 40-year career. Is 5% unrealistic? Maybe, so. But it will take 40 years to find out.

  • Joaquin Padilla Rivero

    What we know is that from 1975 income growth hasn't even been close to be near that 5 percent, even though there have been groundbreaking technological advances which have created enormous added value and entirely new industries such as widespread electronic miniaturization, the Internet and mobile phones.

    http://visualizingeconomics.co...

    From what we read there, taking as base 100 the income of 1947, the result in 1970 it's approximately 195 and in 2010 it's 280. If we shift the base so that 1970 gets base 100, the value for 2010 is 143,6, In terms of annual growth, that's 0,9 percent. We can't necessarily extrapolate the figures from the last 40 years to the next 40, but it's a much better guess than the industrial revolution that the authors of the "study" are suggesting out of thin air. And all of that isn't even touching the fact that the concept of "one job forever" is gone, and that salaries are shifty, and not necessarily upwards due to the growing unequality that you mention.

    I understand that you have quoted the numbers, but you shouldn't do so acritically.

  • ctdfalconer

    I negotiated. It just made sense. It was a bit nerve-wracking, but I got a better offer out of it.

  • ctdfalconer

    If memory serves, the difference between initial offer and accepted offer was $5k annually, plus "Sr." at the front of the title.