Not negotiating the job offer puts you at a disadvantage for the duration of your career in a new company. There’s a snowball effect because your performance raises and after-promotion salary are all affected by what you accept. It also affects the next job offers you get when you move companies.
There’s no question that everyone wants a higher base salary, the problem is it’s not exactly clear how to negotiate a salary after a job offer. You can’t just blurt out a number and expect your future employer to agree with you.
Fear of having the job offer rescinded doesn’t help, either.
What you need is a strategy and the right mindset. In this tutorial, you'll lean how to negotiate a higher salary and additional benefits during a job offer negotiation. This process starts with researching information to back up your request for a higher salary.
Finding the Average Salary and Compensation Package for Your Position
Assuming the job offer you received is lower than the market average will never work. You need data to prove your claims.
1. Salary Databases and Other Online Sources
Websites like PayScale and Glassdoor have salary estimates for just about any position. Some of these sites allow users to filter the information based on location. You can also go to the Bureau of Labor Statistics, which provides a comprehensive database of salary information for different jobs.
Below are different sources for salary research.
Other Salary Comparison Websites
Another way to find the average salary is to look for job ads that display salary information on different job sites.
2. Dig Deep to Learn All About the Company
Find out if the company has job grades or bands, and what band your target position is in. If they have a job grade system, you have to accept that it’s almost impossible to go above their imposed upper limit.
The salary also differs based on the company’s size and industry. A mom and pop shop will have a smaller budget compared to a multinational conglomerate, and it’s the same case if you compare a Wall Street firm with a local restaurant.
Investigate the benefits and perks they offer, too.
3. Ask Other Employees in Similar Positions
Ask your friends, family, professors, former colleagues, and mentors to give you feedback on the job offer you got. Ask them if it’s fair based on what they receive. People are, in general, uncomfortable talking about their income, but you’ll be surprised how open some friends are.
If you don’t want to ask directly, give them an estimate of the job offer, then ask if it’s in-line with industry standards for someone with your experience.
4. Gather Salary Info From Unions
Unions exist to protect the welfare of their members, that’s why they also keep information about acceptable salary ranges for different jobs in your industry.
5. Compare Cost of Living of Your Location
Compensation is also affected by the job’s location due to cost of living and talent demand. Big cities like New York and Silicon Valley have higher compensation, as opposed to small rural towns.
How to Negotiate Salary Perks
A 2015 study from the BLS states that the remaining 30% of compensation packages is comprised of benefits.
So focusing solely on a job offer’s base pay can lead to as much as a 30% loss on your part. This is also your best bet of getting a higher compensation package overall, if the employer’s base pay has a small wiggle room.
- More vacation time
- Relocation allowance (if you’re moving to another city or State)
- Signing bonus
- Commuting allowance
- Expense account
- Performance-based bonuses
Also, training and professional development programs.
Other Perks to Consider
These are non-negotiable perks, because negotiating them involves more decision makers and wider company changes. All of these benefits are still worth considering though, because they can affect your expenses and overall enjoyment of the company.
- Health insurance
- Added insurance perks, such as a health savings account, or coverage for your kids
- Wellness programs, such as gym membership or bonus for getting a flu shot
- Education subsidy
- 401(K) contributions
If you’re creative enough, you can also negotiate certain aspects of the job. For instance, you can negotiate access to exciting projects a tad outside your current description.
The Importance of Choosing the Right Time to Negotiate
Timing is critical when negotiating a new job offer. Negotiating too early gives the impression that you’re arrogant and selfish.
Anna Runyan, Founder of Classy Career Girl, explains, “You don’t want to send a signal that you only care how much you can get. So always wait for the employer to make an offer, and never be the one to start the discussion about salary.”
This is a basic rule of negotiation, you have more power when the company has narrowed down their prospects to just one candidate—you. Sure, they probably have a second choice, but they prefer you more than the second pick, and a lot more than the other candidates. That’s leverage you can use.
You don’t have this leverage during the interview process.
When It’s Too Late to Negotiate
You can’t take your word back after you agreed to the job offer. Even if you realize the commuting expenses are terrible, and the money isn’t enough to pay your loans, your chances of winning that negotiation are slim to none.
The employer, the HR manager, and all your co-workers will think you’re either not serious about the job, or a total diva. Either reputation isn’t appealing when you’re starting out with a new company.
That’s why it’s important to ask for a day or two to consider the job offer. Don’t give in to pressure, even if the employer says they want someone to start right away.
How to Negotiate a Higher Starting Salary
1. Know That the Offer Isn’t Final
This isn’t one of the steps on how to negotiate salary, but it’s important that you have this mindset. Don’t let your fear of negotiating or talking about money stop you from getting what you deserve, and what you will work hard for during your career with that company.
Employers expect you to know how to ask for more money in a job offer. For some jobs, such as sales and business development, not negotiating shows a certain degree of incompetence.
2. Show Enthusiasm
But don’t be desperate. Always show that you’re excited about the job and remain positive even if the base offer isn’t what you expected.
Show them you want the job by starting the negotiation with positive phrases like, “I’m excited to work with your team” or “I’m eager to start working and I know that I’d make a good contribution to the company.”
Complaining about the salary right off the bat shows disregard for the opportunity they gave you, and that you’re difficult to work with.
3. Pick a Range instead of a Specific Number
“Most people will low-ball themselves at the first opportunity. They think they’re being humble, when in reality they could have made more money,” says Lisa Rangel of Chameleon Resumes.
To fight this, mention a pay range instead of giving an exact number so you have a cushion.
Start the lower limit of the pay range at 5% higher than your current salary if you’re moving to a similar position. This way, you won’t be severely affected if, for some reason, you don’t get an increase in your first two years at the company. Start your pay range at 8% to 10% higher than your current salary if you’re accepting a job for a higher role.
Of course, the above strategy assumes that your current salary is at par with the market pay for your job, based on location and other factors. If it isn’t, you have to consider the going rate for your salary first.
4. Aim Higher Within Reason
Your salary demands should always be within reason.
Rangel explains, “Applicants need to accept a certain level of reality when negotiating salaries. There’s a big difference between asking for a 10% increase and asking for some extra zeroes.”
Your experience plays a big role in the negotiation process, too. If you’re new to the workforce or the job itself, you will definitely earn less than someone doing the job for years. Fresh graduates for saturated industries will have less negotiating leverage than applicants in booming markets.
5. Explain the Why and How of Your Request
Every employer knows that you’ll want a fair job offer, but you also need to show genuine care for the job and the company’s interest. So always explain why you want a higher salary, and then back it up with why you think you’re worth that extra money.
Higher Salary Example
“I would like to explore a slightly higher salary of $65,000 instead of the original $55,000 given the results I’ve achieved for my former employers, which we talked about during the interviews.”
Non-Monetary Negotiation Example
“Given my pending relocation to work here, I would like to start on August 25 instead of the 18th. That would give me extra time to finish my move-in, so I can start the job totally focused on my work.”
6. Focus on the ‘We’
Negotiation isn’t a you v.s. them battle. You have to be mindful of how you’re coming off to the recruiter or hiring manager. Smile and always be pleasant and polite, even if the discussion isn’t going your way. You don’t want them to feel as if they’re dealing with a spoiled kid asking for more candy.
Where possible, use phrases like “I understand” or “I see where you’re coming from.” The way you talk should show that you empathize with the employer and understand whatever hesitations they have about giving you a higher salary.
7. Embrace the Awkward Pauses
Silence is uncomfortable for lots of people, especially during negotiations. But what you consider as awkward pauses are only natural breaks in the communication process. This is the time when the other party is digesting what you just said, or is in the process of formulating a response.
Keep quiet and wait for the HR manager to talk after you’ve said your piece. Desperately trying to fill the silence shows lack of confidence. It also makes you prone to saying something you don’t intend to.
8. Know When to Stop
Employers expect you to counter offer, but nobody wants a haggler who will negotiate everything down to the last cent.
Let’s say you want $65,000 but the best they can do is $58,000. Don’t go back with another counter offer of $60,000 as that might just annoy the HR manager you’re dealing with. If the budget allows for $60,000, they would have already given it to you.
What you can do now is negotiate other perks to make up the difference, such as more vacation time or an early performance review. Again, the key is to balance what you want and the employer’s interests.
You want to be ready to handle common salary negotiation scenarios, be ready with counter offers, and responses that will help you secure more income for your new job. Use these scripts to prepare for your phone or in-person salary negotiation:
1. A Counter Offer
“Thank you for this opportunity. I’m excited to start working with your team, however, I hope we can explore the possibility of $65,000. I think that amount better reflects the job scope of the position and my previous experience in this field.”
2. “We don’t have the budget for that” or “That’s the maximum we offer for this position”
“I totally understand that you have a specific budget for this position, and I want to work with you to come up with a solution that benefits us both. According to my research for this position on (website name), the typical salary range for someone with my qualifications is closer to $70,000 instead of $60,000. Can we meet halfway?”
3. If You Have an Offer From Another Company
“Thank you for this job offer. As you know, however, I have also applied to other companies and have just received another offer. But as I love the company and the work you do, I would prefer to work here if you can match their offer of $80,000”
4. “The budget is fixed”
“I understand that $55,000 is the best you can offer for the base salary. Given my experience and solid track record, I hope you can give me an extra $5,000 as a performance based bonus to make up for the difference.”
If they don’t agree to the extra performance bonus, try asking for extra vacation days, training allowance, or another benefit.
4. “Your salary history shows this offer is already an increase for you”
“Yes, I made less at my last job. But the additional training and experienced I’ve gained during that period warrants an increase. What I’m paid right now is also below the market rate, and that’s the number one reason I’m in the market for a new job.”
5. “You would be overpaid compared to our other employees”
“I’m eager to start working with your team. But the research I’ve done on comparable living costs between Florida and San Francisco shows that a base of $135,000 is the market value for someone with my experience. Accepting an offer of $95,000 would also drastically alter my living situation due to the cost of living.”
Be Prepared to Walk Away
You have to decide whether you’re prepared to walk away before the negotiation even starts. Knowing you’re ready to decline the offer will give you a sense of confidence, so you don’t appear desperate.
Having this mindset doesn’t mean you have no power over the negotiation outcome. It just means you accept that some things are beyond your control. The best you can do is practice how to ask for more money in a job offer way before the negotiation starts.
You can also try negotiating via email:
Discover more career tutorials on Envato Tuts+, that will help you secure a new job, earn more income, and level up your career.