Doing A Salary Negotiation On Your Own? Here's Why You Shouldn't

At Ralph, we understand that a fundamental question for potential clients deciding whether to use our service is about attribution: how do I know that Ralph can help me negotiate above what I would do on my own? We have been interested in validating this ourselves and recently went through a situation which shows Ralph’s impact in a causal-like way.

During a 6-month period, we met two candidates who graduated with the same PhD from the same university. We provided both candidates access to our proprietary compensation database. Candidate A had offers at Waymo, Google, and Facebook. Candidate B had offers at Waymo, Google, and Apple. Candidate A declined to use Ralph. Candidate B chose to be advised by a Ralph Career Agent. Both candidates accepted an offer at Waymo.

With similar backgrounds, access to the same compensation data, and accepting the same offer around the same time, the only major difference was in how these two candidates negotiated. Candidate B accepted a package offer that was $140,000 higher ($35,000 higher per year) than the offer Candidate A accepted. Validating Ralph’s impact even more, Candidate B negotiated his offer during COVID-19 whereas Candidate A negotiated his offer before COVID-19 occurred.

What did Candidate B, using Ralph, do differently (and more successfully) than Candidate A?

There are two changes Ralph was able to advise Candidate B to attain that Candidate A did not have the experience to negotiate on his own. The first change is that Candidate B was able to get Waymo to increase his offer when Apple and Google were both significantly lower than the Waymo offer. How is that possible? Ralph advised Candidate B how to negotiate from a position of his market value, rather than what his current offers were. Candidate A did not have the negotiating skill to do this.

When we talk to prospective clients, most of them are focused on our proprietary compensation database. And yes, that is absolutely part of our value. A more significant part of our value, however, is our negotiation expertise. Negotiating is a skill people spend careers developing. How to understand your leverage, an individual’s value to the company, the candidate’s relationship with the recruiter and hiring manager, the cues the company gives, and more comes from an accumulation of experience through hundreds of negotiations. Companies have that experience; individuals typically don’t -- unless they are advised by Ralph and our wealth of experience working on behalf of candidates.

The second change Candidate B achieved was increasing the Waymo offer again when all three offers were at a similar value. Here Ralph used our understanding of compensation and how hiring managers value talent to convince the company that another change was needed for Candidate B to accept. In contrast, Candidate A had never been in industry so he had no way of knowing what to say or how.

What did Candidate A do wrong?

After speaking with Candidate A we know he made a couple of obvious mistakes. He knew he didn’t want to go to Facebook so he rejected their offer immediately. This was a bad decision because he deliberately hurt his leverage, but it’s a mistake many candidates unintentionally make. When the Facebook recruiter was pressuring him to decide, he didn’t know how else to respond. Second, his negotiating strategy was essentially to get lower offers to match the value of his highest offer. Once the offers were all relatively equal, he didn't know how to negotiate above that plateau. Stuck and unsure of what else he could do, he accepted. Companies count on this type of negotiating. This is why they always pressure you to share your offers first.

One other common mistake that Candidate A did not do, but I’d like to highlight is thinking that your friends, advisors, or the internet is enough to help you negotiate.This is a common belief. Unfortunately, unless your friend is a recruiter for your industry, your more experienced peers have essentially the same negotiating knowledge as you do. Listening to them will only result in the suboptimal offer they themselves received.

Even if you have a friend that negotiated a great offer, we see that friends almost always obfuscate their compensation, even when sharing to other friends. They worry that sharing their true earnings can make others resentful if they don’t get paid the same. Maybe they share what they received annually, but they don’t include the additional bonuses they received. Or maybe they don’t want to discourage you, so they say your offer is promising when it’s actually quite mediocre. We call this the “I love your new haircut!” response.

Conclusion

Negotiating doesn’t need to feel like gambling. At no point was Candidate B fearful of losing his offers. This is both because of our experience guiding him and also the way we helped him negotiate with the companies. When Candidate B accepted his offer, the negotiations didn’t damage any relationships. His hiring manager was actually impressed. Beyond this example, 92% of our clients say “Ralph had an impact outside of what I could have done on my own.”

Academia is distinctly different from industry. The scarcity mindset in academia will hurt you in industry. Unfortunately for most PhDs, this is an unknown unknown: they are not aware of what or how high to ask, so they miss out. They are accustomed to being controlled and not having a voice, so they don’t try.

Candidate B paid Ralph $13,000 one time, to make an additional $35,000 per year more than what he would have done on his own, assuming he negotiated how Candidate A did. This was the financial ROI for using Ralph, but what candidate B gained was not just compensation. He learned how the company values him and how he has an active role in determining that value. He learned how he could empower himself and how to have difficult conversations with his boss. He learned a skill that will pay dividends not just in future offer negotiations but in any type of raise/promotion conversation. Most importantly, he gained a confidence that truly changed the way he thinks about his career.

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