I would most certainly never show my cards first in a salary scenario. If you say £500 and the guy say he was looking at £200 you have left yourself open to 2 things (1 he will tell you to go away or you will have to come much closer to his evaluation 2.He knows you will be on the lookout for higher paying work). It's like playing cards, show your hand first and you are almost always on the backfoot.
What? What do you mean by cards? The factors involved here are the amount/difficulty of the work required (which the hiring person should already know), the skill of the potential hire (which that potential hire should play up), the alternatives to the potential hire that the hiring person has available, and how much those alternatives will demand for compensation. A compensation number links these together.
Starting with a high bid tells the hiring person that you are a valuable worker, and that you are confident enough in your assessment of the work to be done and your own skill to command a high price. You bring to the table a sense of value for the hiring person to maybe be able to grab. You can present yourself as a particularly good prospect who can bestow your singular talents for effects that the hirer won't be able to achieve with other applicants. You can negotiate from a position of strength, where the operative question is whether or not they are willing to pay for you-- not how little they can get away with paying. The potential employer will have to justify why you are worth less than you say to get you to agree to a much lower number.
Letting the hirer offer a number forces them to estimate your value as an applicant based on little information, which is therefore not especially likely to be fair or accurate, especially since the hirer will prefer a cheap deal in this case. Then, you immediately disagree with the number the hirer offers, which is pretty bad if the hirer was making a fair offer (in his or her own view). It increases the sentiment that the applicant is one of many cogs to be chosen from a sea of similar options. The only distinction such a cog can offer is how little they'll accept. A person negotiating from here will have to justify why they are worth anything more than the employer's lowest estimate that they think might work-- that's a weak position. And they'll be starting from the lowest possible starting point, therefore having to climb farther to any result.
Besides, you're assuming that the hirer is not very flexible in what they're willing to offer. If they'll offer $200 to start the discussion, but would be willing to pay up to $800, you'll have a hard time getting there starting at their offer, even though they will accept a higher bid. But if your initial offer is $800, the employer might counter with $400, which is a much better floor to work with than the $200 they might have offered cold.
But anyone can offer fantasy numbers and situations that will support their own position. My point is that I don't see how a potential employee is
better off negotiating up from the absolute floor as opposed to down from a higher number, unless that employee offers a ridiculous number that the hirer won't accept even as a ceiling that will be countered immediately. And in this latter situation, the potential employee clearly can't estimate the value of the work properly, and so is not likely to be an effective negotiator in any event.
This is a situation where I think that analogies and metaphors are particularly dangerous. Negotiating isn't like playing cards, where there is an external factor that has a fixed statistical likelihood of being a winning scenario for each party, which all sides bluff around. In that situation, going last is preferrable because you can assess that factor based on the behavior of other players. And if the game happens to be blackjack, that's a pretty thin advantage.
This isn't the case with compensation negotiations. You lose nothing and gain a lot by demonstrating that you are valuable, which you do both with your CV and the value that you place on your labor. There are no objective external factors that enforce results on the negotiation, only how far each side can make the other go. The ultimate card for either side to play is to walk away, which will force the other side to adjust dramatically in order to salvage a deal.
If the goal is to land the job at any price, taking a weaker position where the other side sets the starting number and barely moving around it will be more effective. But if you're looking to be reasonably compensated (in your own judgement), the hiring person's lowest possible is irrelevant. If they won't budge but you still think that the work is worth that pay, then that's where you'll end up. If the final offer is less than you think that the work is worth, you should walk away, unless you're desperate.
The idea that the employer will think that you're looking for higher pay elsewhere is irrelevant as well; if the applicant takes the job, they'll be under contract and unable to move away. But the idea that the applicant can get better pay elsewhere is the major factor that can drive their compensation up.
It's way easier to negotiate down to 150 pounds/day from 200 than up from 100[/quote] What if he says £100, you can then say £200 and then it is much easier to agree at the middle £150. You also know that if you are expecting £500 and he says £100 you can then just let him know that you are not in his price bracket and exit the negotiations, not wasting his or your time. Or you can turn it around agree with his fee and state you want a payment on completion. Letting him make the first move allows you much more room to get what you want.
There's an element of playing it as you see it. If you think you need to make the first move and the situation dictates it then make the first move. Generally I'd never recommend it and I have been involved in large project negotiations/strategy.
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Why would a hiring person necessarily be unwilling to move up to $500? Or at least closer to that than $100? If you don't negotiate it, you'll never know. If you do try to get a better rate, you still have the option of walking away if the offer doesn't go high enough-- but you very well might end up with a job at a level of compensation you find acceptable.
You are correct that different situations will call for different strategies. Letting the hirer make the first move lets you see what they think the very lowest pay that someone might accept is (or even a bit below that), which can be useful information. But I'm having a hard time seeing why that is generally a superior approach to making a reasonable estimation of your own worth and then leveraging that worth against the employer's needs and means. I don't know what you do with negotiation, what the stakes have been, the skill of yourself or the opposing groups, or how good the results you obtained were compared with the maximum you might have received, so I'm not in a position to judge your negotiating ability, regardless of your role or experience in such matters.
As has already been mentioned, the OP is at a disadvantage in several areas already: a new graduate with little/no industry experience, applying to a place that mysteriously let go their previous workers, a poor job market, and an offer of career experience with material that is nearly obsolete. A reasonable offer for the OP to make is not going to be especially high, particularly as the employer is obviously looking for budget work rather than a high-end expert. The OP will likely have similarly attractive options in the future, as mentioned by Antheus, which makes the value of this particular job even lower. There's little for the OP to gain from this job other than some money in the near term, and even then it could easily be a bad bargain for him unless it's a solid amount. There's no reason to cede the ability to set the terms of the negotiation by default, because the risk of not getting this position is not so serious.