When we used to work in recruiting, we always used to cringe when we extended a job offer and the candidate excitedly accepted on the spot.
“Don’t you have any questions?” I would inquire. “Are you sure there isn’t something else you want to find out?” I would prod.
Ho hum, the answer was typically no. If they only knew they were leaving money on the table! Hiring managers often told me what amount I would be able to go up to and if there was an issue, there was typically sign-on bonus money available, too.
That’s why this piece from SavingsAccount.com really resonated.
By not even attempting to negotiate, you’re putting yourself at a financial disadvantage. The piece recognizes two fictitious employees — Jane and Jack. Let’s say they both started their careers when they were 22 and earning $50,000 each year. If they stay with the same employer for five years before moving on, Jane has negotiated a higher salary at 15 percent whereas Jack has been complacent and accepted a 10 percent increase. By the time they each turn 65, Jane’s earnings will have out earned his by $160,318!
Essentially the difference between a two and three percent annual increase at the same employer can truly add up over the duration of one’s career. And moving around from employer to employer can really build bank.
David Larson, founder of NegotiatingSalary.com, mentioned in the piece that negotiating an extra one percent each year can result in retiring seven years earlier than originally planned. “Negotiate an extra two percent and retire 11 years earlier. Twenty minutes of work per year can net you an extra 11 years of retirement.”
The main reason why people don’t negotiate is out of fear. They’re concerned a job offer will be rescinded or they’ll offend their future boss.
We’re here to tell you that will probably not happen. We’ve never seen a job offer get rescinded due to asking for more money. If you’re tactful about it, in most cases the employer will respect you for negotiating.
He added, “Most people get nothing. Some people get more. The ones who get more are the ones who know how to convince their boss to give them more.”