Top salary negotiation mistakes to avoid

Last updated:
December 14, 2020
March 15, 2022
min read
Sim Samra
salary negotiation mistakes
Table of contents

Failing to land your ideal candidate is more likely to happen in one part of the interview process than at any other point. Salary negotiation.

As a hiring or recruitment manager, you need to be more than ready for negotiation. Far too often, it’s the difference between adding the perfect player to your team—and not.

So, what are those big mistakes?

Failing to offer what the candidate is worth

You’ve spent the time getting to know your candidate. You can see the level of operation they’ve aspired to, their social engagement skills and their experience, so you should now have a real understanding of their worth.

You also know exactly what your salary limits are for the position.

So why do so many managers make a first offer that’s unattractively low to their candidates?

Expect a negotiation—not a bidding war

The days of kicking things off with a low first offer—to haggle out a great deal—should have died with the dinosaurs. Candidates have access to more information than ever, so it’s likely they already have a real idea of your company’s salary ranges. It’s even easier to find out what the industry-standard compensation is for the position.

If you start negotiations too low, you’re insulting the hard work they’ve put into their achievements and their true value. If you want to show them the respect that they deserve, and start your working relationship together on the best possible footing, offer them what they’re worth—and do it with your first offer. Make them feel wanted.

Don’t be afraid to initiate negotiations

Offering a candidate the salary they deserve doesn’t mean you have to go all-in from the outset.

Your candidate will be prepared to push the salary negotiation; it’s standard practice. And even if they don’t, you should at least give them the option. Ask them if that’s what they were hoping for; if not, why not?

You should hold a little back from your top line, just in case you do have to up your initial offer. It’s a good idea on a few levels. First, your candidate will feel good about pushing the number up, which will make them more likely to accept the offer. Also, it will add to their belief in the value you’ve placed in them. And even if you don’t reach your candidate’s dream number, they will appreciate the fact that you tried.

Failing to hear to a candidate’s needs

You’ve got all the information that you need to make an offer. But does that mean your candidate is going to jump at the opportunity to come and work for you? Not at all. Don’t get too excited or too complacent, and start to think that you hold all the cards.

Listen to what your candidate wants and needs. They might ask you outright, or it might take a little work to eek it out of them. But listen. Take your time to understand what they say and provide a sensible, considered, answer, and offer. Don’t lose sight of your goal by falling into some contest or bidding war.

That means building trust

Showing that you’re listening and responding to their needs builds trust. You’re buying respect and paving the way towards a better working relationship. These are great seeds to plant at any point during the interview. It all leads to the candidate believing that the negotiation provides an honest and considered offer.

Understanding the true value of the candidate to your company

Some candidates are worth going the extra mile for, yet, only you and your associates can decide just exactly how far that is. If finding an alternative is going to add additional time and money to the process, is it worth it? And if your star candidate brings skills and experience to the table that nobody else can, then surely, that added value is worth consideration and compensation.

They could be worth a lot more to your business than the additional pay on offer. Carefully consider every opportunity as an individual investment, and the likely return you stand to make from it.

Knowing when to push on and when to walk away

Sometimes, you have to walk away. If the figure your candidate is asking for, no matter how attractive they are to the role, is just too much for your company to consider, it’s time to say your thank-yous and goodbyes.

Know your limits and stick to them. It’s as easy as that. If you believe they’re worth breaking your ceiling figure for, make sure it’s considered, appropriately evaluated, and a group decision.

When to push—and how to push

If you do decide it’s worth an extra push, consider the additional benefits your business has to offer. Would a relocation package, a signing bonus, or an option for company shares swing a candidate’s decision? Would they consider a more flexible working pattern, additional vacation time, or the freedom to work remotely as more important than the bottom line figure?

If you’ve listened to them, and truly heard what they’re saying, you can tailor your offer to a set of unique needs.

…And a quick look at the top 5 mistakes made by candidates

Candidates are likely to make more salary negotiation mistakes during interviews than their hirers. It stands to reason that they’re going to be involved in considerably fewer interviews than their recruiter. A recruiter can learn from experience—and by their mistakes—allowing the fine-tuning of their process. For the candidate, well, it’s not always quite so easy.

However, you can learn from their mistakes. In doing so, you can help them not to bungle a great opportunity and also make sure you stand the strongest chance of getting what you want from them.

So, with the shoe firmly on the other foot, here are a handful of the most common mistakes made by candidates:

1. Settling for the first offer

Without the confidence, or down to nerves, performance anxiety or experience, candidates often fail to negotiate at all. Settling for a low salary that they’re not happy with creates long-term problems for the candidate. Even if the business believes they’ve got a great deal, it could soon come back to haunt them.

2. Revealing their current salary and a figure they’d accept

Revealing bargaining figures gives the candidate less room for negotiation. And what they earn right now isn’t always a real indication of what they’re worth.

3. Being driven by the money they need to live, and not the value they bring to the role

Your candidate may require a particular figure to meet their financial obligations, but that’s on them, not you. Their pay should be in line with their worth, and only that.

4. Failing to research figures

The Internet holds as much salary information as almost any candidate could ever need. Without the correct research, candidates can make poor assumptions and try to negotiate unreasonable figures.

5. Not taking the time to think things through

Timing is so important. Making a big pitch when there are still other candidates vying for a role could mean bidding themselves out of the race. Also, accepting or rejecting a figure too quickly can lead to regret.

Check out our blog on 4 ways to display salary in a job description.

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