I’ve made every mistake in the book, from running up big debt to cashing out a 401k. Everything financial experts tell you not to do, I’ve probably done. But one mistake stands out in my mind amongst the rest. Let’s go back in time to look at when I accepted a low-ball salary offer.
In 2004 I was working as a contract employee on a large project, which I vow to never do again. When the project started winding down, guess who were the first to go. Through that work I lined up a job as a regular employee on the next ‘big project’. It was supposed to start in two weeks, which then grew into two months. I enjoyed unemployment but as two months grew into three, I started to worry. Was my contact ever going to come through for me? He suggested I apply to one of the other firms involved in the project instead, they could hire me sooner. But that also meant interviewing with people I’d never met, there was no guarantee I’d get the job.
I had a terrible interview, after leaving their offices I walked back to my car in tears. So imagine my surprise when I got a phone call the next day offering me the job. I was in shock. But there was one small problem, they couldn’t pay me what I was asking for. It was higher than my ‘pay grade’ would allow, would I accept (insert dollar figure) instead?
I think my response was “Um, sure”. Yeah, not my most brilliant moment. Without thinking I had set myself back on the career ladder. The salary I accepted was less than I had been making before!
I should not have accepted their offer immediately, with a clearer head I would have either countered or said I need to sleep on it. In hindsight, I know I could have bargained for at least my previous salary if not my desired one. I should have at least tried. I racked up debt in part because I was now making less money, with the same spending habits. Negotiating for a better salary would have helped with money mistake 1, my huge credit card bill.
I have since left that company and in my current position make 50% more than what I accepted then. I finally learned how to negotiate. But maybe that figure would be 55% or 60% had I stood my ground that day. The legacy of this one bad decision may well follow me for the rest of my career.
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11 comments:
I'm the world's worst at salary negotiations, and I understand it's a common weakness amongst women. I know my fear stems from having my "I really think I'm worth at least $5000 more than that" invite "Dream on, there were 100 other equally-well qualified applicants for this crummy job, consider the offer withdrawn for even thinking you were remotely valuable".
Now I set my own hourly rates and refuse to negotiate because I can't STAND the thought of giving someone a massage and making them feel terrific after having them question my value. As it is, I'm about 15% below average (and I started out at 30% below, so this is an improvement all around).
Don't kick yourself for this mistake too much - we all make it, and you caught up most of the way pretty quickly!
I don't think you had much room to negotiate in this situation since you were unemployed. You never know had you countered, whether they would have made a counter-counter offer. You were risking losing the original offer. I think I would have immediately accepted as well. I'll know for sure after I get laid off and start applying for new jobs. :-P
Yes, you should always be a bit cautious in these negotiations. In some cases you have leverage, in others you have to take whatever they give you. I guess I should have made it more clear that I did have a back up plan, I could have kept waiting for my boss's company to hire me.
I think once you've gotten to the point they are offering you the job you probably have a little wiggle room. You've already beat out the competition and the company has clearly decided they want you! If they say it was a close race between other candidates and you, be wary of making demands.
Even if you had negotiated at that one moment, I think learning what you are worth is a challenge that takes many, many years. I am still learning this too. Don't be too hard on yourself - we all work for less than we deserve at one point or another. You are ahead of the game in that you recognize your potential; other people lowball themselves and stay in dead end or limiting positions for most of their lives.
*sigh*
I just did this recently! I accepted the offered salary and didn't negotiate. It was alot less than I was expecting, and now that I'm employed by them, I found out that they really low balled me.
A few strikes against me from the start..but mainly, I didn't know what my marketable value was. The various salary website's were a good starting point, but not specific enough to get solid confidence.
From the looks of your post, it did make you stronger in the long run, and give you the ability to demand what you are worth!
@Horizon - I'm sorry you got low balled, hope the new job is OK at least. I found out later it was the practice of my company to low ball you at first, if you took it then great. I didn't detail how I boosted my salary so much, it's one of those things they tell you never to do so I'm saving it for a later post!
Although I was low balled, I can admit very happy with the company and even happier with the people. I'll take that for now...and try to work on increasing my knowledge, and value, in the meantime.
I look forward to your future post with more information!
I've made the very same mistake.
I accepted a contract position for much lower then I wanted, only to find that some current and previous people had been paid more!
The headhunter convinced me to take less ... I guess so that they could bill a huge commission.
Unfortunately, I went into debt because I was making less money.
I tried to negotiate my first job out of college, because I had a friend on the inside say they were low balled.
I mistakenly tried to get a signing bonus rather than salary and I was scared when they rejected the offer. I didn't lose the job and now I am not sure I could have gotten much more if any if I had of asked correctly.
I made the same mistake after being unemployed for a couple of months. I am finally out of that position and THIS time I researched my true worth. www.salary.com is a good tool and there are several others out there. Employers do the same thing - so they will know if what you are asking was fair. Also I was already employed when this offer came along so I was not as desparate. Additionally I brushed up on my interviewing skills and revamped my resume by a professional. It really paid off and netted me a 45% increase which is really what I should have been making for the last 2 years anyway...
Even if you're unemployed, you do have leverage if you're the first choice. At worse, they can say no but employers won't take back the offer and go for candidate #2. I think you definitely learned from that past mistake but I'm posting in case other women come across your blog and comments. I'm a woman, on the shy side, but even I negotiated and it made a huge difference. If you're shy about it, ask for time to consider the offer and then work up some courage.
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