As a top-billing headhunter for roles ranging from chief executive to the analyst level, a big part of my job was to negotiate between the candidate and the client what compensation package to settle on. Only upon successful negotiations would I get paid, so I had to excel at this skill to survive. As someone who retired from headhunting at a young age, I’m excited to share my volume of knowledge I gained from a third-party perspective.
At the end of the day, here are the top six biggest mistakes and misconceptions I’ve seen candidates fall prey to during salary negotiations.
1. Relying on one offer
Basic supply and demand dictates that the higher the demand for your skill set (assuming the supply of candidates is limited), the more you’ll be paid. In most skilled/white collar roles, there are more jobs than likable and qualified candidates available, therefore, the question is more important: Why don’t you have more offers brewing? The first mistake is relying on one employer.
Why would an employer pay above what they can get away with if there is no competition? It’s hard to create a bidding war when no one who wants to “buy” you. I advise candidates to use other offers to their advantage and also to be absolutely honest during the interview process. Don’t hide the fact that you may have other offers coming in!
Competition is good. You will raise your desirability in an employers’ eye if their top competitors also want to hire you. Your salary will naturally be higher in this scenario—this is the beauty of leveraging. Use this to your advantage and drop the hint that you’re hot stuff!
If, in your job type, there are more candidates than jobs available, then you’re looking at an even bigger problem. You will not be able to negotiate that much if you’re operating in a role in which you are a commodity and easily replaced (worse yet, eventually automated). If you’re relatively substitutable, you probably cannot negotiate for a higher salary above what is the market norm. For most jobs, there is a maximum ceiling, unless you bring something truly unique or add value.
2. Not doing enough research
If you rely on the negotiation at the end of the process to dictate your future, you’re taking a big gamble. You should have been using market information from day one to set the stage for your negotiation strategy and expectations. Waiting until the end is the ultimate cat-fishing move for both parties involved.
I always prefer to set the stage from the very beginning, or as early as I feel the tide turning in my favor. Once the phone interview is done and the face-to-face is being scheduled, I’m already calculating and thinking ahead what numbers would be reasonable to me.
3. Becoming an unemployed job-seeker
I talk a lot about the—the basic tenant is that the more unhappy you are with your job, the worse bargaining position you’ll be in.
Unless you have some rational reason for why you’re unemployed (winning the lottery, being extremely rich, having no kids/family to support, working within an industry where you don’t have to continually stay employed), employers tend to view unemployment unfavorably. In cases where there is a layoff, and you have a severance, this is understandable.
But too long of an unemployment timeframe impacts your desirability because there will be more questions to answer, such as: Why haven’t you been able to find employment? Are you lazy, unqualified, incompetent, or just simply burnt out? Meanwhile, other candidates who are happily employed will also be competing for the same roles you are. Double whammy.
The market value of someone employed is very easy to calculate—it’s their current salary or adjusted counter-offer amount. As someone who is unemployed, you’re a bit of a guess, and there’s only your past salary to work with. So again, this is where you need to decide: Where are you willing to settle? Essentially, you’ll need to decide your strategy early on: Either roll the dice on salary at the end and wing it, or dictate from the beginning what you want in a transparent manner.
No matter what the scenario is, it helps to have money saved up at all times to make sure you don’t get desperate to take on a job simply for the money. You never know what may happen, and you don’t want to get sucked into a crappy job because you didn’t plan accordingly. There’s a reason why various pundits will harp on the idea of the “emergency fund,” and rightfully so.
4. Focusing too much on the money
The biggest complaint I have with negotiation gimmicks is that people propagate the idea that there are a few words or strategies that will magically fool an employer to pay double or triple the amount of money for you. That rarely happens. If it does, it isn’t always a good thing.
I worked with clients who are terrible people and horrible managers. Guess what? They usually pay above market rates for their talent! The people who get wooed into that scenario forget to look at the opportunity and what they’re getting for their money. Are they really going to learn skills to increase their future employability? Are they working with a manager and within an environment that is conducive to a happy, enjoyable, healthy working environment?
No! The answer is no! They may work there for a year, but will quickly leave and find another place sometimes for the same if not lower salary. Those environments are unnatural and unsustainable! Any employer willing to pay unnaturally high rates definitely is undergoing something they’re not telling you.
If you’re an amazing organization, you don’t and won’t have to bribe people to join you! I’m not saying this is always the case, but it certainly should raise a red flag for you to investigate further. Don’t be fooled by their desperation to hire you at all costs.
None of my clients who were halfway decent employers could be fooled like that. Smart employers know the game a lot better than any gimmicky person out there. And besides, if you’re able to double or triple your salary, that may be a one-time feat only (max twice, anyone else who does it more than that is too rare to replicate). That won’t happen consistently, because market dynamics do not allow for that on an every day basis. Otherwise inflation would be through the roof!
5. Knowing what else the compensation package encapsulates
People place too much emphasis on the base salary as the most important piece to negotiate. They’re forgetting one very important compensation factor: equity. The equity is what matters if you’re looking for a true windfall! Make sure you’re not negotiating the small stuff and missing out on the big stuff.
Warning: Many times, people from established businesses feel that it’s a risk to join a smaller company that is in an earlier stage of growth. They prefer large-cap companies, but then they miss the true windfall when a stock goes from $50 to $600 like one of the clients I worked with. As a mid-sized company, everyone I placed there eventually became millionaires off of the equity package alone. At that point, does $10k on base matter compared to the $100k you can earn on stock options/restricted stock units? Don’t miss the big win due to a small gripe. That may lead to regret further down the line.
This is why you should never attempt to do my next and final point:
6. Behaving belligerently and/or with paranoia
Some people are so concerned about $5k or $10k on base salary, that they’ll miss the job/offer entirely. I had a candidate who made such a stink about $5k that they lost their offer. The client was so turned off by their aggressive, give-me-all-you-got-I-know-you-have-it attitude. Remember, $5k after taxes is a little over $2,500. Why lose a job at $130k for $2,500?
Not only was that candidate extra greedy, they were also extra entitled, and therefore extra rude. They treated their best friend in the hiring process, their headhunter, like garbage. They were rude, aggressive, and mean. Again, totally unnecessary behavior. Even the HR person could hear this person’s negativity and counseled against the hire.
Please be careful how you negotiate and how you treat people in the process! It does no one any favors by behaving like a total tyrant who thinks they’re the only person on earth who can do the job. Whether you like it or not, there is competition, so if companies have other employees to consider, you bet they’ll take their chances.
At the end of the day, employment is a two-way street; it has to be fair on both sides. I have boosted peoples’ salaries by 10 percent to 30 percent on average, but it’s because they earned it. The employers I worked with understood that these are high-value employees so they were happy to pay extra.
Ultimately, the point I am trying to make is that you should be easily able to achieve what you want if you:
- know how the hiring process works;
- are competent in your role and have done a good job in your career;
- know how to work with people who will help obtain the maximum amount of offers for you;
- ideally are looking for a new job when you’re employed;
- and are to boot!
This article originally appeared on Quora.