When I graduated college, I was lucky to have a job offer on the table. I negotiated a bit on salary, but not as much as I should have, as I was just happy that I was about to be employed. It was my first job out of college!
However, when I started my second job, I broke the first rule in negotiations: Never show your hand. When the potential employer asked me for my current salary … I told them. This was one of the biggest financial mistakes in my career.
The first rule of negotiations is not to tell the other party what you are willing to pay or what you are willing to be paid. This is true whether you’re buying a car or when negotiating salary. When the employer asked me for my salary, my answer should have been as follows: “I don’t think my current salary is relevant at this point. What do you think is an appropriate salary for someone with my background, education and experience?”
I’ve always touted that your career is your greatest financial asset. Most of your career is built on past performance. If you perform well at your job, the promotions and raises will follow. When I was offered the job at my company, I knew I wanted to build a career there, which makes this mistake even more painful. The company is great, offers career growth, and is managed well. That said, I knew I would have a tough road as it relates to salary increases within the company.
I would have to say that for each promotion, I had to fight for a decent raise. This would have been easier had I negotiated better from the beginning. Over the course of the past eight years at my company, this mistake has probably cost me tens of thousands of dollars.
Although it is something I wish I could do over, I try not to dwell on it since it is in the past. What’s done is done. It’s time to see how I can capitalize on my current performance and continue to negotiate hard on future promotions and job changes.