Afraid to negotiate the salary on your new job offer? Research says it’s not as risky as you think—here’s why

Navigating the job market often feels like a rollercoaster, filled with thrilling highs and nerve-wracking lows. After enduring the exhaustive application process, receiving that coveted job offer should feel like the pinnacle of success. Instead, the next hurdle looms large: negotiation. Torn between the excitement of landing a new job and the daunting task of negotiating your worth, the fear of asking for too much and risking the entire offer is palpable. Ultimately, many end up settling for less than they deserve, afraid of losing the opportunity altogether.

But is this fear justified? Not according to recent research by Einav Hart, an assistant professor of management at George Mason University's Donald G. Costello College of Business. Hart’s study, published in Organisational Behavior and Human Decision Processes, suggests that the dreaded outcome of having a job offer rescinded due to negotiation is far less common than most candidates think.

Co-authored by Julia Bear of Stony Brook University and Zhiying (Bella) Ren of the University of Pennsylvania, the research encompassed seven studies involving over 3,000 participants.

The initial phase involved surveys with job candidates, hiring managers and seasoned professionals. The results showed a stark contrast: while candidates believed that negotiating would likely result in losing the offer, hiring managers viewed the scenario differently. On average, managers had made 26.9 job offers in their careers, rescinding only 1.73 following negotiations.

Subsequent studies, using both face-to-face and online negotiation scenarios, revealed a shift in perception when participants were assigned roles as either “job candidates” or “hiring managers”. This role-playing, with real money on the line based on the outcome of the negotiations, altered their views on the risks involved.
Two psychological mechanisms were identified as key to understanding why candidates overestimate the risks of negotiation: zero-sum perceptions and power perceptions. Zero-sum perceptions involve the belief that negotiation is a fixed pie where one's gain is another's loss. Power perceptions relate to how much influence candidates believe they have in the negotiation process. Fearing the worst, nearly half of the candidates chose not to negotiate at all.

The studies found that candidates generally viewed negotiations as more adversarial and were less optimistic about their influence compared to “managers”. This competitive mindset likely contributes to the reluctance to negotiate, leading to missed opportunities.

Hart points out: “Negotiating is not just zero-sum. Besides negotiating salary, maybe you care more about teleworking than a small signing bonus. The hiring manager might really appreciate the savings and be flexible about how often you come into the office. Thus, this negotiation (and many others) can have a win-win, mutually beneficial solution.”
When candidates were encouraged to see negotiations as potential win-win situations, they were less fearful of losing the offer and more inclined to negotiate. Similarly, those who felt they had more negotiating power were less worried about jeopardising the deal. Yet, even with these reassurances, candidates still overestimated the risk.

Hart’s earlier research also highlights the concept of ‘Economic Relevance of Relational Outcomes’ (ERRO), which underscores the long-term financial benefits of maintaining strong relationships over short-term gains. Hart explains: “Consider negotiating for a babysitter's rate. What use is negotiating a great deal on the rate if the babysitter feels bullied in the negotiation and is not excited to take care of your kids?”

While negotiating a job offer is undoubtedly challenging and carries some risk, Hart's research indicates that the fear of losing an offer is often exaggerated. By approaching negotiations thoughtfully and maintaining good relationships, candidates can achieve better outcomes without undue risk.