12 MIN READ
Employers expect you to negotiate a job offer. Many even leave room in the offer to go higher, so if you ask, they can offer it. If you don't know how to negotiate a job offer, read on to see how easy it can be.
Related Article | The Finance Dictionary: Learn the jargon your Finance friends speak!
Why Negotiate a Job Offer
In a study by Mint, results showed that more than 58% of millennials don't negotiate salary. 25% of those studied didn't because they didn't know how to negotiate a salary offer, and 10% didn't because they were afraid of what would happen.
Here's the problem.
Not negotiating a job offer from the start can affect your lifelong earnings. What if you could earn more money than what you start earning? This increases your baseline. If you stay with the company for a while, you might earn an even higher salary.
Think about what happens if you could earn 10% more right off the bat. Most people earn an average 3% raise annually. It will take at least 2 raises to make up for the salary you could have been making from the start.
When you master the negotiation, you show your prospective employer your worth right from the start. You might be taken more seriously and work your way up the ladder even faster when you show your confidence in yourself during the hiring process.
This doesn't mean you should jump into salary negotiation right from the start, though. There is a time and place for it.
Before negotiating salary, prove to the potential employer what you can achieve. Show them why you are meant for the job and then negotiate salary after they give you the job offer. This allows the chance to develop a relationship with the company and the hiring manager.
But, there's a catch.
Don't try to negotiate an employment offer after you've accepted it. Take your time when you're presented with a salary and compensation package. Do your research and ensure it's at least average for the industry in your area. Also, compare it to what you were expecting.
It's best to do a contract negotiation once, maybe twice, but no more. You want to honor the hiring manager's time and your own. Create a plan to negotiate the job offer and have a Plan B if they don't accept it.
Related Article | 15 Highest Paid Jobs for Master’s Students
How to Negotiate a Job Offer
Negotiating a salary offer can initially feel overwhelming, but it can be much easier with these steps.
Research Comparable Jobs' Rates
Before starting the negotiation, know the industry's average salary and compensation package. Salary.com is a great resource to help you understand what people in the same position in your area earn.
You can use the information you gather as a starting point in your negotiations or as justification should you receive pushback. This will give you an idea of where the average salary is, what employees at the higher end earn, and even what bonuses or compensation packages most people get.
One of the best salary negotiation tips you can receive is to prepare yourself for your job search. You might get lucky enough to ask for a signing bonus or higher starting salary and get it. But, you might have to state why you deserve it and present them to your prospective employer.
The last thing you want is to be caught off guard. What if they ask you questions or want to know why you think you deserve a higher salary than what they offered or your current strategy? Don't hesitate to seek the help of a career coach trained in helping young professionals seal the deal.
Think of it like a presentation when you're thinking about what to say when negotiating salary. Have data points ready that prove your past success, what you've done for companies, and how you'd benefit the new company. Think of it as a sales meeting. You want to convince the hiring manager you are worth the pay negotiation.
Don't forget to include the information you found about the average salaries in the area as a part of your salary discussion. Try to hit all the points that would make a hiring manager want to accept what you propose.
Know Your Worth
Sharing information about the average salary in the industry is a start, but also focus on your worth and personal salary history. Yes, what other people in the industry get paid is a starting point, but what do you offer that's above and beyond what other applicants might offer?
Everyone brings different skill sets and values to the table. What makes you unique, and what's it worth? When you're negotiating a job offer, you need to show them why you deserve what you're asking for versus the basic salary they might offer another applicant.
Practice Your Pitch
Make sure with all the preparation you take that you practice your pitch. Say your reasons out loud, and practice how to ask for more money. You might think you have all the ideas in your head, but when it comes to putting them into words, it's easy to stumble over your thoughts.
Practice in front of the mirror, a recording, or even with a friend or family member. Listen carefully for all the necessary points you came up with during your preparation. Hear how it sounds when you state your points and find any weak spots in what you say so you can fix them. Whether you're negotiating salary, work hours, or work-life balance, have your data points carefully laid out so you don't miss anything.
Schedule the Negotiation
You have a couple of options when you make the negotiation. It's best, though, to do it over the phone or in person versus email. With an actual conversation, you'll be better positioned to counter any pushback and still get the salary and benefits you want.
If you've decided to negotiate the job offer, verbal is the best way. Emails and voice mails can come over as unpleasant, rude, or even just ignored. When you talk face-to-face or over the phone, you can show that you are grateful for the employment offer but would like a chance to ask for what you feel you deserve before accepting the new job.
Be Confident, Not Cocky
It's important to sound confident when you are negotiating a job offer. You don't want to come across as cocky or like you deserve nothing less than you're asking, though. Show the employer that you are sure of your skill set and services and that you're worth the amount you're asking them to pay you.
The best way to get a negotiable salary is to back it up with data points from your research. Prove what others get paid for the same job and skill set, and then show that you have those same skills.
If you lack confidence, you leave room for the employer to turn down your negotiations. As you learn how to counter a job offer, keep one thing in mind, keep it simple. Don't say too little, but don't say too much. Give the hiring manager a chance to think about what you've asked and how to respond.
Ask for the Top of Your Range
Shoot for the stars; if they fall short, you'll still get an offer higher than the employer originally suggested. In other words, ask for more money than you think you might get. Choose the top range of what research shows people in your industry and job title get paid.
This leaves room for the hiring manager to say 'no' to your request but to come back with a counteroffer. You might accept the offer they come back with or negotiate the salary again, hoping for something slightly higher.
As you learn how to respond to a job offer, anticipate questions. Don't expect the company to accept your offer negotiation by asking questions.
The questions could be tough too. This is why practicing your spiel is important. The questions could be to size up their competition. They may want to know if you have any other offers or if you're willing to accept and start the position immediately. The answers could play a role in how they answer your salary negotiation.
Related Article | The Finance Dictionary: Learn the jargon your Finance friends speak!
Ask Questions of Your Own
If the employer is unwilling to accept a negotiated job offer, be ready to ask questions yourself. Keep them talking, and get to know where they stand regarding the budget and what they intend for the position.
As you learn how to negotiate salary, you might even ask if there are any other benefits you can negotiate. If a company is tight on its budget but can offer more paid time off, stock options, or other benefits that can sway you, ask for them.
Get Everything in Writing
If you successfully negotiate your job offer, get everything in writing. You can agree to it verbally, but ask them to follow up with a written agreement of what they said they would offer. This holds them to what they stated and doesn't become a he said/she said situation.
Negotiate More than Just Salary
In contract negotiation, don't be afraid to ask for more than just a salary. Of course, everyone wants to be paid as much as possible, but a healthy compensation package can be a good benefit too.
Think about an annual bonus, stock options, tuition reimbursement, vacation time, or even the option to work remotely. You can focus on how to ask for a higher starting salary, but don't overlook the other benefits a company may offer.
Don't Be Afraid to Refuse the Offer
Knowing how to decline a job offer due to salary is important too. It's okay to stick to your guns. If a company can't meet your demands and won't budge, walk away. If your demands are within the average for the industry, you'll likely find another company that will accept your negotiations. Don't settle.
Offer Negotiation Examples
If you wonder how to start the conversation to negotiate salary, here is a salary negotiation example for email, a phone conversation, and in person.
Start your email by thanking your potential boss for the job offer. Show your gratitude for taking the time to talk to you and offer you the job. Next, discuss your need for a higher salary and explain why you feel you deserve them. Share as many statistics and data points as you can that prove you are worthy of the higher salary.
End the email with a warm closing that includes a statement sharing with the employer how you plan to help their company succeed, just like you helped your previous employers.
Remember, when you negotiate salary via email, there's no room for back and forth or to catch the reader's reaction to the request. You may want to follow up with a phone call to personalize it even more.
When you call your potential employer and negotiate a salary, you have a chance for some back and forth. If the person on the other end seems hesitant, you can lead with more data points or reasons why you feel you deserve the higher salary.
You also allow the employer to ask questions or state their reasons if they have to turn down your request. It's less of an open and shut door when you have the conversation over the phone (or in person).
You'll start the conversation the same way, expressing gratitude for the opportunity and stating your reasons for the offer negotiation.
Related Article | Implications for Immigrant Workers Working Two Full-Time Remote Jobs
Negotiating salary in person is like negotiating over the phone, except you are in front of the hiring manager, not hiding behind a phone. It can be a little more nerve-wracking to handle it in person, but if you're confident and have done your legwork, you may have a better chance of getting it approved.
Negotiating Job Offer FAQ
Do Employers Expect You to Negotiate?
According to Salary.com, 84% of employers expect you to negotiate a job offer. If you don't negotiate, you're leaving money on the table. Employers often leave room in the salary so they can accept your negotiations without going over their budget.
Should You Always Accept the First Job Offer?
You can accept the first job offer if it meets your guidelines. Have a specific salary and compensation package in mind. If a company offers it, you can feel confident accepting it. Don't be afraid to negotiate if it's not what you want.
How Do You Respond to a Low Salary Offer Letter?
Knowing how to negotiate a job offer is important if you get a low-salary offer letter. Now, if it's too low, you may want to know how to decline a job offer due to salary. But if you think the hiring managers are reasonable and there's a chance you can get them to change their minds, try it.
Can You Lose a Job Offer by Negotiating Salary?
It's always a gamble negotiating salary. But you owe yourself to ask for what you think you're worth. As long as your negotiations are within reason for the industry, there's always going to be another offer elsewhere if you lose a job offer for negotiating.
How Many Times Should You Counter-Offer Salary?
It's best to keep your contract negotiations to one or two times. If you bother the employer too often, they may turn you down just because they don't have time to deal with it. That's why knowing how to negotiate a salary offer the first time is important.
How to Negotiate Salary After Job Offer: The Bottom Line
Knowing how to negotiate a job offer is a life skill. You should feel comfortable asking for what you deserve each time you change jobs. Even if it costs you the job, you'll know that you stood up for what you think you're worth and find another job willing to pay you what you should be paid.