Negotiating salary on a job offer

Parent Cafe
21

My daughter negotiated salary in both of her positions, the first was a job right out of college, the second 18 months later. Always ask for more. You may not get it, but ask.

With the first job, they said they couldn’t match her other more lucrative offer, but they gave her a signing bonus instead.

With the second position, she gave them a number she hoped for (the original offer was more than she expected, so she had to work up the courage to ask for more). They told her they couldn’t increase salary, because everyone in her group was paid the same, and they expected them to talk with each other about compensation. But they doubled her signing bonus, which was pretty substantial to begin with.

I think that, as a woman, it’s important to at least ask.

22

They should leave it blank, if that’s possible.

23

In my experience, giving a desired salary range is generally required.

24

I strenuously disagree. It is not the employer’s problem if your rent is too high. The employer would be well within his rights to conclude that you don’t know how to live within your means.

You get paid a certain amount because of the value you bring to the employer, not because you need a certain amount of money to live a certain way.

25

I have always read that using personal spending habits to negotiate pay at a job was a bad idea. Only job-related costs (where the new job would require some sort of unreimbursed increased spending or relocation to a significantly more expensive area) might be an exception.

26

Has she been able to find out what the typical pay ranges for the type of job are at the employer in question?

Remember to consider the value of benefits that the employee will use, since some employers may offer much better or worse benefits than others (medical insurance can show large differences in coverage, and even similar coverage levels may come with different insurance company preferred provider networks).

Many people are willing to take a lower compensation (pay + benefits that they will use) for a better quality (to them) job. Or employers with worse job quality may have to pay more to get employees to join and stay.

27

Very interesting that many suggested to negotiate in person or on the phone rather than email. I’ve done many hirings and it’s really annoying and It puts me in a very awkward position when someone called me up to negotiate the salary. I need time to think, know my options/limits, and respond. So email is the best. I also tell send the email to the HR person. It’s not personal, just put everything in writing and HR will come to me and we will see what we can do to make you happy.

If someone called me and said “is there any room for negotiation”, I would roll my eye so hard, if I said yes that means I lowballed the person to begin with and I always try to give the max offer (HR can shoot me down but I will always try). If I said no then it might not be true either. Because I can always fight with HR to get more. My goal is to make the new hire happy. So, tell me WHAT you want/need and I’ll see what I can do. WHY you want it is much less relevant to me. I always assume everyone needs more money, and good for them for asking.

To each their own.

28

With all due respect, this is a horrible idea. It would almost make me want to withdraw the offer. Not bc of the money, but I wouldn’t want to hire someone who thinks their potential employer should be responsible for their standard of living. Just please don’t tell your potential employers your list of expenses, ever, please.

29

This was the justification used for paying men with families more than women doing the same job.

no no no

30

@Nhatrang: That is an example of a tactic used by more than one person that actually worked. But these are experienced individuals who were offered less than they would accept & were prepared to walk away.

So much depends upon individual circumstances of both employee & employer.

31

While I think you should do this on the phone, you should set it up by email. Don’t just pick up the phone and call. As someone who is often at the other end of these calls, I would not want to be surprised. But I would want to talk to find out what components mattered. I have had people agree to less salary and more vacation and walk away happy!

32

@promom4: I am not an HR person. My best advice is to answer honestly.

In the most recent instance of an experienced professional with which I am familiar, the applicant responded with a specific, well above market figure & was successful after interviewing with several partners & managing directors.

Situations differ. And approaches should differ based on economic conditions. In a robust economy with low unemployment & highly specialized skills, an applicant can be aggressive. During a down or stagnant economy, applicants should be careful.

In a fairly recent response to want ads for a major law firm which was seeking attorneys for multiple slots, one of the positions required a very specific skill not typically found among corporate attorneys. Even though this firm engaged in lockstep pay practices under the Cravath scale, this individual was able to negotiate a base salary & bonus schedule one year ahead of his / her law school class.

P.S. FWIW All negotiations with which I am familiar involved thriving major professional services firms or public Fortune 100 firms.

33

Sometimes the new company will consider documentation of your current salary in negotiating a new salary. If, as you (OP) say, the company is likely very financially solvent (wow thats great!) they may be open to revisiting this (or negotiating other benefits, as others suggest). Alternatively, given the current situation, asking for a review and salary bump in 6 months might be worthwhile if they are not responsive to the initial request.

34

@Nhatrang: A fairly recent incident involved an experienced engineer moving into sales for a major international concern. Base & commission or bonus based on sales. The individual negotiated a higher base based on current expenses. Total comp far exceeded the negotiated base.

As I noted above, situations, needs & circumstances vary & negotiating tactics should be adjusted accordingly.

When entering into negotiations regarding compensation, the applicant needs to determine whether or not he or she is willing to walk away.

35

Seems like being very able and willing to walk away from the job is the key factor in the likelihood of success and how aggressive one can be in trying to negotiate better compensation.

Yes, that is a big factor, although one should be careful to note that it may matter less what the overall economy is like than what the market for the particular kind of job is like. For example, before COVID-19, many desirable jobs were employer’s markets (as evidenced by people needing many months of applying and interviewing before getting an offer), despite low unemployment rates overall (where anyone can get an entry level job delivering packages or driving ride share, for example).

36

I am in corporate HR so will add my two cents after 30+ years negotiating salaries.

First of all- just because STATISTICALLY women are paid less than men, does not mean that every single woman in the workforce is being underpaid, and therefore, is required to negotiate her salary before accepting it. This is a very common fallacy. There are a lot of organizations which have lockstep type compensation systems, and therefore whether you are male, female or neither, you are going to be paid the same starting salary at your particular band and skill level. And of course, there are successful women who make more than the men, at that same level, and uber successful women who outearn men with even more experience. The paygaps which make the headlines are aggregated data based on millions of workers- not any particular woman being paid less in a particular role. And the numbers are moderately skewed because of women clustering in lower paid professions-- nursery school teachers make less than Firefighters in most parts of the country.

So asking for more just because you are female with no understanding of how this organizations comp works is bad advice IMHO

Second, most big organizations use a “Total Comp” system, although there are many other names for it. That means if your starting salary is 75K, your company paid healthcare plan is worth 15K, your annual bonus is going to be 5-15K depending on your performance, and the company contribution to your retirement plan is 7.5K, the number that shows up as your “total comp” is the sum of all these things- even though most employees fixate on the salary (to an obsessive degree in some cases, since some parts of the package are tax advantaged whereas an extra thousand dollars in salary won’t net the employee an extra thousand bucks.) So without an apples to apples comparison of current pay vs. the new offer, it’s hard for the hiring manager to hear “this is less money than I’m making”. Maybe the new company requires zero contribution for a better healthcare plan? Maybe the new company is paying 10% towards a retirement plan which vests immediately, vs. the old plan which matches 3% and has a multi year vesting schedule.

Third- agree with the advice to put the request in an email. It’s always good to have the benefit of time- on both sides. It’s too easy to lose track of the argument on the phone, and it is a little disruptive to the hiring manager if he/she is caught unawares by a phone call coming in the middle of the day. If someone MUST do it over the phone, at least send an email with a heads up- “Hi Joan, I’m so excited about the offer! Can we set up a 15 minute call to review the numbers and for me to give you some context about my current salary?”

So to the OP- if it were me I’d encourage my daughter to do some research first. Glassdoor is moderately helpful. Asking colleagues who they know who work at this organization- or have worked there in a recent past. See if someone will spend ten minutes on the phone to explain how the comp works. If this doesn’t work, then schedule time with the person who made the offer to say “I’d love to understand how your compensation system works”. Some organizations are more transparent than others, but this is not an offensive question to ask.

Your D may discover that the organization gives reviews and raises regularly and that high performers are accelerated quickly. Or she may discover that getting an extra 10K now means that she’s topped out in her band, and won’t be seeing more money for two years. Or she may discover that the organization is a hot mess, with no comp strategy at all, and that you’d better get everything you want upfront (which a former employee may candidly tell her- the place is a land grab).

I worked for a company once which pegged cash comp at about 80% of what the market leaders in the field were paying. It was a little frustrating to hire people, because our offers were generally disappointing the people we tried to hire. BUT- turnover was really low, nobody ever left, we’d hire for new ventures which were inevitably successful which was always fun to recruit for and to talk about. Quality of life was high, people respected their colleagues and adored/revered their managers-- really, the only downside was the cash. The benefits were unbelievable and progressive (one of the first companies in the US to extend healthcare to domestic partners without regard to gender, generous adoption policies, IVF included in medical, etc.) And good benefits are expensive, so on a total comp basis the packages were more than competitive.

When the labor markets got tight, salaries ratcheted upwards in order to retain people, attract the new hires we needed. During recessions, things stayed flat. During recoveries, things moved higher but slower than competitors.

I don’t know if I’d have managed comp in the same way if I’d been in charge- but it was a perfectly viable strategy in its own way. You don’t like the money? Go somewhere else where they’ll work you like a dog and disrespect you at the same time. And good luck getting paternity leave if you adopt a baby. You’re OK with the money? You’ll have a wonderful professional life with good work/live balance. It’s a choice.

Good luck to the OP’s D!

37

There is a lot to be said for having better work/life balance… .even if salary not the same.

38

@colorado_mom: Agree that many place a significant value on work / life balance. But sometimes I get a bit upset when the worker / professional is young & single without dependents.

I know several young attorneys who left a high paying associate position with a major law firm for an in-house position which paid less but offered a better lifestyle. Easily understandable for those with a young family, but sometimes the pay gap is significant.

I recently dealt with a family situation where the pay gap was dramatically different and the young, single with no dependents professional elected to stay at the position which paid much lower (about 50%) rather than to move to a major law firm with longer hours required at the office (versus working remotely) & more pressure. ( The law firm pays on the Cravath scale & the family member could have entered as a third year for two of the positions or as a fourth year for another associate’s position which required an unusual skill for an attorney.)

As @colorado_mom: wrote “even if the salary is not the same” = in the above examples the opportunities for the young, single professional with no dependents were dramatically different (either 2x the compensation or 2.5x the annual compensation depending upon the position taken) and the offices are within walking distance of the current employer. But the young professional placed an extremeley high value on mentoring, loyalty to current employer, & job security.

My point is that each situation is different & any negotiating strategy depends upon the facts & circumstances of the specific case. Individual values can & do vary, while employer needs & pressure / ability to fill certain jobs varies.

39

And I do understand the assertions made above about what not to do or what to do during negotiations. But reality is often much different depending upon the specifics & upon the type of negotiation involved.

There is a widely used training video for practicing attorneys on negotiating when both the law & the facts are not on one’s side. The video is uncomfortable to watch. It involves a negotiation between two attorneys. The attorney in the unfavorable position acts in a semi-bumbling & disorganized manner which results in the attorney with the much stronger case actually helping the first attorney by offering guidance & suggestions which result in a much better than expected resolution of the matter for the attorney’s client in the unfavorable situation.

The video shows how human nature can be used in one’s favor. By acting in a bumbling, disorganized manner, the first attorney’s behavior resulted in the second attorney revealing his best offer in order to resolve the matter. Human nature.

Of course, this was not a negotiation over salary or total compensation. But it illustrates how one can tilt an unfavorable situation in the opposite direction.

I have read posts above that disagree with bringing one’s actual living expenses into the negotiations. And those posts make sense except for the fact that it is a tactic which often works.

40

Publisher- your points are well taken, but we don’t actually know if this is a negotiating situation.

Perhaps the OP’s D has already been made an offer which is 5% over the top of the band- because the organization wants her so much. So the hiring manager ALREADY negotiated on her behalf. Perhaps the organization is in the middle of a comp review (my company just finished one for several classifications of employees) and the OP’s D is going to get an automatic 10% increase at the next review period (on top of any merit increase) just to “normalize” her salary. And if she walks in 5% higher than what they’ve offered her, she’ll be within her band and will therefore forfeit the automatic 10% increase…

We don’t know and neither does the OP. I don’t walk into a negotiation where there is nothing to be gained by negotiating-- and I suspect you don’t either. I paid for a medical procedure out of pocket at the end of last year, because I had researched what my doctor gets paid by insurance to do the procedure (and has to wait 60 days to get paid) whereas I waved my checkbook and paid on the spot. I hadn’t hit my deductible, so I offered a number slightly above what the doc gets paid from insurance, and saved myself several hundred dollars. THAT’s a negotiation because I knew what the upside was. But you don’t offer a cardiac surgeon 3K for a procedure if the insurance rate is 15K- that’s a waste of time.

The OP’s D is going in blind if the assumption is just “Oh I’m female, therefore they’ve lowballed me on comp”.