5 Expensive Mistakes in Salary Negotiation: How to Avoid Them

Most people don't negotiate their salary when they accept a job -- and they're leaving money on the table. A Pew Research Center study found that just 32% of men and 28% of women asked for more money when they received a job offer.

Of those who asked for more money, 28% received the full amount they asked for, while 38% received less than they asked for but more than the initial offer. In other words, two-thirds of those surveyed successfully negotiated a higher salary than the company offered.

If you've received a job offer, not negotiating is the biggest mistake of all. Once you've decided you're willing to negotiate, here are five mistakes to avoid.

1. Not doing your research

There are hosts of tools out there that can help you estimate what a role should pay in your area. Salary.com, Payscale, Glassdoor, LinkedIn Salary, and the U.S. Bureau of Labor Statistics Occupational Outlook Handbook are all great resources for estimating what other people in similar fields are earning.

If the salary offer is below the market value, you can politely tell the recruiter, "Based on my research, a typical salary for this role would be around $X. Would you be able to offer that?" Even if they can't match the full amount you're asking for, perhaps you can meet in the middle. Any amount over the initial offer is more money in your checking account every payday.

2. Asking for a vague range

If you're asked about the salary you're seeking, you may be tempted to give a wide range, i.e., "I was hoping to find something in the neighborhood of $70,000 to $80,000." But researchers at Columbia Business School actually found that it's better to give a precise number, like $78,500.

The reason? When you offer a very specific number, the person you're negotiating with assumes you've done extensive research and have an accurate sense of your market value. You're more likely to get a final offer that's in line with the salary you're seeking.

3. Making it only about money

If extra money is off the table, see if there's flexibility elsewhere in the offer. Perhaps you can negotiate an extra week of vacation time or the ability to work from home a few days a week. For some people, the extra time could actually be more valuable than extra money. Or maybe the company would be willing to offer relocation assistance if you're moving or pay a signing bonus.

4. Focusing on your needs when you ask for a raise

Once you've been with your company for at least a year, it's reasonable to ask for a raise if you've been a strong performer. In fact, if you don't get an annual raise, you're essentially getting paid less because your money loses purchasing power due to inflation.

But even if your bills are rising astronomically, leave that out of this. Focus on your market value, as well as what you've accomplished over the past year. If you've exceeded expectations, you're worth more to your company than you were last year, and you should be paid accordingly.

5. Never applying for new jobs

According to Zippia research, the average raise for switching jobs is 14.8%, while wage growth is 5.8%. It's worth applying for new roles at least every couple of years to see what kind of opportunities are out there. In fact, research shows that people who stay at the same workplace for more than two years tend to earn less money.

You could land an offer for a higher-paying job. You could accept the offer, but you could also take it to your current company and see if it'll match the offer. Doing this can be risky, though. You should be prepared to follow through and take the offer if your company refuses to budge on salary or questions your commitment for interviewing elsewhere.

Why it's not just about salary

Don't just look for the highest salary possible if you're in the market for a job. Also, consider whether a job offers a good health insurance plan and 401(k) company match, as well as whether it has a generous paid time off (PTO) policy. A great benefits package can sometimes make up for a salary that's slightly less than you were seeking.

Also scrutinize every agreement you'll be required to sign if you accept the job. For example, many companies require workers to sign non-compete agreements that can make it difficult to get hired by companies in a similar field -- even if you get laid off or fired. Some companies also restrict outside employment, which could limit your ability to earn extra money through a side hustle.

You want to hold out for the best salary possible -- a higher salary can do great things for your personal finances. But be very cautious before signing anything that could make it harder to earn money in the future.