Business professors share their insights into why talking money before being the top candidate for a job could turn hiring companies off.
Let’s face it, anyone looking for a job or any freelancer pitching their services to a new client cannot tip-toe around the subject of money forever. But when you bring it up can make or break a prospective opportunity for the job or project seeker. That’s according to a US business management professor specialising in human resources.
Anthony Nyberg, a professor at the University of South Carolina’s Darla Moore School of Business explains why this is the case in a recent Business Insider report, even when it can seem counterproductive to the hiring practice as no one wants to waste their time going for a new job if the pay is not up to scratch.
Patience and restraint when it comes to discussing pay is the upshot for successful candidates according to Nyberg since you have leverage only once a company decides it wants to hire you.
What is motivation purity bias?
The reason hiring managers feel this way comes down to motivation purity bias, which is explained in a University of Maryland research report.
In the research, published in the Academy of Management Journal, Maryland Smith management professor Rellie Derfler-Rozin and co-author Marko Pitesa, of Singapore Management University, the academics found strong evidence that hiring managers are biased against job candidates who reveal interest in things like pay and benefits.
But, according to the report, they said being motivated by both the work itself (known as intrinsic motivation) and other factors like high pay, flexibility, vacation time and family leave policies (extrinsic motivation), is not only common but is actually better for both organizations and employees.
“Both motivations enhance performance – it’s actually irrational for an organization to not hire someone because they are motivated by things other than the work itself,” said Derfler-Rozin. “Both motivations can and should be high, and there is robust evidence from previous research to suggest that together they strengthen each other and increase productivity.”
Unfortunately, she said, organisations don’t see it that way when hiring. And because of this bias, they are passing over many potentially great candidates.
Individuals should always be careful what they ask about or show interest in during an interview. Derfler-Rozin said the research bolsters what she teaches MBAs about negotiation: “I always say don’t talk about salary while you’re interviewing. Only once you have an offer can you bring that up.”
Nyberg puts the salary or fee pitch into perspective, likening it to a first or even second date: “Wait till they’ve fallen in love with you before you start talking about how many children you want to have.”
Client due diligence: what to ask before talking money
Unlike a salaried employee, as a freelancer, your time is money since you will have other clients to look after and expenses to pay out of your own pocket. While a freelancer may feel compelled to ask about a project’s fee right away, there may be a very good reason to hold off asking until you get all the facts. When the hiring company reveals all the work and skills involved and any room for amends, changes or additional tasks, that time can start to add up. That can be used to your advantage.
- Show your enthusiasm for your work and the company you are hoping to work with by doing your homework on them.
- How do your skill set and portfolio match their objectives? Show how your portfolio is aligned with the prospective client’s goals.
- Ask about how they have shared and collaborated information and project briefs with freelancers in the past. If they haven’t worked with freelancers before then this is your opportunity to guide them on how things could get done more efficiently without coming over as patronising. You have that experience from other client projects. Your goal here is to make the job easier for all parties involved and to get them what they want as efficiently as possible because you have other clients to look after (they don’t need to be reminded of this though!).
- Will you need more hands on deck? If you are sussing that a new client will be time intensive, then it may be wise to consider taking on another freelancer for the project or to handle other areas of your business, such as social media marketing, website updating or taking on some tasks with a pre-existing client or project. Just be sure your client is aware that another person will also be taking care of their account along with you. Do the introductions and make the client comfortable with the knowledge that this person has their best interests in mind. Of course, you will need to have a contract with this freelancer to protect your own business reputation. Be sure to see all their work before sending over to a client and keep tabs on that client yourself to make sure things are progressing as they should. All emails must be copied to you!
- Know your worth as a freelancer. After doing your pre and post-meeting due diligence on a new client or project, then you have more in your arsenal to negotiate about money when they make an offer that they would like to work with you.
- If a client shows any signs of being cautious about fees and your payment terms, then a contract can be drafted about getting paid in advance and in chunks following delivery at different steps of the project. What you have to remember is that you are not in a position to give a client credit for anything really over 15 days after delivery. Seven days is a reasonable offer. Also, if there are any amends that are requested that go beyond the brief, then those have to be additional costs to the customer/client. These should be factored in before you start working with them; as a day rate, for example.