The following post was written by Todd from Invested Wallet, and was reprinted with Todd’s permission.
One of the most exciting times in your career is when you are offered the job you applied for and was also hoping to get.
Many times after the excitement settles, you’ll find it’s time to negotiate the salary offer.
This alone can cause extra anxiety, stress, or you might want to avoid the negotiations altogether and accept whatever offer you get, maybe for fear of having the job swept away from you.
However, that is a mistake!
You should negotiate your salary offer because you could be leaving thousands of dollars on the table by not simply speaking up.
If you have some big financial goals or even certain retirement plans, this can hinder your timeframes.
Below, I’m going to cover a lot about the art of negotiating a salary offer and how to improve your counter offer skills to get what you deserve.
Countering Your Salary Offer
You know the one question I despise with job interviews, “How much did/do you make at your previous job?”
When you answer this question you could be setting yourself up for a lower offer.
I understand why employers or recruiters ask it, but it put you in a salary trap without you even really realizing it. And, in some places it is illegal for a company to ask for this information.
Personally, I try to deflect this question by saying one of the following:
- “My current/previous employer considers salary information confidential…”
- “Based on my experience and research of similar job positions and responsibilities, I’m currently looking for something in this range….”
- “My previous salary was below market value, so based on my current research and experience, I’m seeking a salary in this range….”
- “I don’t think that my current salary is relevant, but I will provide it after you share the salary level and range for this job…”
Most times the hiring manager will respect the answer and move on.
If they are overly aggressive on the question, it might not be the type of company you want to work for anyway.
But if you are really excited about the company, be prepared to answer it regardless if you use one of the above lines. If this is the case, try a variation of this:
Give your current salary number (including benefits, bonuses, etc.) and then quickly move the conversation along about where you’d like your career and salary to go within this company.
You want to explain the number you’re looking for, focusing on your skills, your market value, and how you’re looking to grow within the company.
So you got the salary offer…now what?
This is the time when you should get ready to counter offer and start negotiating!
Even if the offer is quite good, you still want to do some considerations before immediately accepting.
And why should you consider negotiating your salary offer?
A CareerBuilder survey found 53% of employers say they are willing to negotiate salaries on initial job offers for entry-level workers, and 52% say when they first extend a job offer, they typically offer a lower salary than they’re willing to pay.
Um, yeah, time to negotiate!
How to Negotiate A Salary Offer
So the real reason you are here is, how do I negotiate a salary offer? It can be intimidating and a bit nerve wracking, but it does not have to be.
Remember if the offer is really good and matches what you are looking for (and then some), there is no need to try to counter back aggressively. Getting greedy for the sake of trying to get more is never a good look.
But If you have received
an offer that’s not what you expect or below your value, you do have a few options.
Below are the steps you should take in order to be prepared and get the most from your future job.
1. Know your salary worth and market value
When you are job searching or preparing for interviews, you should always know your salary worth and market value. Do some research on the averages and then the averages in your local areas as well.
This will help you determine what kind of offer you should get and have evidence to support your salary negotiations.
2. Be prepared with your previous successes
When you are going to negotiate your salary offer, you also will need to prove your value.
Besides what the market might be paying for this position, you need to show your successes and achievements.
This can also include any current steps your taking to further improve those skills (like a class, online certification, etc.).
You don’t want to come off as cocky or braggadocious, but this is your chance to prove why you’re asking for the salary that you are. Make sure you have a handful of solid achievements and data to back it up.
3. Ask questions
When you first get an offer, you should be asking questions about the compensation they provided. That way, you have all the information you need to make a more informed decision or for your counter offer.
Things to consider asking pending the position would be
- Is this the base salary only?
- When must you have an answer by?
- Is there a sign-on bonus? Or any bonus throughout the year?
- How often is my performance evaluated for potential pay increases?
Try to have all your questions aligned in one or two emails or in-person, to eliminate a bunch of back and forth (which can be annoying). But definitely ask questions!
4. Don’t beg or be pushy
You would think this is common sense, yet many job applicants don’t realize how their tone or approach is turnoff in negotiations.
First during this process, you never want to beg for more money. Meaning, don’t complain about your personal finances or debt.
Using that as a leveraging tactic will never work and will only make you come off desperate. Even if you are struggling a bit financially, never bring that into salary negotiations.
The same with being pushy or demanding.
Regardless of the tone of the hiring manager, keep a positive, yet confident attitude. Even if you aren’t getting exactly what you want, keep the atmosphere light and work towards finding a salary compromise.
5. Use other offers for leverage
This might be somewhat job controversial, but it can work if you are approaching this without a smug attitude. When you are job searching, you probably are taking on multiple interviews from other companies.
If you are fortunate to get another job offer or two, you can use this to your favor in the salary negotiation phase.
The key is to politely let each company that you got an offer from, that you have another job offer as well.
Never give them the salaries of these other offers as you are not required too, but this may position the hiring managers to give better offers to attract you.
Also, never use these other offers to threaten and try to intimidate, it will only backfire.
This is one tactic I have not tried yet, but I think can work really well and prove how in-demand as a professional you are.
6. Consider more than the salary
While negotiating the salary offer is important, you cannot forget other factors of the job that are equally important as the paycheck.
You might only be able to get a bit more money, but what else comes with this new job? How’s the work flexibility, the location, health benefits and 401k, or do they pay for training opportunities?
You should look at total compensation value — meaning everything that is included and negotiate on those pieces as well. For example, maybe ask for extra starting vacation, more equity (if they offer stock options), or a different job title.
And if they offer a lot of perks already, then it may be worth accepting without trying to get more money for now.
7. Be prepared to walk away
Sometimes, it does not matter what you do or how you present your case. Companies and hiring managers may have to stick to strict budgets and benefit guidelines that there is no room to negotiate.
It’s an unfortunate part of job hunting. So either you can take what the offer is or walk away from the position. The decision will be on you to make given your current job situation and financial goals.
Now if you are considering taking the offer, try to get a compensation review in place for six months or so.
There is no guarantee that the company will follow through, but worth trying to discuss if you need the job or are still excited about the position regardless of the salary negotiation not budging.
Where Might Salary Negotiations Take Place?
Now that you have some of the basics to starting your salary negotiations, you have to know where these might take place too.
There are three main areas where these discussions could take place, sometimes sooner than you think! Each company and hiring manager will do this differently, so it is important to be prepared for any scenario.
Also note, there is some overlap in these tips, but hopefully this helps you nail down any negotiations in these potential scenarios you may face.
Negotiating salary offer via email
A common place for salary negotiations to take place is through email. Many times a job offer may come through to your inbox after a series of interviews.
Whether you prefer this way or not, it’s quite common.
When you get the offer via email and are ready to negotiate the salary offer, you want to make this process as easy as possible for the hiring manager.
- Be polite and cordial in your reply
- Thank them and show your enthusiasm through words
- Ask any questions you have about the offer
- Check for spelling and grammar
- Present the compensation you are looking for and why you deserve it
- Check spelling and grammar again before hitting send
Negotiating salary offer over the phone or in-person
If it appears that there will be more back and forth, I’d recommend trying to schedule some time to chat over the phone. Even without that, it’s usually a better idea to just schedule a call.
Emailing back and forth can get annoying, plus talking can simplify the conversation and avoid any potential miscommunication an email might create.
Just like your email etiquette, you want to keep the conversation polite and cordial in-person or on the phone.
It’s also important to be in a collaborative state of mind. You want to negotiate, not be demanding or give ultimatums. A working relationship will never be great if that’s how these conversations start.
Also, avoid using phrases like “I need” or “I want.” Even though these are simple phrases, they can be a language blunder that impacts your counter offer success.
These tips also work for in-person as you may be offered the job during an interview round or requested to come back in for a final meeting.
Can Negotiating Your Salary Backfire?
A driving force to why many people might be afraid to negotiate a salary offer is for fear of it backfiring. Meaning, the offer is taken back from you.
In fact, this could happen if you are too aggressive or making the process complicated for the company.
But, you have to eliminate that fear and realize that most employers are expecting you to probably come back with some counter offer. And there is nothing wrong with doing so, if you are prepared and keep a respectful tone.
The challenges can be that the salary range is set by the executive leaders and based on company budgets, so they might have no room to give you more money.
The other challenge to your salary offer negotiation is dragging the process on for too long, which could leave both sides a bit frustrated. Not a great way to start a potential working relationship.
A few additional ways that negotiating a salary offer could backfire:
- Negotiating too soon before an offer is even made
- Trying to negotiate once you said you would accept the job
- Bringing in personal circumstances to try to get more money
- Bragging or making threats about other offers as a tactic (it’s okay to bring up other offers, but don’t use it as a hostile move).
However, if you follow the above insights and steps, you’ll be well on your way to getting the most from your future job.
It’s okay to be a little nervous, but the more prepared and confident you are, the better your salary negotiations will go.
Good luck with your wealth-creating journey.
If you enjoyed this post, you might also enjoy this one: How Much Money Do You Need To Never Have To Work Again? Let’s Do The Math.
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