Don't Just Accept the First Offer

What the research found

Marks and Harold (2011) surveyed 149 newly hired employees across a range of US industries about how their starting pay was set. Those who chose to negotiate rather than accept the employer’s first offer had starting salaries about $5,000 higher on average.

How people negotiated mattered too. Those who openly discussed their position, the issues and their perspective did better than those who compromised quickly or simply accommodated the employer. People who were more risk-averse were also less likely to negotiate at all.

How to read it

This was a survey, not an experiment, so it shows a correlation. The people who negotiated may have been stronger candidates to begin with, may have held other offers, or may simply have been more confident. You cannot read it as “negotiate and you get $5,000 more.” What you can say is that among new hires in this US survey, those who negotiated tended to start on higher pay.

There is experimental evidence on a related point: some people don’t ask simply because they don’t know they can. In a natural field experiment with nearly 2,500 job seekers in the US (Leibbrandt & List 2015), when job ads did not say wages were negotiable, men were more likely than women to negotiate. When the ad said so explicitly, the gender difference disappeared. Whether someone asks depends not only on personality but also on whether they believe asking is allowed.

We did not find empirical studies on salary negotiation and pay in Japan. In many workplaces pay bands are fixed by grade, so it helps to think beyond the base number: grade, allowances, start date and working arrangements can also be on the table.

Three things to prepare

1. Know the market number. Look at at least three comparable job ads or official wage statistics for the same role, region and experience level, and settle on a range you can justify. In real negotiations between Swedish graduates and employers (Säve-Söderbergh 2019), women submitted salary requests more often than men, but asked for less. Having a well-grounded figure ready before the conversation makes it harder to undersell yourself in the moment.
2. Collect your evidence. Write down what you worked on and what came of it, with dates and numbers. If you already keep a one-line note of each day’s progress, this step is mostly done.
3. Script one sentence. For example: “Thank you for the offer. Based on my experience and the market, I’m looking for X, because Y.” Thanks, number, reason. In the study, open discussion of one’s position and reasons was the style linked to better outcomes.

A small step for today

In the app, you can tick “Prepared for a negotiation” when you do any one of the three things above. Looking at one comparable job ad today is enough. Negotiations happen only a few times a year, but preparation can build a little each week, so that when the moment comes, your number and your evidence are already in hand.

Sources

• [C7] Marks & Harold (2011) Who asks and who receives in salary negotiation. Journal of Organizational Behavior.
• [C8] Leibbrandt & List (2015) Do Women Avoid Salary Negotiations? Evidence from a Large-Scale Natural Field Experiment. Management Science.
• [C9] Säve-Söderbergh (2019) Gender gaps in salary negotiations: Salary requests and starting salaries in the field. Journal of Economic Behavior & Organization.