Why You Should Never Accept a Low-Ball Salary Offer

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Music Why You Should Never Accept a Low-Ball Salary Offer May 11, 2016 Suzanne Lucas

No one starts to look for a new job simply because there's a full moon or Netflix removed your favorite show. There's generally a stronger reason, like you can't stand your boss, there are no promotional opportunities at your new job, or you really, really, really deserve a raise. All these things can mean that you are anxious to find something new, which can cloud your judgment. Of course, if you're unemployed that's another story, and I'll deal with that below. When you're anxious, you sometimes make bad choices and accept a low-ball salary offer. Here's why this is problematic. We'll Give $X as a Starting Salary and Re-Evaluate After Six Months Hiring managers say this all the time, not only with salary but with titles. "We'll hire you as an analyst, but we are preparing you for the management position in six months!" The problem with this is, that while it might be true, it gives all the cards to the company. You're in your best bargaining position before they hire you. When you've worked there six months, the company knows you're highly unlikely to leave. Job hopping after so short a period looks bad, and job hunting is hard anyway, so you're stuck, and they know it. Often that six months comes and goes without so much as an evaluation, let alone a pay raise. And that title? Well... Always, always ask yourself if you'd be okay with staying at the same salary and same title for several years before you accept an offer. If not, then that isn't a job for you. Yes, the raise and promotion might come through, but you should consider that a bonus and not an expectation of the job. Guess What? Your Raises Are Based on Your Current Salary You may be okay with a certain salary today because you know you are amazing and will get a great raise based on how awesome you are. Fine. True. (Anyone who reads Business.com is, by definition, awesome, of course.) But did you know that your raise will be based on a percentage of your current salary? Yep. So, let's say that Jane and John both accept new jobs with Company Z. Jane accepts a $50,000 offer, and John negotiates up to $55,000. (I've done the genders on purpose, and I'll explain why later). Both Jane and John are fabulous workers and their respective bosses give them five percent increases every year. Here's how it looks: • Year 1: Jane $50,000, John $55,000 • Year 2: Jane $52,500, John $57,750 • Year 3: Jane $55,125, John $60,637 After three years, Jane had just caught up to where John was when he started, and John's salary grows faster than Jane's. This is even more pronounced if one of them gets a big promotion. These are often based on percentages as well. Starting out low means you never catch up. Bitter? You Betcha Sometimes you think you've negotiated a great salary and then come to find out that you didn't. Sometimes you think you can handle working for a lower salary because the new job is so awesome. But, that wears off, and you can become bitter. The problem with bitterness is that it infects every aspect of your job. When you get your paycheck every two weeks, and it's smaller than you think you deserve, you start taking it out on your boss and your coworkers, and you start to hate the job, even if you like the work. When you're bitter, it makes it very difficult to keep a positive attitude at work. How to Avoid This Trap Always negotiate your salary. Above I had Jane and John at separate salaries. In real life, it's highly possible that both John and Jane were both offered $50,000, and Jane said, "Great!" and John said, "I was looking at $60,000 and an extra week of vacation. Is that possible?" The result is John gets $55k, and Jane thinks she's done great at $50k until she finds out John makes more than she does. Why does this happen? Well, men see salary negotiation as a game and a challenge, and women see it as akin to going to the dentist. Even if you don't like it, you need to ask for more. Most companies make an offer with the idea of it being a starting point, not an endpoint. And if they do make it as an end point, they won't be offended. I hate salary negotiation myself, so I always made my highest and best offer the first time around, but it never bothered me when people asked for more. I'd simply explain that the offer was final. Any manager that gets upset with an attempt to negotiate is a bad manager that you don't want to work for. What if You're Unemployed? One of the reasons that people are willing to hire someone without a job is that they are willing to take less money. You can absolutely still negotiate, and they should offer you a reasonable offer, but your negotiating power is lower. You need a job, and they know you need a job. If you're still employed, they know you won't accept anything unless it's better than what you have now, either in salary or other perks. If you're unemployed and receive a low-ball offer, you'll need to have stronger salary data. It's possible to get a good offer while being unemployed, but it's also a good idea to go ahead and accept an imperfect offer rather than being unemployed. Don't hold out for perfection. You need money. However, if you're a hiring manager, don't low-ball your job candidate just because he or she is unemployed. All those things above? Likely to increase the chance of the employee jumping ship as soon as possible. Why does this matter to you? Because it's more expensive to hire someone new than it is to keep your current employee at a good salary. Offer a fair salary, just like you would to an employed candidate.