The Number 1 Mistake Costing Professionals $1 million (and How to Fix it)

 

I’m going to cut straight to the chase. The number 1 mistake young professionals are making in their careers is not negotiating!

I know, I know, I know. It can be scary. Especially when you’ve never done it before. You probably feel more comfortable analyzing a Leo Tolstoy masterpiece than asking for more money. I did too. 

62% of recent graduates didn’t negotiate their first offer. -Nerdwallet

I came up with every excuse. I didn’t want to come across as “pushy” and “entitled”. I didn’t want to lose my offer by asking for more. I should be singing hallelujah that I have a job in the first place. But here’s the truth. I just didn’t know HOW to negotiate. 

And from the fact that over half of recent college grads didn’t negotiate their first offer, seems like most other people my age don’t know how to either.

Why You Should Negotiate

Facts for the Ladies

As a woman myself, these facts kill me. But it also lets me know that there’s work to be done. And with the right preparation, these numbers can change.

Convinced yet? I really hope you are.

There’s some great negotiation guides out there but: 

  1. I haven’t seen too many that are specifically for people coming out of college/early professionals who generally don’t have as much experience or leverage power.
  2. I haven’t seen one comprehensive guide that breaks it down, each step of the way, and emphasizes how important the pre-negotiation research is, includes scripts for the anxiety-inducing scenarios, and has a sense of humor since I hate dry material.

That’s why I’ve created a NO BS, step-by-step guide to help young eyed, bushy tailed folks like me who have NO CLUE how to do this. 

It’ll be split into 8 sections. Feel free to go to whichever section you’re more interested in, but it’s meant to be read from top to bottom. Each section has an action item so you know what you have to do.

This is a strategy if you don’t have competing offers (but I’ve included a section on it in case you’re a lucky bunny).

  1. Before the negotiation: Things you have to do leading up to your offer
  2. Research like your life depends upon it (or at least, $1 million does)
  3. In the negotiation room: Scripts to avoid giving the 1st number
  4. In the negotiation room: Playing ball and getting them to see your value
  5. In the negotiation room: Transitioning into other benefits
  6. Leverage: How to use a competing offer to your advantage
  7. Go-to scripts for “We don’t have the budget for that” and other BS
  8. Last words of wisdom and the number 1 rule: PRACTICE, PRACTICE, PRACTICE

Disclaimer: When can I not negotiate?

Generally speaking, you can negotiate MOST jobs coming straight out of college. There are a few exceptions though where it might not work very well. 

  1. Very structured jobs where you know the salary is a fixed, known quantity without wiggle room. Think government or military. Potentially investment banking or consulting (but you can get creative).
  2. Unspecialized, undifferentiated jobs with massive supply. Think waitresses or baristas. You negotiate based on your specialized skills that only you can bring to the table.

If your first job doesn’t fall into these two categories, then let the negotiating games begin. 


Step 0: Before the negotiation: Things you have to do leading up to your offer

  1. Do not write an expected salary during the application process. If a portal doesn’t let you through without one, write “N/A”, “1”, “0” just to get the ball rolling. If you give them a number, you’ve pigeon-holed yourself.
  2. During the interview process, do not give a number. You want to say something along the lines of, “My first priority is finding a career that is a good fit in terms of my values and what I want to do in my career.” 

You want to position yourself as someone who can add value and not someone who the company can run over and get without a struggle. They need you, not the other way round. 

Action item: Do not spit out a number EVER before you get the offer. Cool? Cool.

Step 1: Research like your life depends on it (or at least, $1 million does)

Negotiating is a disproportionate results game. This means that for doing a little extra work upfront, you can get MASSIVE results on the backend. 90% of the negotiation is done before you step into the room.

In this section, I’m going to break down the 4 things you have to research and walk you through each of them. 

  1. Salary ranges 
  2. What the hiring manager’s or company’s top challenges are
  3. How you can solve the hiring manager’s top problems
  4. Your interests (the whole compensation package)

1. Salary Ranges

When researching salary ranges, you should find out:

  1. What your target company is paying for your role
  2. What the top 3 competitors are paying for your role
  3. What the top 25% range is for your role

Resources to check for salary ranges:

  • Glassdoor Salaries — Great across the board
  • Indeed Salaries — Great across the board
  • Paysa — Great for tech companies and roles
  • Payscale — Great across the board
  • Salary.com — Great across the board
  • Personal or alumni network with relevant experience. Ask them, “What is a reasonable salary for this kind of job with these expectations?”

Why: You want to know your value as determined by the market (not you. Sorry) so you don’t undervalue or overvalue yourself. It gives you a benchmark.

Action item: Find salary range for your role, the competitors, and the top 25% range. Memorize these numbers.

 

2. What the hiring manager’s or company’s top challenges are

Negotiations are collaborative. You’re both trying to come to an offer that you’re both happy with and satisfies both of your needs. Surprise, it’s not just about you.

Ideally, you were figuring out your hiring manager’s biggest pain points when you were networking and going through your interviews. But if you didn’t, get the answer to this question before the negotiation. Here’s the deal:

Your value is determined by your ability to solve your hiring manager’s biggest problem.

Here are some ways to figure out what their problem is:

  1. Talk to the manager or the people on the team. See what they’re working on and ASK what problems they’re currently facing. What is preventing them from meeting their target goals? What would be their target goal? 
  2. Is there a certain metric they’re trying to hit? A certain revenue number, more leads, faster processes, less bottle neck. 
  3. Is there a certain trait or value that the manager really wants? More reliability, more speed, shorter project times, a certain skill set missing in their current team. 

Here are some questions you can ask to dig deeper into your manager’s biggest problem:

  1. What’s something you’d like to improve within your team? How can I help?
  2. What does success look like on your team? What are these successful employees doing?
  3. What is your number 1 goal for this quarter? How can I help?
  4. What is the number 1 problem you’re currently facing? How did you try to solve it before? Why didn’t it work? 
  5. What capability are you missing in your team? How can I help?
  6. What KPIs are you trying to this quarter? What would be a stretch KPI that you’d really like to hit? How can I help?

You get the idea. Dig deep and really get into the head of your manager. By knowing their biggest problem (and knowing how to solve it as we’ll go into below), it’ll become a no-brainer for the manager to increase your salary.

Action item: Find the hiring manager’s top problems by asking them and the team what they are. Dig deep into their heads.

 

3. How you can solve the hiring manager’s top problems

Now that you know exactly what the pain points are for your manager and your potential team, you can come up with a solution for it. THIS is the leverage you can use to justify your higher value to the company.

What you want to do is CREATE a 1–5 page proposal outlining your solution and the exact steps you’d take to solve their problem over 30–60–90 days if applicable. 

Disclaimer: This can be a bit of work upfront. But the upsides are massive. Remember, disproportionate results. A couple hours of work can get you a few extra thousand dollars now and a million over your career.

Finding the Solution:

They’re hiring you for your ability to do the work and solve their problems. So firstly, trust that you have the intelligence and learning capability to do this! I believe in youuu.

Next, do your research in terms of coming up with a solution. Google is a great place to start. Literally Google “Solution to ‘problem’” Check if any other experts and influencers have solved this problem already. See what they did. 

Quora is another great place to check. See if someone else has asked the question or ask it yourself and see how people respond. 

Ask around in your own network. Friends, professors, people in the same role in another company. Ask them what they would do. 

Once you feel like you’ve collected enough information from others + your own opinions about how you could solve the issue at hand, it’s time to come up with the proposal.

The Proposal:

This is a literal, printed, 1–5 page proposal that you’re going to use in the negotiation room through a tactic called “The Briefcase Technique”, coined by Ramit Sethi of I Will Teach You to be Rich (to be explained later). 

How you want to create the proposal is up to you and is dependent upon the company + problem. Just be specific with exactly what you’re going to do, and what sort of results they can expect. Use facts, charts, tables, timelines, expected results, etc if applicable. Show them you really did your research. 

You want to surprise them and make it a no-brainer for them to understand your value and why you deserve a higher offer.

Here are some ideas of what you can include in your proposal.

  1. Identify the problem(s)
  2. Timeline, weekly break down of the actions you’re going to take
  3. The expected results the action will result in (Eg. 200 more leads/week)
  4. The dollar value of those results if possible (Eg. 200 more leads/week leading to $20,000 more revenue/week)
  5. A strategy outline and why it will work
  6. Different tests you’d run to improve efficiency
  7. Different pricing options of solutions (eg. software) to help solve a problem, and byproducts of it
  8. Explanation of how much time would be saved by your new processes, and how that time can be used to create more revenue

You get the picture. You want to knock them out of the park with your proposal. My general recommendation is to try to quantify your value as much as you can. It’s pretty hard to argue with numbers (eg. If you had a solution that would bring in an extra 100k-1 million, a couple extra thousand is penny change to the company).

By showing how you can solve their problem (and you got the plan to back it up 😎), you can make up for your lack of experience with your initiative and research.

Action item: Write a proposal outlining your solution to the hiring manager’s biggest problem. You want to satisfy their interests as a manager.

 

4. Your interests (the whole compensation package)

Negotiating is more than just money (surprise!). There’s a whole suite of offerings you can ask for. Here’s a buffet of other options that may be of interest to you:

  • More paid time off
  • More vacation time
  • Health care benefits
  • Paid meals
  • Flexible working hours
  • Remote work/work from home
  • Expense account for travel
  • Education reimbursement
  • Relocation reimbursement
  • Faster review cycles (I love this one. This lets you bump up your salary incrementally at a faster rate, adding 100,00s over time. Don’t overlook it)
  • Stock options
  • Whatever you feel is important to you

This is where it’s important to know your interests. I want to explain this concept a little further because it’s IMPORTANT. 

What are interests?

Interest is not I want $58,000/year, I want 20,000 stock options or generally something very specific. Interests are looking at the bigger picture. 

For example, an interest can be:

  • I want to live in a single apartment in Manhattan, near work
  • I want to make sure I’m taken care of if I get sick
  • I want my commute time to be short and affordable

This lets you find many options to satisfy your interests. It gives you more flexibility in negotiating. 

How to satisfy an interest

Example 1: I want to live in a single apartment in Manhattan, near work

Options to satisfy your interest:

  • Get a 10k bump in your salary
  • See if the company has real estate which you can live in
  • See if the company will partially cover housing

Example 2: I want to make sure I’m taken care of if I get sick

Options to satisfy your interest:

  • Get a 5k bump in your salary
  • Healthcare benefits (+ add some dental for fun)
  • More sick days 

Example 3: I want my commute time to be short and affordable

Options to satisfy your interest:

  • Having the company help finance an apartment nearby
  • Travel reimbursement
  • Remote days to save commuting time

Use the idea of interests to create your full compensation package that satisfies all your interests.

Action item: Outline what your interests are and figure out all the options that satisfy them. Create an ideal compensation package based on your interests. Know the lowest amount you’d accept that would satisfy most of your interests. Memorize it.

Step 2: In the negotiation room — scripts to avoid giving the 1st number

Before you enter the negotiation room, you should have:

  1. The top 25% salary ranges memorized
  2. A clear idea of the manager’s problems
  3. A printed proposal outlining your solution to their problem
  4. A clear idea of your compensation package memorized

Remember, your hiring manager negotiates all the time. They might throw some curve balls. DON’T GET FRAZZLED. Stay calm. Know what you want. And don’t let them guilt trip you for asking for a higher offer. You did the work. You deserve it. 

Number 1 rule of negotiation

There’s a pretty well-known rule in negotiation: don’t give the first number. 

With these scripts, here’s some easy ways to avoid spitting it out when you’re starting to get pressured.

Scripts for avoiding giving the first number

Small talk between you and the hiring manager

Hiring manager: Can you tell me how much you’re expecting to make?/How much did you make at your previous job?

You: I just wanted to thank you again for the offer. I’m really excited about working here and this is the job I want…

Option 1: I’m negotiable depending on the range you’re offering, however, my first priority is finding the right fit.
Option 2: I’m sure we can find a number that’s fair for both of us but for right now, I just want to see if there’s a fit on your side and on my side.
Option 3: I’m much more interested in doing [type of work] here at [name of company] than I am in the size of the initial offer.

Hiring manager: That’s great to hear and I definitely want to come to an agreement that’s good for the both of us. With that said, I need a number. 

You: I completely understand where you’re coming from…

Option 1: I’m willing to accept any reasonable offer.
Option 2:*If they’re really pushing and you’re having a hard time deflecting* Given my research for this role at your company, I see the range falls between X-X (top 25%). 

Hiring manager: Understood. We’re willing to offer you $X.

Awesome! You got the ball rolling and hopefully got them to give you the first offer. Even if you didn’t, you put yourself in the top 25% range. Now the fun part starts!


Step 3: In the negotiation room — playing ball and getting them to see your value

There is where the fun part starts. You need to have confidence in yourself and the value you can provide. Practicing is the best to do this. Below are some different scenarios and scripts to negotiate a higher offer. 

Ps. Don’t forget your secret weapon, the proposal 😉.

Script to negotiate

Hiring manager: We’re willing to offer you $X.
You: Thank you for the offer. I just want to reiterate my interest and that I do want to work here. With that being said, based on my research for this role at this company, I see the range falls between X-X (Top 25%). 
It’s so important to me that this is a good mutual fit for the both of us. So I wanted to talk about why I’m a great fit for this position and the value I can provide, and find a number that works for both of us. 
Hiring manager: Some BS objection. This could be “We don’t have the flexibility. This is the highest we can go. We don’t have the budget. The economy is bad. Our plumbing is broken. My dog died (okay this isn’t BS).”
You: I hear you and I understand where you’re coming from. With that being said, I really want to emphasize the value I can bring to your company. I know you’re concerned about “the problem you know they’re having” based on our previous convos/convos with the team. I have some great ideas for what I’d do and actually have written out a proposal.
[Pull out the proposal like a boss. This is the Briefcase Technique]
Would you like to drill into this? Or is there another job area you’re more concerned about to start with? (Ideally, because of the research you’ve done, and the shock and awe factor, you shouldn’t get any surprises here)
Hiring manager: *In shock and amazement* Sure, let’s see what you have here.
You: *Explain the proposal. Show the value. Make it so hard to say no to you*
I would like to work here. I know I can bring these sort of results immediately. I do believe that the value I know I can bring to the company warrants an offer closer to $X (the highest number on the range).
Hiring manager: Well, you make a great case here. I think we may be able to up the offer to $X. But that’s as high as we can go. 

You have to decide if you want to keep pushing for a higher number at this point. Read the situation. Use empathy. Keep emphasizing your value. 

Scripts to keep pushing for a higher offer

Option 1 (The investment): I really appreciate you doing that. I think we’re almost there. Again, I want to emphasize looking at this like an investment. You could be paying candidates $X (the low ball number) and they’d maybe double your investment. I’m confident that I can triple, quadruple, or more the investment given [a reasoning to back up your claim]. This would more than make up for the $X difference (difference between the high point on the range and what they’re offering you). 

Option 2 (The uber experienced): I’m very excited about the offer and think that we are very close to an agreement. However, I would like to talk about compensation. Since I not only fulfill the listed qualifications of the job, like [name some of the job requirements], but I also have [list some of the unique characteristics that make you extra qualified for the role that you know are valuable based on your research], I’d like to see the base salary at $X.

  • See what the manager says. If they go higher, great. If not, you can try the nudge phrasing, or transition into other benefits.

Option 3 (The nudge): I really appreciate that. I think we’re almost there. If we can settle at $X, I think we can have an agreement here. 

Now that you’ve (hopefully) successfully negotiated a raise in your salary, let’s see if we can’t up those perks.


Step 3: In the negotiation room — transitioning into other benefits

Now that you’ve got a number you like, time to get some perky perks. 

Transition script:

You: Thank you! This role is really exciting and I’m really glad we were able to come to a number we could both agree on. I would like to follow-up on a couple of other details and forms of compensation though. So [list of benefits you want to explore like paid time off, remote days, etc]. Would it be appropriate to discuss some of those?
Hiring manager: Yes, we can definitely look into it. 
You: Great! How flexible are you on [benefit]? I know the offer included X amount of benefit, but I would like to request X amount OR I would like to request [benefit]. How flexible are you on this?
Hiring manager: Yes we can definitely do that (woohoo) OR I’m not sure. We’ve never done that for anyone else. 

Using the ARMS technique to turn a NO into a YES

ARMS, another tactic coined by Ramit Sethi, goes something like this:

  • Agree: This is a nifty Jedi mind trick. By agreeing with them first, you’ve primed the employer and made them more likely to agree with you.
  • Reframe: Remember. It’s about collaboration. It’s not about you. Show how the perk you’re asking for will benefit the company and how great it would be for them to embrace it.
  • Make your case: Pitch to them why the benefit you’re asking for will benefit them (help you be more productive, more results, etc.). AND give them an out too. Say you can switch back if it doesn’t work out.
  • Shut up: When you’ve made your case, let the manager speak.

ARMS script example in action for remote work 

You: Thank you! I’m really excited about this role and glad we were able to come to a number we could both agree on. I would like to look into other forms of compensation if you’re open to it. 
Commuting time particularly affects my productivity and I know I could be more valuable if I could work from home a day or two each week. Would you be open to that?
Manager: I’m sorry. We don’t really do that around here. 
You: Agree: I understand your company hasn’t done this in the past. But there’s great research supporting this and how it improves worker happiness and productivity. And we have all the tech to make this happen.
Reframe: I think there’s a great opportunity here to test this out. And if it’s successful, it opens up the doors for more candidates doing remote work in other functions that could hugely benefit the company.
Make your case: I know I can provide huge value and results working from home. Testing it out on me on a small scale is low risk. And if it doesn’t work out, we can always go back to the old way.
Shut up: How does that sound?
Manager: Well you make a great case. Hard to argue with. Sure why not. 

And if they say no, keep testing out other benefits you want until you’re happy with your overall package. 


Step 5: Leverage — How to use competing offers to your advantage

Leverage with other competing offers is the best negotiation tool. You can basically start a bidding war. In this case, use the script below and scripts from Step 3: Playing ball such as the investment option or the uber experience option to showcase your value to the company and why they should meet your interests.

Script for introducing that you have competing offers

Option 1: Thank you so much for the offer! I am really excited about the company and the role. However, as you know, I have been talking to other employers and do have another offer(s). If you’re able to move the pay to $X, I think we can have an agreement.
Option 2: You’re my top choice, but I want to be totally honest with you — I have two other offers, but if we can work this to a fair number, I think we can sign this and get this done.

Remember, you’re not obligated to tell them what your offer is or who the company is. Just don’t lie and say you have an offer if you don’t. 

If they’re really pushing you, you can reply with something like this:

You: I’m really interested in working here. So the size of their offer is irrelevant. If you’re able to move the pay to $X, I think we can have an agreement here.

Deflect as much as you can. You don’t owe them an explanation. If they’re playing hardball with you, remember to use the other tactics such as the proposal and investment scripts to show why you deserve to be paid higher.


Step 6: Go-to scripts for “We don’t have the budget for that” and other BS

Scripts for avoiding the first number

Option 1: I’m negotiable depending on the range you’re offering, however, my first priority is finding the right fit.
Option 2: I’m sure we can find a number that’s fair for both of us but for right now, I just want to see if there’s a fit on your side and on my side.
Option 3: I’m much more interested in doing [type of work] here at [name of company] than I am in the size of the initial offer.

Scripts for “We don’t have the budget/flexibility/bad economy”

Proposal script: I hear you and I understand where you’re coming from. With that being said, I really want to emphasize the value I can bring to your company. I know you’re concerned about “the problem you know they’re having” based on our previous convos/convos with the team. I have some great ideas for what I’d do and actually have written out a proposal.
The investment script: I really appreciate you doing that. I think we’re almost there. Again, I want to emphasize looking at this like an investment. You could be paying candidates $X (the low ball number) and they’d maybe double your investment. I’m confident that I can triple, quadruple, or more the investment given [a reasoning to back up your claim]. This would more than make up for the $X difference (difference between the high point on the range and what they’re offering you).
The uber experienced script: I’m very excited about the offer and think that we are very close to an agreement. However, I would like to talk about compensation. Since I not only fulfill the listed qualifications of the job, like [name some of the job requirements], but I also have [list some of the unique characteristics that make you extra qualified for the role that you know are valuable based on your research], I’d like to see the base salary at $X.

Script for when they really aren’t budging on a number but you can use to your advantage and save face

I understand you don’t have any flexibility with the salary right now. However, I’m really interested in working with you. If we agree on one thing, then I think we can have a deal.
If I do an amazing job in the next 6 months, will you agree that we can revisit and renegotiate my salary at that point? And could you put that into our contract?

Script for negotiating other benefits

Thank you! This role is really exciting and I’m really glad we were able to come to a number we could both agree on. I would like to follow-up on a couple of other details and forms of compensation though. So [list of benefits you want to explore like paid time off, remote days, etc]. Would it be appropriate to discuss some of those?

Script for competing offers

Option 1: Thank you so much for the offer! I am really excited about the company and the role. However, as you know, I have been talking to other employers and do have another offer(s). If you’re able to move the pay to $X, I think we can have an agreement.
Option 2: You’re my top choice, but I want to be totally honest with you — I have two other offers, but if we can work this to a fair number, I think we can sign this and get this done.

Step 7: Last words of wisdom and the number 1 rule: PRACTICE, PRACTICE, PRACTICE

Here is a hodge podge of bits of advice and tips I’ve gathered to help you out. But I did want to share one piece of advice that is super useful

If at any time you feel frazzled, not in a great emotional state, stressed, or you want to research and come up with a stronger case, you can ASK FOR MORE TIME TO THINK ABOUT THE OFFER. 

You could say: Thank you. I really appreciate that. I’m currently not comfortable making a decision right now. Could we talk again in a day or 2? 

There’s nothing wrong with asking for more time. This will let you relax, and they may even come up with a better offer too. 

Now, advice!

  • PRACTICE PRACTICE PRACTICE. Find a friend, your mum, your rabbit, I don’t care who. Just practice.
  • Remember, you’re awesome. You can do this. 
  • Smile! But not all the time. Smile when asking for something. Makes them feel good
  • An extra few thousand is nothing to a company, but can be a million for you (literally). Don’t feel bad for negotiating
  • Be persistent. Stick to your guns! Re-highlight why you deserve it
  • Companies will ALWAYS push back on your first offer. Don’t let it deter you. Justify why you deserve the bump
  • Do not let their BS deter you from what you deserve it. They may tell you things like “Our employees are really happy here and we have great retention. Most are only paid $X amount. There’s free magic shows every week!”. All of this is IRRELEVANT to you and the value you bring to the company. Emphasize that.
  • Stick to your guns! Re-highlight why you deserve it
  • Use words your employer used. Words from the job description. Words from your conversations together. Speak their language
  • Be flexible. If the company doesn’t negotiate on salary, negotiate other perks
  • Be silent. It makes you seem more professional and is better than being angry or nervous. ALSO, instead of saying um or like, just go silent. Makes you seem more confident
  • It’s best for the other side to do most of the talking
  • Be prepared. Do all your research before hand. Know what you want
  • Be patient. Wait for the company to make the first offer
  • Be collaborative. Work together to get to a deal that you both feel comfortable with. Also helps you keep your goodwill.
  • Collaboration DOES NOT EQUAL compromise. You want to satisfy both of your needs. Not half ass them.
  • Always thank them and reiterate your interest and excitement to work there. Positivity and making them feel good helps keep them on your side.
  • Practice empathy and appreciation. Appreciate it if they’re closing the gap to what you want. Empathize if they say it’s a bad economy
  • Frame the raise as a benefit to the company, not just your own. Helps them feel more comfortable with the raise
  • Always frame it as you want to make sure your compensation is commensurate with the value you’re going to bring
  • Provide some power to the other person
  • Read the situation. Don’t push for the extra one thousand at the risk of burning the relationship

CALL TO ACTION