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Salary Negotiations Aren't Happening as Much as You'd Think

Raising the compensation conversation early benefits both candidates, recruiters

A woman talking to a man in an office.

​A new survey shows that a majority of job finalists are not leveraging the bargaining power they have in this candidates' market.

According to a poll conducted in early 2018 by global staffing firm Robert Half, 39 percent of workers tried to negotiate a higher salary during their last job offer. More than 2,700 professional workers were surveyed.

Forty-six percent of men negotiated salary compared to 34 percent of women. Workers ages 18-34 (45 percent) were more likely to negotiate salary than those ages 35-54 (40 percent) and 55 or older (30 percent). Of the 27 major U.S. cities surveyed, candidates in New York City were most likely to have done so (55 percent). 

"I was surprised at the pretty low number of people negotiating salaries," said Josh Howarth, district president at Robert Half, based in Washington, D.C. "There's such a shortage of skilled talent in today's market, job seekers are in the driver's seat when it comes to compensation and benefits."

He added that job seekers typically don't take the time to research and identify a competitive salary for their position in their local market. "A lot of folks don't know what they don't know. [And] a lot of people don't have much experience with negotiating and aren't comfortable with it so they shy away from it."

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When asked how comfortable they were talking with their employer about money, survey respondents said they would be more comfortable negotiating a higher salary with a new employer (54 percent) than asking for a raise in their current job (49 percent).

But asking for more money does pay off, according to a 2017 study by recruiting software provider Jobvite, which found that 84 percent of those who negotiated ended up receiving higher salaries. One-fifth received 11 percent to 20 percent more.

Tracy Saunders, a veteran tech recruiter and founder of the Women's Job Search Network, a consultancy for women in the job hunt, believes that this is the perfect time for women to be having these conversations. "I want to encourage women to be courageous and stand up for themselves when it comes to salary negotiation, especially now with the movement for pay parity and focus on diversity recruiting," she said.

In her experience, Saunders said she finds that men are more aggressive in negotiating, where women are more hesitant. "Women approach their job search differently," she said. "Rarely will I have a woman come out of the gate talking about compensation. When I'm sourcing passive candidates, men will want to know immediately if the opportunity will work for them financially. Men tend to come at it like 'This is what I earn, this is what I deserve.' Women wait until further in the conversation."

Negotiating Salaries with Candidates

Experts recommend bringing up the discussion early in the interview process "You do everyone a disservice if you as a recruiter don't talk about salary early on," Saunders said. "You need to know and don't want to waste anyone's time."

Paul McDonald, senior executive director at Robert Half, noted that recent legislation in many cities and states prohibits employers from asking candidates about their salary history, pushing employers and job seekers to shift their approach to determining compensation.

The current market demand for the role's required skills should be the main factor when determining starting salary, he said. "That's why it's more important than ever for both parties to research market conditions thoroughly to pave the way for realistic, productive discussions."

The movement for salary transparency has provided job seekers with more tools than ever to inform themselves about compensation for the roles they are seeking. Job ads are now dinged with lower visibility on Google searches if they don't include a salary range; resources like Glassdoor include salary estimates for jobs; and LinkedIn just announced a new tool to help job seekers explore salaries for open roles.

LinkedIn's Salary Insights will add estimated or expected salary ranges to opportunities being advertised on the site, getting the numbers either through salary ranges provided by employers or estimated ranges from data submitted by users.

Recruiters also need to prepare for this crucial discussion by knowing what the market salaries are in the local geography for the positions being filled, Howarth said. He recommended using annual salary surveys and professional recruiting firms to ensure that the salaries being offered are in line with the local salary market rates for particular jobs. Recruiters should come to the discussion knowing the salary range for the position, including the absolute top end reserved for ideal candidates.

Howarth advised employers to be flexible when devising a compensation offer for candidates. "To the extent that you don't have flexibility with base salary, think of other ways you might be able to compensate that person outside of salary," he said. Examples could include flexible work schedules, paid time off, bonuses, student loan assistance, 401(k) matching contributions, or a commuter subsidy.

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