September 17, 2015

3 Mind Games to Give Candidates an Edge in Salary Negotiations

DollarsIn a perfect world, candidates wouldn’t have to negotiate. An employer’s first salary offer would be its best possible offer. Unfortunately, it rarely works that way. Most employers — 70 percent of them, according to CareerBuilder — will put out a first salary offer that is below the highest potential offer.

Employers do this because they anticipate that candidates will want to negotiate. They leave some negotiating room so they can appear to be responding to the candidate’s demands without breaking their own budgets. Studies show that candidates who choose to negotiate can increase their starting salaries by about $5,000 per annum.

Salary negotiation is an integral part of the hiring process and failure to negotiate can mean leaving a lot of money on the table. Don’t work for less than you are worth. Negotiate.

That being said, salary negotiation is more art than science, and it often turns into a game of wits. Low-ball offers, for example, are mind games, meant to trap you into a lower salary than the company is prepared to offer. That’s why you need your own counter strategies to win the negotiation game — and I outline three such strategies below:

1. Use Precise Numbers, Not Round Numbers

When making a salary proposal, it can be tempting to use a round figure, such as $30,000 or $40,000 a year. But these round numbers are not the most effective ways to influence employers. Research from Columbia Business School shows that employers are much more likely to be moved by precise numbers, like $38,000 or $41,000.

The researchers behind the project concluded that precise numbers are more convincing because they cause the listener to assume that you have conducted some research, that there is weight behind the number you are proposing. The researchers suggests that, in salary negotiations, you replace one of two of the trailing zeros with a number — so $40,000 could become $41,000, and $100,000 could become $104,000.

2. Highlight the Company’s Problems and Prove That You Are the Solution

If you watch reality shows like Dragons’ Den and Shark Tank, you’ll see that the investors often uncover weaknesses in the entrepreneurs’ business offerings. The will then magnify these weaknesses and use them as negotiating tools to claim more equity in return for the increased risk. To make themselves seem more appealing to the entrepreneurs, the investors also outline their own achievements, positioning themselves as the antidotes to the entrepreneurs’ ills.

EmployeeYou can use this strategy in salary negotiations, too. Throughout the hiring process, you need to be looking for weaknesses in the employer’s business that will make your role more challenging. For example, you might find that the company has delayed its product upgrades, meaning that the product will remain less competitive than peers’ products for the next 12 months. This, in turn, may mean that you’ll need to invest more time and energy in creative marketing techniques, networking efforts, and sheer persistence than you would otherwise.

Run with this: demonstrate that you are excited by the heightened challenge, that your past achievements make you the perfect person for the role, and that you deserve a little extra for shouldering this weight and making a real difference for the company.

3. Use the Negotiation to Gain Other, More Valuable Concessions

While locked in a tense salary negotiation, you may find that the employer is more open to making concessions in other areas — e.g., vacation time, benefits, etc.

At the late stage of the hiring process, when the employer has discarded other candidates and dropped all its eggs into one basket — that is, your basket — the employer becomes vulnerable. The company needs you — there are no other candidates standing.

To take advantage of this momentary vulnerability, you might propose something like, “I’ll take a $3,000 cut in my starting salary in exchange for a telecommuting allowance of two and a half days per week.” If you play your cards right, you could end up with some seriously great perks that actually boost the value of your total compensation.

While these tactics can definitely help you gain an edge in the salary negotiating process, it’s important not to push too hard; otherwise, you may end up coming across as an opportunist, and the company could quickly sour on you. Remain very positive — but firm — throughout the process, and you’ll have a better chance of succeeding.

Read more in Salary Negotiation

Kazim Ladimeji is a Chartered Member of the Chartered Institute of Personnel and Development, and has been a practicing HR professional for 14 years. Kazim is the Director of The Career Cafe: a resource for start-ups, small business and job seekers.