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5 salary negotiation mistakes that cost you money

U.S. News & World Report logo U.S. News & World Report 09-01-2015 Alison Green

Salary negotiations are one of the most nerve-wracking parts of job-hunting. Because of that, people often make mistakes that end up costing them big money down the road.

Here are five salary negotiation mistakes to avoid in order to maximize how much money ends up in your paycheck.

1. Not asking for more. Not negotiating at all is probably the biggest salary negotiation mistake people make, often because they feel awkward asking for more money or they're worried that the employer will be outraged and pull the offer. But as long as you make it clear that you're really interested in the job and handle the negotiation in a pleasant and non-adversarial way, no reasonable employer will pull an offer simply because you asked for more money.

Of course, there are also times when it makes sense not to negotiate, such as when the employer has made clear that they're offering the top of their range. Another example may be when they offer you the high end of the range you stated earlier, in which case you might look like you're not operating in good faith.

Negotiating Negotiating

2. Basing your salary request on your best guess of what's reasonable, rather than doing thorough research. A surprising number of people decide what salary to ask for based on what they'd like, what they need or what they guess the role pays. If you do that, you can end up severely undervaluing your work. Instead, it's crucial to research the market rate for this specific type of job in your particular geographic area. You can do this by bouncing figures off of other people in your field, checking with professional organizations in your industry and talking to recruiters. You can also check online salary sites. Be aware that they're not always reliable since the job titles they list can represent widely different scopes of responsibility. 

3. Letting the employer base a salary offer on what you've earned in the past

Anxious woman during business interview. © GlobalStock/Getty Images Anxious woman during business interview.

Your salary history is no one's business but yours, and employers should be able to figure out what your work is worth to them without knowing how other employers priced it. If you let an employer base your salary on your last job's wages, you'll miss out on the large jumps often only possible when changing jobs.

If a prospective employer asks what you've been earning, try sidestepping the question by answering with what your salary expectations are now. If they press, consider saying that your past employers want that information confidential – it's often true! – but that you're seeking $X. 

4. Agreeing to put off a raise without a firm agreement in writing

Negotiating Negotiating I hear from a lot of readers who say things like, "My employer said we could discuss a raise in six months, but now it's been eight months and it's never come back up." If you agree to delay a discussion about a raise, make sure that you have a written agreement and a specific timeline for that discussion to happen. It doesn't need to be formal. You can do it with a simple email that says, "I just want to confirm that we've agreed to revisit my salary in June 2016 once we have more results from the X project."

If your employer has told you that you definitely will get a raise in six months, as opposed to just discussing it, document that with an email saying something like, "I just want to confirm that we agreed to raise my salary to $X in June 2016." And of course, once that time rolls around, raise the topic yourself. Don't rely on your employer to raise it, or you may lose money while you wait.

And if you're thinking of doing this when accepting a new job, be especially cautious. Candidates sometimes agree to a lower starting salary and an informal agreement of revisiting it in six or 12 months, figuring that once they prove themselves, it will be easier to get a raise later. Sometimes that works out. But it's a gamble, and your negotiating power is at its strongest before you've accepted a job rather than once you're already working there. In general, it's smartest to do your negotiations upfront, before you accept the offer. 

5. Asking for a salary range if you wouldn't actually be happy with the lowest end of it

  Business executive discussing with her client: Be cautious of accepting an initial lower starting salary and an informal agreement of revisiting it a few months later. © (Getty Images) Be cautious of accepting an initial lower starting salary and an informal agreement of revisiting it a few months later.

Too often, people give a fairly wide salary range – like $50,000 to $65,000 – and then are disappointed when the employer sticks to the lowest end of it. But when you give a range, you're saying that you'd be happy with anything in the range – and that includes the lowest part of it. So, you want to pick your range carefully or be prepared to argue about why you deserve the highest end of it, such as learning that the job has more responsibilities or longer hours than you'd originally realized.

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