It is inspiring to hear when someone negotiated a $10, $20, or $30K+ increase in their compensation. It seems easy. Ask, and money will rain down on you. 

Well, the reality might end up being different.

What if your salary negotiation didn’t go anywhere? Or worse, what if you ended up having the offer rescinded?

It can happen. 

So let’s cover why this might happen.

But first, let’s discuss why companies may increase their initial offer.

What motivates companies to negotiate?

Most organizations have decided upon a salary range they would be willing to offer an individual to take a position. This range is based upon several factors, such as salary surveys, the budget allocated, or what the organization previously paid the last person in the role. Organizations will come up with a salary range, with experience and qualifications generally determining whether they will pay the person on the lower or higher end of the salary range.

Because the organization is working off a range and not a specific salary, there usually is some wiggle room to what they are willing to pay. Because there is wiggle room, and organizations want to fill positions as quickly as possible with the right person, they are motivated to “close the deal” by negotiating with potential hires who ask for more money.

The organization makes a cost/benefit analysis. Is it worth it to pay a bit more to get a “yes” from the candidate who can solve the current problems the organization is facing? Most often, the answer is yes.

But not always.

So why might salary negotiations fail?

There are several reasons why you may not be successful with your salary negotiation.

You Did Not Show Confidence in Your Ask

One of the main reasons that organizations will negotiate with candidates is fear that the individual will walk away from the opportunity. If that is the case, the business will have wasted time interviewing this candidate. So to avoid hiring a less than ideal candidate or having to start the process over again, organizations will be willing to negotiate. But if you are negotiating without confidence, you are telling the HR team and hiring manager that you have no intention of walking away from the offer. Therefore, the risk to the employer is low, so they can be confident in saying no, which will save them money and still get the person as an employee.

You Gave Up at the First No

Have you heard the saying, “If at first you don’t succeed, try, try again?” It is to help us understand that we should not give up at the first roadblock. The same can be said about salary negotiations. Some organizations will routinely say “no” at the first ask. Some will say “no” because they absolutely cannot do what you propose. So if you hear that “no,” don’t think that means the end of the negotiations. You may need to be a bit more creative with your ask.

Consider what else you want them to do. If the employer says no to your requested starting salary, can they increase your bonus opportunity or restricted stock units? Or give you flexibility when you need to come to the office? Or pay for additional training? The point of negotiation is to get the best offer that meets your needs. There are a lot of items that can be part of an employment package. If one thing is impossible, see what else might be helpful to you.

You Focused on What You Needed To Live on and Not Your Value to the Organization

You are offering your labor services for compensation. It is a business transaction. The value of those services is based upon what you can do for the organization and what that is worth. Both sides also take into account the overall market for that service. 

While what you need to live on may be very important to you, it has no bearing on the value you bring to the employer. That is why it is a mistake in salary negotiations to verbalize that you “need” a certain amount of money due to lifestyle choices or your personal situation. Whether you have to pay college tuition, support a family member, or want to put money aside for a 10 day cruise vacation, that has no relevance to the employer. You weaken your bargaining position when you talk about factors that have no relevance to your value to an employer. More often than not, you will be told “no” out of hand.

You Lied

No one likes a liar. And if you are found out, you have damaged your relationship, often irreparably. I have seen job seekers negotiate by saying they have another offer, but when asked to show in writing the offer details, they cannot produce anything because there was no other offer. Because trust has been broken, the organization either refuses to negotiate any further or can even pull the offer.

Always negotiate with integrity. You want to start your working relationship positively and not with doubt already sewn about you.

Rescinding of an Offer

On rare occasions (and I mean really rare), you may start negotiations only to have your offer rescinded. I can count on one hand the number of times I have heard this happen to others, but if it does happen, this is a salary negotiation failure. But keep this in mind. Negotiating starting compensation is now fairly routine. If a company is so offended by you doing this that they would pull an offer, know that there are some serious issues with the way employees are viewed at this organization. Employees may have little say in how they can do their job and how they are treated. The organization's actions may have saved you from heartache and disappointment.

The Offer Wasn’t In Writing, and You Are Being Paid Something Different

Have you heard the saying, “Get it in writing?” There is a reason that you want to ensure that your offer is in writing. That is because you do not have proof of what was told to you in discussions. I’ve seen candidates misunderstand what was said, expecting one thing when the employer offered something else. I have also seen unscrupulous employers change the terms of employment after a person was hired because there was no formal written offer. Therefore, ALWAYS get your offer in writing. Always ask for what was agreed upon to be put in a formal offer letter. If the employer says they can’t, then at least get an email with all agreed upon terms. You want proof, so you have a case if your negotiations aren’t honored.

You Didn’t Think Total Comp and Instead Only Salary

This is a huge mistake that many job seekers make. They are focused solely on their salary or hourly rate and forget about all the other aspects of compensation. Did you know you can negotiate on commission rates, bonuses, and stock options? Also, other benefits such as relocation assistance, learning and development opportunities, conference attendance, or covering membership fees for professional organizations can add money to your bottom line. These are all negotiable. But if you only concentrate on getting the highest amount you can on your base wages, you may miss the opportunity to truly maximize your compensation.

Conclusion

Look out for these seven pitfalls to successfully salary negotiations. They can trip you up if you are unaware. Having a strategy going into the negotiations and a positive attitude can help you avoid them and come out of the salary negotiations happy about what you achieved.

You might find my Ask The Career Coach blog about how to handle salary expectation questions helpful.

Shelley Piedmont is a Career Coach. She wants to help job seekers put their best foot forward by providing the tools for a successful job search. I help job seekers prepare for interviews. You can engage me to help you prep for any type of interview. Schedule a 15-minute no-obligation consultation.