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Avoid This Salary Negotiation Mistake

By: J.T. O’Donnell

While speaking recently on the subject of transitioning your mindset away from seeing yourself as an “employee” and embracing the reality that we are all now “businesses-of-one” who are responsible for owning our success more fully, a participant stood up and asked,What’s the worst salary negotiation mistake I can make?”

Uggh. There are plenty of mistakes that can be made in salary negotiations for your business-of-one. However, I’d have to say they all stem from the initial mistake I see 90% of today’s working population make… Failing to Manage Employer’s Expectations

If you want to know where most people go wrong when negotiating a salary, it’s in their failure to make it clear during the interview process they understand their worth and are looking to create a business-to-business partnership. You don’t want to work “for” the company, you want to work “with” the company – and that means helping them understand up front not only what value you can bring, but that you’ll want to be paid fairly for it.

Step I: Assess the Employer’s Problem

Before you can determine what a fair rate for your services would be, you need to go on the interview(s) and assess the company’s issues. The most savvy businesses-of-one know how to turn a one-directional interview (i.e. employer asks you questions and you cross your fingers you answer them right), to a two-directional conversation. [NOTE: Becoming proficient at this approach to interviewing takes work. Many people attack the interview the wrong way. Especially, more seasoned workers. I wrote about the interview mistake people make in this post on LinkedIn.]

Interview pros know to go into the meeting with a goal of assessing:

1.What problems are they going to solve for the employer?

2.What pains can they alleviate with their particular combination of skills and abilities?

3.And most importantly, what will that be worth to the employer?

By looking at the big picture, business-of-one candidates figure out what they might charge for their services. In fact, if you do an amazing job asking the employer questions about the work and what you’d need to do to make their lives better, it usually impresses the hiring manager. The fact you know to ask these questions implies you have a handle on their problems and how to solve them. This usually leads to them asking for your salary requirements. At which point you move on to step two…

Step II: Offer Salary Range & Explain Why

Contrary to some advice you might hear, I must tell anyone reading this that the fastest way to get knocked out of the running for a job is to refuse to answer the salary question. Please, PLEASE don’t say things like, “Why does my salary history matter?” Or, “Let’s discuss salary when we agree I’m a fit.” The employer is the buyer of your professional services. If they ask price, discuss price. Plain and simple. BUT, you can do it in a way that will generate a healthy dialog and earn their respect.It works like this:

You tell them your salary history (if asked), and then you give them a nice big range regarding your salary expectations. [ For more on how to do this, I wrote in detail about it on LinkedIn.] The key is to force them to ask, “Why such a big range?” In which case you get to say,

Compensation isn’t my only factor of consideration in a new position.

Other things like benefits and the opportunity to grow and work on interesting projects

matter just as much. So, based on what I’m hearing so far, I could see trading off some income

for those types of perks with your company.”

In doing this, you let them know that if/when the offer comes, there will be a discussion around their entire employment package and how matches with what you need to make the partnership seem equitable.

Step III: Bring it Back to the Opportunity to Solve Problems

Once you and the employer have had the salary heart-to-heart, move the conversation back to their pain points. Remember, they are the customer! Return the discussion to the problems they have and how you would be excited to leverage your skills and abilities to solve them. Don’t be afraid to show your enthusiasm about working for them. Given how much they are going to spend on hiring you, they want to know you appreciate the potential opportunity. The more you can help them see you understand the challenges they are struggling with and how you can solve them in a way that will help them justify your salary, the better. This is the time when you get them to realize they can’t succeed without you.

Step IV: Negotiate on the Facts

When you finally get the offer, take time to review it carefully. If you feel your deserve more, build the business case. Why should you get a higher salary? What needs will be met on your end if they can meet your demands? Then, ask to speak to the hiring manager personally and state your case. NOTE: never send it by email. It’s better for them to hear the sincerity in your voice. Here’s an example of what you might say,

Thank you so much for this opportunity. I am very excited to work for the company. That’s why this discussion isn’t easy to bring up, but I wanted to chat with you about it directly. I have certain financial needs for me and my family. I was hoping your offer would come in at $____ so that I could be 100% confident in taking the role and not be concerned about compensation. I wanted to see if you could consider raising the salary so that I can start the job without worries around money. I am confident I will justify this payment level in the work that I do and will be happy to set clear expectations and milestones so you can feel good about the increase as well. Would this be something you could consider?”

It’s important you be clear in both how much you want and why you want it. Employers don’t want an extended back-and-forth. And, if they can’t meet your salary demands, be prepare with one backup request. For example, you could ask for more vacation time to start. Or, you could get in writing that they’d do a salary review in 6 months instead of a year. As long as you can get them to agree to some additional provision that can help you offset the lack of an increase, it will help you justify taking the job.

And that leads to the last step…

Step V: Map Out Plans for Your First Raise

The first day on the job is the first day you start prepping your employer for your plans to develop your skills, increase in value, and eventual justify your request for a raise. While you won’t say that on day one, you should be thinking about it. That’s the first step in setting yourself up for promotion!

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