The Generational Divide of Salary Negotiations

April 12, 2019
Author: Tyran Saffold Jr

Many job postings indicate that their salary offering is negotiable. Astoundingly, a salary negotiation survey revealed that, out of 500,000 job searchers, 64 percent took the first salary offer that was presented. There are many people that sidestep the opportunity to negotiate and, over a lifetime, end up leaving thousands, and sometimes millions, of unclaimed dollars on the table.

Salary Negotiation

Record low unemployment creates a tight labor market, so salary leverage now rests with employees, but is anyone taking advantage?

“I tell my graduate students that by not negotiating their job at the beginning of their career, they’re (losing) anywhere between $1 million and $1.5 million in earnings over their lifetime,” says economist Linda Babcock of Cernegie Mellon University in an interview with NPR.

Generational Divide of Salary Negotiation

In younger generations, like Gen Z for example, there may be a hint of excitement as they accept their first jobs out of college. On the other hand, baby boomers, who are confident in their talents and abilities, are more likely to stand firm in their expectations and the numbers provide insight.

A survey from Robert Half, a nationwide staffing firm, showed that 84 percent of Gen Z workers accepted the first salary they were offered, while 74 percent of Millennials and 59 percent of Gen X and baby boomers, respectively, accepted their first offer. For newly minted HR and hiring managers, this provides insight into who may or may not accept initial offers. For HR management, this also has the potential to add days to the almighty 'time to hire' metric.

Gender Separation and Confidence

When comparing genders, 46 percent of men negotiated a salary, compared to 34 percent of women. Considering the current gender pay gap between men and women, one factor for the wage separation could rest in the confidence that each gender has during the beginning stages of the hiring process.

The level of comfort also has much to do with whether people are willing to negotiate their salaries in general. Over half (54 percent) of workers felt comfortable when negotiating pay while slightly less than half (49 percent) said that they would rather avoid the conversation altogether.

Big City Negotiators

Out of the 2,700 workers surveyed by Robert Half, 55 percent of people who said they would negotiate, resided in New York City and 51 percent resided in Dallas, ranking first and second on the list, respectively. Those in large metros appear to show more confidence and are less willing to settle, knowing that there are more employment options available.

Those residing in smaller metros, in comparison, were least likely to negotiate for higher pay. For example, Indianapolis is last on the list of cities with citizens least likely to negotiate salaries. That city reported 24 percent of people engaging in concession talks, while Minneapolis, another smaller metro, was only marginally ahead at 26 percent.

The Salary Outcome

Paul McDonald, senior executive director at Robert Half, advises job seekers to avoid negotiating any part of the compensation package until after the formal offer is received. Secondly, he warned against going into a concession without practicing the conversation with a trusted friend or mentor. Preparation is key and could dramatically impact the lifetime earnings trajectory of a worker. This holds true for hiring and HR managers as well.
Negotiation preparation is key. To mitigate this and to provide transparency, some companies have gone to listing salary ranges within job postings. This lessens the salary stress on both sides potentially leading to happier hires who don't go through an entire hiring process to find out the salary expectations are misaligned.