The very idea of negotiating a job offer makes most job candidates uncomfortable and anxious and there’s no doubt that it’s intimidating. Unemployed candidates are especially afraid to negotiate even though they shouldn’t be. But as you join a company is the absolute best time to maximize your long term earning potential, so it’s not the time to be shy.
Even though 45 percent of employers are willing to negotiate salaries for initial job offers, 49 percent of candidates accept the first offer given to them, according to a survey by Harris Interactive on behalf of CareerBuilder.
There’s an important balance to be struck here. Although you need to be assertive, you are also negotiating with people that you will ultimately work with so it’s a process that needs to be handled with grace and class.
As an executive recruiter, I negotiate job offers on behalf of clients every day, and the first thing to remember is that you don’t have to respond right away. In fact, you shouldn’t. Whenever you receive a job offer you should thank the employer, express your desire to work with them and tell them that you’ll look over the terms of the offer and get back to them within 48 hours.
Then follow these steps for how to negotiate job offers to get the best possible package.
How to Negotiate a Job Offer Steps
Figure Out How Much Leverage You Have
Before you negotiate, you need to assess how much negotiating power you actually have. The employer considered many applicants before extending you an offer so they are absolutely invested in closing the deal. But your ability to negotiate a job offer also depends on how difficult it would be to replace you. How long were they trying to fill the position for? How specialized is the skill set? The more difficult you would be to replace, the more leverage you have.
Research the Market and the Company
Negotiating only works if you make reasonable demands. Research the industry and estimate the average salary and bonus for someone in your position. Then do some digging about the company and try to ascertain whether their pay is generally below average, average or above average. Depending on how much leverage you feel that you have, decide if you want to push for a number at the top of the range or if you should aim somewhere around the average.
Know What Salary You Want and What You’re Willing to Negotiate To
Decide what you realistically want to achieve in your job offer negotiations. This is what you are going to ask for. But you also have to be prepared for the employer to counter or even refuse to negotiate. In that case, you need to know what you’re willing to accept. This is your bottom line and the number at which you’ll walk away if the employer doesn’t agree.
Don’t Just Focus on Salary
Some companies simply won’t negotiate salary. But salary isn’t the only thing to be negotiated. You can get a huge amount of financial and personal benefit from opening the negotiation up to include items most people accept as standard. Bonuses, vacation days, flexibility to work from home, relocation expenses, the cost of mobile devices, benefits, stock options, education reimbursement and more are all game for negotiation. Consider all of these items and put together a set of reasonable requests. A good compromise when a company won’t negotiate salary is also negotiating a performance and compensation review at 6 months.
Draft a Proposal
Ideally you should negotiate a job offer in person or at the very least over the phone. But it’s also important to have a proposal in writing. This should have a brief explanation of why you are worth what you are asking for as well as a list of the terms you are proposing; the document can be provided in person or via email following a call. It’s much easier for a company to sign off on the job offer when all of the terms can be easily reviewed. Make sure that the proposal is comprehensive. You don’t want to come back with additional demands. Make the first proposal strong and complete. A job offer negotiation should have as little back and forth as possible.
You should go into the negotiation feeling good about being worth everything you’re asking for as you may be called upon to defend it. Be prepared to explain your rationale, whether it’s the uniqueness of your qualifications or industry standards, and stand up for yourself. Just remember to be gracious and polite. Confident doesn’t mean contentious.
Remember that negotiations are all about compromise. Be prepared to make tradeoffs. And certainly don’t issue ultimatums unless you’re willing to follow through. Just believe in your own talent and negotiate in good faith.
Finally, no agreement is final until you receive it in writing, so review the offer carefully before signing off.
How have you handled job offer negotiations? Tell us what tactics have been successful for you.