So, you're thinking about joining a new company but there’s one thing holding you back: how will you negotiate your salary? Don't panic! We asked leading experts in the field to help us put together a practical and actionable guide on what to do… or rather what not to do. After reading this article, you will know how to avoid the most common mistakes in salary negotiation!
Mistake 1: Assuming recruiters have unlimited flexibility
Recruitment is a two-way street: candidates and companies must share a mutual interest in one another. This makes sense when you think about it: the prerequisite for any kind of negotiation is a common understanding of the needs and constraints of each party.
This means that, as a candidate, you should be aware of the company and recruiter's situation. Indeed, a job hire generally takes place within a recruitment plan which is defined by management well in advance.
This plan will state how many positions are available, over what period of time (quarter, semester, year), how much experience is expected and the salary scale.
"This is not simply a question of budget. It's also a matter of fairness to the other employees," explains Anne-Laure Kauffmann, HR & Tech recruiter at Mirakl, a unicorn providing marketplace solutions.
In other words, the stage is usually already set before you even start the recruitment process!
But, she adds, "there is always about 10% wiggle room, depending on performance in the interviews and technical tests."
This, of course, depends on the company. For example, at Algolia, a unicorn which designs search engines for companies, all offers were firm! "And we stood our ground. This sometimes played against us, but ultimately it prevents an imbalance based solely on people's negotiating skills," says Sylvain Utard, Algolia's former VP of Engineering and AI General Manager.
This may not sound as exciting as the epic power struggles depicted in Hollywood negotiation scenes… but, unfortunately, real life is rarely as glamorous as the movies.
✍️ Remember: The scope of the negotiation is usually limited in advance. This is mainly to ensure fair pay.
Mistake 2: Thinking that being head-hunted will give you more room for negotiation
Despite what you may have heard, being head-hunted doesn't mean you’ll be at an advantage when applying for the job — see all the reasons mentioned above.
"The minute a person answers our call and is willing to take part in the recruitment process, they are on equal footing with regular candidates, says Anne-Laure Kauffman, the difference lies, not so much in the salary negotiations, but in our ability to convince them to join us."
✍️ Remember: Someone who is headhunted is just another candidate.
Mistake 3: Waiting until the last minute to bring up your salary
An obvious consequence of what we have just seen is that you should not wait until the end of the recruitment process to bring up your salary! If it turns out the company's salary range does not meet your expectations, everyone's time will have been wasted, including yours.
You should bring up salary during your first conversation with the company. That being said, perhaps don't open with it… "You want to show that your primary interest is the position, not the salary," insists Sylvain Utard, now Head of Engineering at Sorare, the popular fantasy football game based on NFT cards. "When I contact people on Linkedin, some people open with 'How much does it pay?' I always find this a bit blunt and not very appealing," agrees Anne-Laure Kauffmann.
Kauffmann, who has nearly ten years of experience in HR, says she always brings up the topic spontaneously during the last question of the first thirty-minute qualification call.
"If the candidate senses that the question isn't going to be raised, they need to find a way to delicately bring it up."
— Anne-Laure Kauffmann (Mirakl)
It's a win-win: the candidate doesn’t end up in a long and tedious recruitment process if the job is not the right fit; and the company doesn't have to deal with the disappointment of realising that they can't afford the candidate they were about to hire.
"Generally, after the first stages with recruiters are complete, expectations on both sides should be aligned. It is better to put an end to the process if it becomes apparent that things aren't going to work out," adds Sylvain Utard, who recruited over 150 engineers during his 8 years at Algolia.
It is also worth noting that if recruiters encounter several candidates in a row who are above their budget, they might take it as a sign that they are out of touch with the market, and might end up reviewing their job listing, or their salary scale!
✍️ Remember: There's nothing wrong with talking about pay during the first conversation with a potential employer. Quite the opposite, it benefits everyone.
Mistake 4: Focusing only on your salary instead of on your compensation package
There's more to life than salary. There's also equity, bonuses, variables, benefits like childcare and meal vouchers etc. (see our article "Understand your compensation package"). "It's a bit like when you are on an elliptical machine at the gym: if you only move one leg, you won't get very far. But if you move your arms and legs, things become more fluid," says Fotini Iconomopoulos, a negotiation coach for senior executives who has written a book on this very topic, Say Less Get More.
What other levers are at your disposal aside from salary? First, think of all the things the company can provide that will ultimately translate into money in your pocket. This could be as basic as a telephone, internet, or travel bill.
Here's another possibility to consider: as a compromise and as a token of goodwill, Algolia sometimes offered automatic bonuses of a few thousand euros after 6 months or 1 year of seniority.
Equity has also become a standard in the tech industry, especially in start-ups and scale-ups.
"There is no point in comparing the number of stocks or the % of capital obtained between different companies. The most important thing is the acquisition price and the growth potential of the company."
— Sylvain Utard (Sorare)
"No topic is out of bounds," explains Anne-Laure Kauffmann. "You simply have to bring up what is important to you as clearly and as early as possible." She gives the example of a person who had nine weeks of paid holiday in his previous company but who only thought to mention this at the end of the hiring process!
For the same reason, Deepak Malhotra, professor of negotiation at Harvard, recommends in this article that all issues be negotiated simultaneously rather than one after the other. According to him, "if you initially only asked for one thing, then, in the eyes of the employer, this means that if they grant it to you, you will accept their offer."
✍️ Remember: Salary is only one aspect of compensation.
Mistake 5: Coming Unprepared
There is a preconceived idea that to be a good negotiator you have to be very instinctive and a great improviser. But, in reality, if you want to give yourself the best possible odds, you’re going to want to come prepared.
Know the market rates and your worth
This will take a bit more than asking one or two acquaintances for advice in passing conversation. "There is a trend of junior candidates asking for exorbitant salaries and considering themselves to be senior with only a year's experience," smiles Anne-Laure Kauffmann. We explain how to assess your market value in more detail here.
Be able to justify your demands
Kauffmann also recommends doing some introspective work to find out what you want… and why you want it! Changing jobs alone does not justify a salary raise. It will be a lot more convincing if you show that you are aware of your market price, and of your own personal obligations (a mortgage to be repaid, children to support, etc.).
"When you base the discussion on facts, you prove your legitimacy, and it is more difficult to disagree with you."
— Fotini Iconomopoulos (coach)
Practice in front of the mirror
Fotini Iconomopoulos, whose father nicknamed her "the negotiator" from childhood, has another very simple yet effective tip: practice saying the words you intend to use.
Don't be shy to practice in front of the mirror! "Memory is like a muscle. If your tongue and your mouth are saying words for the first time, there is a good chance, given how stressful these situations can be, that you won't say exactly what you wanted,” argues Iconomopoulos.
Prepare for challenging questions
Finally, Deepak Malhotra suggests practising your answers to commonly asked, and somewhat challenging, questions. For instance: Do you have any other offers? If we offered you the job tomorrow, would you take it? Are we your number one choice? Here, wrong answers can cost you…
✍️ Remember: Negotiation is a skill that requires preparation and practice.
Mistake 6: Not knowing when to shut up
Let's talk about negotiation techniques. Fotini Iconomopoulos titled her book Say Less, Get More, because she believes that, now more than ever, speech is silver, but silence is golden.
Indeed, on the one hand, in stressful, high-stake situations, people are often tempted to fill the void with superfluous words such as "I think", "maybe", etc.
"On the other hand, you might be under the impression that wrapping your main request in additional statements makes it more palatable. But this is not true: it is better to be brief and firm, to breathe, and then be quiet! Don't worry about silence. We often underestimate how much more credible we appear when we do this," advises the coach.
✍️ Remember: It's better to say nothing at all, than to regret saying too much.
Mistake 7: Revealing your current salary
Did you know that in New York and California (among other American states) it is illegal to ask a candidate their current salary? This was put in place to fight salary discrimination and in particular the gender pay gap.
It is not the same in Europe. But this doesn't mean you have to reveal your salary during the recruitment process. It is better to focus on your desired salary, in other words, on your demands. Why? Because of the anchoring effect, a kind of cognitive bias that influences the final decision by giving excessive weight to the first information received.
According to Fotini Iconomopoulos, this is also the reason why you should be the first one to bring up pay. "Otherwise, you leave it up to the company to set the anchor. And the thing about an anchor is that you can't move much further once it has been dropped. Of course, there are pre-existing salary grids, but this is one way of reaching for the top of the range."
Of course, this technique can only work if you have done your market research and are able to put forward credible figures!
If you set low expectations, the company might still make you a higher offer to ensure equal pay. "It is not in our interest for someone to realise months later that they are being underpaid compared to their colleagues," assures Anne-Laure Kauffmann.
✍️ Remember: It doesn't matter what your current salary is. What matters in a negotiation is what you want, and what you are worth.
Mistake 8: Focusing solely on negotiating your compensation
There's more to life than compensation. Of course, we wouldn't want to discourage you from getting the best possible offer (otherwise, we wouldn't have written this article). But you should also consider other aspects of the job that are of genuine, albeit non-tangible, value.
"What matters most is your role in the company and your prospects in terms of learning and development."
— Christian Jennewein (ex BlaBlaCar and Deezer)
In other words, you should weigh up the short term (compensation) against the medium or long term (your career choices).
"What you do on a daily basis, your level of responsibility, the challenges you will have to face, the technology you will learn, the international team, the intellectual stimulation you get from management, the quality of your working conditions... All of these elements can increase your value!" adds Christian Jennewein, who is now the founder of Ciklet.
"Especially since, I personally attach great importance to a person's history and the way in which they have built their career ", Sylvain Utard emphasises.
✍️ Remember: A lower-paid job sometimes pays off in the long run.
In a nutshell: 8 points to remember
- The scope of the negotiation is usually limited in advance. This is mainly to ensure fair pay between employees.
- Someone who is headhunted is just another candidate.
- There's nothing wrong with talking about pay during your first conversation with a potential employer. Quite the opposite, it benefits everyone.
- Salary is only one aspect of compensation.
- Negotiation is a skill that requires preparation and practice.
- It's better to say nothing at all, than to regret saying too much.
- It doesn't matter what your current salary is. What matters in a negotiation is what you want, and what you are worth.
- A lower-paid job sometimes pays off in the long run.
- Our study on salaries
- 15 rules for negotiating a job offer (Harvard Business Review)
- How to Negotiate Salary for a New Job: The Dos and Don’ts (Wall Street Journal)
- Say Less, Get More by Fotini Iconomopoulos
- Fair Pay by David Buckmaster, former Global Compensation Director at Nike