Anchoring in Salary Negotiations
The first number mentioned in a negotiation tends to shape the outcome. Here is how anchoring works in pay talks.
By Iris Penhaligon | Sep 2, 2026 | 5 min
Anchoring is the tendency to rely too heavily on the first piece of information offered. In negotiations, the first number on the table often pulls the final agreement toward it.
Salary discussions are a common example.
I How anchors work in pay
If an employer opens with a low figure, later offers may feel generous by comparison even if they are below market. If a candidate opens high (but credibly), it can shift the range of discussion upward.
II Research your range
- — Salary surveys and job adverts
- — Industry and professional bodies
- — Pay transparency data where published
- — Conversations with peers
III Anchoring tactics
Some negotiators suggest giving a range with your target near the bottom. Others suggest letting the employer name a figure first. Which works best depends on context and how well-informed both sides are.
IV Beyond salary
Total compensation includes pension contributions, bonuses, flexible working, and leave. See our guide to the anchoring effect for more on the psychology.
This is general educational information about economics, not financial, investment, or tax advice. Consult a qualified, licensed professional before making financial decisions.
Further reading
- 1. Why Prices End in .99
- 2. Why Companies Bundle Products Together
- 3. Surge Pricing: How Ride-Hailing Sets Prices in Real Time