Salary Negotiation Tips When You Get a New Job Offer

Does this sound like you? You have worked hard with hundreds of hours put into your job search. Now you have finally heard those long sought for worlds, “We want to make you a job offer.” You were excited until you heard the amount the salary offered, 10% less than you wanted. Now you have a sense of dread because you will need to either negotiate or take the offer, both unappetizing choices.

Or perhaps you are lucky enough to have two offers. You really want to take the one from your dream company, but the offer is not as good, and the one item which is a must-have, a flexible schedule, was not even discussed. You could just walk away and take the other offer with higher total compensation and work-from-home opportunities. While you are fortunate to have two offers, you hate having to walk away or negotiate.

The important thing is you can negotiate a job offer and have great results. I was in communications with a job seeker that negotiated, in the middle of the COVID-19 pandemic, an outcome much better than anticipated. The negotiated job offer included a narrowing of a non-compete agreement, enhanced bonus opportunity, and a higher starting salary. Even though you might not feel, during the pandemic, that you can negotiate your starting compensation, you still can and come away with more than first offered.

The Cost of Not Negotiating A New Job Offer

Many people dread the thought of salary negotiation. So much so that many people do not even try. In 2018, less than half of men and only about a third of women attempted to negotiate a better job offer during their last job offer. Of those 35-54, they negotiated only 40% of the time, only 30% of the time when 55 or older.

In a Jobvite survey from 2019, 83% of the respondents said they received higher pay when they did negotiate. Over a career, not negotiating on salary and other compensation could result in hundreds of thousands of dollars in lost earnings. When a person starts at a lower base salary, that means that subsequent raises are based on that lower base salary. Additionally, compensation in the form of bonuses or stock as well at company matches for retirement plans may be made on a percentage of base salary. If you have a lower base salary, these components of total compensation will be smaller as well.

So Why Don’t People Want to Engage in Salary Negotiations?

While many cultures embrace negotiating as a way of life, some do not. Aside from bargaining on the purchase of a home, car, or other large-value items, many people do not get an opportunity to practice negotiating. Therefore, they place a lot of negative feelings around the activity.

Why People Do Not Negotiate

Fear of rejection. What if the other side just says “no” and walks away. Where will I be then? As the adage goes, “A bird in the hand is worth two in the bush.” By the way, in my years in HR, I have never seen an offer rescinded because the candidate negotiated.

Assumptions on what others will accept. A belief that the other side will not think that what you want is reasonable.

Fear of being insulted. What if the salary negotiations results are less than optimal, and I come away feeling offended by the company and the process? How can I work there?

Conflict Avoidance. Negotiations involve asking for something, especially something that they were not initially willing to give. I inherently do not like any sort of conflict and would rather just avoid the whole process.

Salary Negotiations Are Aggressive. While I can admire people that ask for what they want, they come off sometimes as aggressive. I do not want to be known as aggressive, especially at the start of a new position.

Stress. If I negotiate, I will experience stress. Stress is something I want to avoid for my health and emotional well-being. Even if I do not get the best offer, avoiding stress is worth it.

The truth is that you are in a negotiation whether you are actively negotiating or not. If you choose not to negotiate a new job offer, are you okay with a suboptimal outcome? Michael Jordan said it best, “You miss 100% of the shots you don't take.”

So, if you know you should negotiate but are hesitant, how can you overcome your fear? How can you become less intimidated by the process?

How to Prepare to Negotiate a New Job Offer

Driving a car does not mean you just get behind the steering wheel and go. Before you can do that, you need to have learned the laws around driving and have practiced. Similarly, with salary negotiations, you do not just jump into them without any thought or practice. To not feel intimidated, you have to do some upfront work before you even have a salary negotiation conversation.

If an offer is not what you have wanted (or it is okay, but you think you can do better), you do not need to negotiate then and there. I would advise not to do this. Thank the person for the job offer and the positive experience through the recruitment process. Tell the person that you are excited about the job offer and the prospect of working with the company, but you wish to think it over. Ask if you can have a day to get back to them. Most companies will allow you to do this. If they push you for an answer right away, say that you have some questions, but are not in a place where you can talk, and ask if there is a better time later for you to call back. If a company does not allow even this request, it is a red flag, and you should think about whether you want to work for this company.

Research, Research, Research

Before you started your job search, you should have researched the salary range for similar jobs in your area. That research should also have included information about additional compensation such as bonuses, deferred compensation, and even standard vacation programs. If you did not do this, you have to get this information now. You need to see how the job offer compares to the range. Sources to help you with your negotiations would include Glassdoor, Salary.com, and Payscale. You can also use industry salary guides, if available, or even government information. While well-meaning friends and colleagues may offer their opinion, only rely on data from trusted sources.

If you are disappointed in the job offer, it is essential to look at the offer amount and gauge first whether the offer was fair or not. If based on the job duties and location, the offer is below the given range; it is not a market offer. If it is a low-ball offer or a fair but less desirable offer, it is crucial to have this information. With this information, your negotiations will be based on data and not emotions or wishes.

Develop A Decision Tree

You also need to assess all parts of the offer and decide which aspects of the job offer will be most important to you. This may include monetary compensation, but it can also include conference attendance, tuition reimbursement, or work-from-home options. The priorities are going to be personal to your specific situation. You should prioritize what you want to negotiate, from most important down to least important. Just know that an employer may not have any wiggle room for changing such items as medical premium costs or company match, due to legal requirements. That does not mean that you could not negotiate additional compensation to make up for what you consider lacking in the company’s program.  

Here are some aspects of your job offer that you may want to research and assess in addition to starting salary:

• Performance bonus

• Commission plan

• Signing bonus

• Profit-sharing on gainsharing bonuses

• Equity

• Benefits

• Severance

• Relocation

• Job title

• Working conditions like schedule or travel

• Timing of future salary reviews

After deciding the priority items for your job offer negotiations, you can then develop a decision tree. A decision tree includes various actions and results. A decision tree helps you visualize different courses of action you can take. As an example, you may prioritize an enhanced commission structure in your salary negotiation. That would be the first decision. Depending on whether that salary negotiation ends in a positive or negative outcome, you might decide on different next item for negotiations. Having a strategy before you go into a salary negotiation helps you feel more confident.

How will you determine if your negotiations have been successful? Your negotiation may result in many different outcomes. It is best to have in your mind three important indicators: 

What you would like to achieve. This amount may be higher than the data suggests is normal for your circumstance. It is an aspirational goal. Achieving this would have you grinning from ear to ear.

What you think you can reasonably achieve. This is usually higher than was offered but still within reason based on the market data. To get here, you may face trade-offs on multiple facets of the offer.

Your minimal acceptable result. If this result is not achieved, you will walk away from the opportunity.

Practice, Practice, Practice

Now that you know what you want and have a tool for the discussion and assessing the result, it is now time to practice. You need to think through how you might respond to different types of negotiating styles, so you are not caught off guard. You might be dealing with a competitor type, that wants to “best” you in the negotiations or dealing with someone more of a cooperative style, trying to come up with a “win-win” strategy. Be prepared for the words used in these different types of negotiations and your reaction to them. If possible, practice with a family member or friend. Practice, so you are comfortable asking for what you want with no hedging and no apologies.

What to Do During Negotiations Over a New Job Offer

Go into the negotiation, knowing that both you and the employer want to get to a positive outcome. The company has spent a lot of time and effort in the recruiting process. Everyone on the hiring team, from the hiring manager to HR, wants to bring you on board. You are the person that they felt would do the best job. Remember this. It means that you are not powerless in the negotiation. If they cannot come to terms and you walk away, they either have to go with their number two pick, who they felt was less qualified, or start the search again. I can assure you that no one is anxious to do that.

Prepare the Scene

The first thing you should do is make sure that you have a quiet place where you can hold this discussion. Likely this is going to be over the phone, so you may need to leave a noisy house to sit in the car in a quiet parking lot. Get yourself free from all distractions. Take deep breaths. Sit up straight. Smile.

Ask Questions

Once you get either the hiring manager or HR on the phone, thank the person again for the offer. Tell the person that you are excited about joining the team. Then, if you have any outstanding issues about the offer, ask them first. Do you need to understand better the medical insurance? How does the 401 (k) plan work? What are the program rules around tuition reimbursement? Whatever is not clear, ask it now, so you completely understand the entire compensation package.

If you have any outstanding issues about the role expectations, reporting relationships, or the like, ask it at this time. These questions do two things: 1) get answers to questions that will help you assess the total job offer, and 2) it starts the conversation on a less confrontational footing. These should be questions that do not cause you much angst to ask and relatively easy for the person to answer.

Make The Ask

Now is the serious part of the conversation. This is where you say that the job offer is a bit lower than you anticipated based upon your research. Ask if the company will increase the offer. Say that you would be happy to accept the job offer if it is better. This way, you frame it as a win-win for all.

Listen to the words used in the response and the tone. If you get a flat out “no” that is quick out of the person’s mouth, that may be a firm answer. I would then ask how they came up with the offer to at least understand their thought process. If they hire many other people for this role, they may be constrained by what they are currently paying others. Or it could be a union position with fixed pay rates. Listen to their explanation. If you have put together a decision tree, look at other non-monetary forms of compensation that were important to you. Ask about flexibility in those areas.

If you do not get a “no,” you may get a question back, such as what you want. Go back to your decision tree for your most important item and what you would like to achieve. Don’t be surprised if you are asked about how you came up with the amount. That was often the first question I would ask as a Recruiter. If the person did not have reasonable justification, such as bringing additional skills or education, I rarely would agree to the amount. But it was the start of the negotiation. Listen to how the other person is approaching the salary negotiation. Are they looking to win or to compromise? Depending on what the company is willing to offer and how it meets your criteria for success, go down your decision tree. If the company cannot give on base salary, they may be more flexible on a bonus. If a company can’t deliver on better bonus terms, maybe they can offer a signing bonus. Do not negotiate over everything, only what is truly important to you.

The key to success in salary negotiation is to be flexible and to look at the big picture, total compensation, and not just one component.

Playing One Offer Against Another

If you are in the position of having two job offers, congratulations! You have a lot of leverage in your negotiations. You should still ask all your questions first for clarification, but then you want to be honest and say that you have another offer. If this employer is the one preferred, say so. This lets them know that working with you is likely to have a positive outcome for them. They certainly will ask about the other offer, so be prepared to discuss the type of role and the terms of the offer. Do not lie, as you could be asked to provide a copy of a written offer as proof. In this circumstance, be upfront about the terms of a job offer you would need to be able to accept it. Again, have a decision tree and your “what you would like to achieve”, your “what you think you can reasonably achieve”, and your “minimal acceptable result” to guide the conversation.

Conclusion

If you do not negotiate, even in this current economic climate, you may come to regret it. Sometimes your job offer negotiation may not result in any difference in the offer, but you do not know if you do not try. Never, in my long career in HR, have I ever heard of an offer pulled because the person negotiated professionally. In fact, I have seen some puzzlement when a person in a sales, legal, or contract negotiation position, where negotiating is a standard part of the job, did not. So next time you have a new job offer, plan to negotiate. 

For more information about salary negotiations, please read the following blog posts:

Why Leave Money On The Table? Negotiate On Total Compensation

How To Answer The Dreaded Salary Question

Shelley Piedmont is a job search coach. She wants to help job seekers put their best foot forward by providing the tools for a successful job search. If you need career coaching, resume preparation, interview skills assessment, or LinkedIn profile assistance, she can help. Schedule a 15-minute no-obligation consultation.