Employees who negotiate their salary — from initial offer to annual raises — can accrue almost $1 million more in lifetime income than their passive colleagues, according to new findings from Salary.com. Nearly half of the employees who participated in a recent survey can be counted among the passive.
The career site found in its survey that 41 percent of workers failed to negotiate for their current job and that 67 percent say they regret that decision. The results mirror those in a recent CareerBuilder survey, which found that 49 percent of the participants simply accepted their first salary offer without question.
The financial repercussions of failing to negotiate are significant. Salary.com compares two examples of employees with the same starting salary offer of $45,000. While the first employee, “Jim,” accepts the offer and receives a 1 percent annual raise, the more savvy employee, “Jane,” negotiates the offer to $50,00, receives a 1 percent raise every year, and negotiates a 4 percent raise every third year. The 45-year lifetime difference in income comes to $1,037,773.
Older employees ages 35 and up are more likely to negotiate (55 percent) than their younger peers ages 18-34 (45 percent). Men are slightly more likely to negotiate than women (54 percent versus 49 percent, respectively), CareerBuilder reports.
For those still hesitant about negotiating an offer, consider this: the odds are in your favor. More than half of hiring managers and HR professionals indicate that they are “willing” to negotiate initial salary offers in the next year, which will be helpful for the employees looking to start from scratch.
For related reading, see Negotiate Your Way to the Top