Even in lucrative fields, candidates leave money on the table by taking the first offer<\/p>\n
Job candidates who negotiate their compensation prior to hiring usually walk away with noticeably higher salaries, better benefits or both, according to a long-established consensus of r<\/a>esearch<\/a>. Yet well over<\/a> half<\/a> of job seekers still just accept the initial offer.\u00a0<\/p>\n A working paper<\/a> by Harvard\u2019s Zoe B. Cullen, Brown\u2019s Bobak Pakzad-Hurson and UCLA Anderson\u2019s Ricardo Perez-Truglia suggests a simple way to help get over this reluctance to negotiate the terms of our livelihoods. Giving candidates some data about the normalcy and high success rate of compensation negotiations often encourages them to make counteroffers. And they collect significantly better compensation as a result.\u00a0<\/p>\n The researchers recruited about 3,858 tech job seekers on levels.fyi to participate in separate experiments between May 25, 2023, and Feb.10, 2025. The sample averaged 31 years in age; seven years\u2019 work experience; and annual compensation between $217,000 and $221,000. About 20% were women. Each participant was initially asked about past experience and beliefs around salary negotiations.<\/p>\n One of the treatments, called the encouragement treatment, presented subjects with a simple message nudging them to negotiate the terms of future offers. The message included advice such as \u201ccompanies expect you to negotiate\u201d and \u201cdon\u2019t feel guilty about negotiating.\u201d It also provided factual information from a survey conducted by Fidelity Investments. About 42% of job candidates counter initial offers, the message read, and about 85% of them got at least some of what they asked for. Finally, the message explained how money left on the table when a new offer is not negotiated significantly depresses pay over the course of a career.<\/p>\n $27,000 a Year for the Taking<\/strong><\/p>\n The group was surveyed again some months later. By then, about 82% (1,336 participants in this \u201cencouragement\u201d treatment group) had received at least one job offer. Some 61% of those countered their initial offer, compared with 54% of a control group that did not read the message. The individuals who countered experienced an average increase in compensation terms of about 12.45%. For the study\u2019s sample, that percentage gain equates to an average $27,000 annually over the initial offer.\u00a0<\/p>\n Returns to these negotiations likely would have been higher if the tech job market had been stronger, the researchers suggest. Tech job postings were just beginning to decline when participants completed the surveys.<\/p>\n Should You Be Afraid to Counter?<\/strong><\/p>\n The study notes that some participants explicitly expressed fears of backlash, such as losing a job offer by trying to negotiate more. A few subjects had already experienced it. About 40% of offers in the sample were made verbally, \u201callowing employers to withhold written offers without formally retracting them\u201d if they choose, the researchers note. The study argues that some individuals refrain from negotiating because they perceive the risks to be much higher than they actually are.<\/p>\n The U.S. job market is less robust today than it was during the study period \u2014 especially in the tech sector \u2014 and there are reports of employers playing hardball. As far back as May 2025, recruiters noticed a rise in employers characterizing their first offer as \u201cbest and final\u201d to stave off negotiations, according to reporting by The Wall Street Journal<\/a>. In the past, recruiters considered that practice highly unusual. The trend coincided with a large rise in the percentage of recent hires who took the first offer without negotiating.<\/p>\n