Here’s Why Your Last Salary Negotiation Failed
Negotiating for a higher salary — whether for a new job or your current job — is hard. And it can be even more intimidating if your last attempt was unsuccessful. Understanding how to negotiate and learning from your last negotiation experience is key to getting what you want next time. Here are a few reasons why it might not have gone well and a few ways to improve your next salary negotiation.
You went in without knowing what you wanted
It is sometimes hard to come up with salary benchmarks for the exact role that you are negotiating for. However, it’s important to go in with an idea of what you want to get out of the negotiation — and, perhaps more importantly, some backup for your argument. It’s easy to simply ask for more money, but success often requires you to prepare a solid case for why you deserve what you’re asking for.
To begin with, do your research to find salary benchmarks for the role, sector, and geography you’re working in (you can start here for tech jobs). From there, take into account any additional training or qualifications you have that would create a case for earning more. Add qualitative insights by speaking with friends or professional contacts at similar companies. Think of your desired salary as a triangulation of a number of different factors, including what you’ve been offered, your dream salary, the market for that type of job, and special skills you can bring to the table that merit higher compensation.
You revealed your cards too soon
Having a solid idea of what you want out of a negotiation doesn’t mean walking into the room and laying that number on the table. In fact, negotiation best practices recommend avoiding doing so, as revealing these details can give your counterparty the upper hand. If, for example, you tell the hiring manager that the minimum you’d be able to accept is X, they know that there’s no reason to offer anything more than that—even if they previously would have been willing to do so.
Instead, use tactics to help you hone in on your counterparty’s maximum willingness to pay. In technical terms, this is the “reserve value”, or the minimum/maximum someone would be willing to accept/pay in a negotiation. While you’ll almost never want to reveal your reserve value (the minimum you would accept), you may be able to tease out some details as to the company’s maximum value over the course of the conversation. For example, consider asking the hiring manager for their opinion on the offer versus market rates for the role, more details about the company’s compensation philosophy, or the amount of flexibility they generally have when it comes to new offers.
You didn’t propose alternative options
Even if the company has no room to budge on salary, don’t forget that there are a number of other factors that might compensate for less-than-ideal wages. In a startup, there is of course equity to take into account, which—depending on your budget and confidence in the company’s success—might be a valuable trade-off to make. Many public companies also offer stock compensation, so keep that in mind as a potential piece of the puzzle.
In addition, go in with a few ideas of other benefits that might sweeten the deal in the absence of your desired salary. You might propose working from home a few days a week, a transportation costs stipend, or the introduction of a performance-based bonus. Still further, consider whether there are trade-offs you’d be willing to make in exchange for a more compelling work experience—for example, the opportunity to manage a direct report or team which other companies wouldn’t be able to provide you.
Prepare, practice, and propose
To sum it all up, go into your next negotiation having prepared your case and practiced how you’ll present it with discretion—and be ready to propose alternatives should things not be going your way. In the end, the company should want you to be satisfied with the outcome, so take the time to equip yourself for the best result, as both you and the company will be happier in the end.