You Got that Job Offer Letter!
You've been searching for a job for months and the offer letter comes in the mail. You feel great about the company and can't wait to accept and start your new position. You open the letter ----- it's $15,000 less than you requested!
How Prevalent are Low-ball Job Offers?
As of June 2024, the US unemployment rate was 4.1%, indicating a full-employment economy, which generally results in more competition for open jobs. Recruiters have reported some job postings with over 1000 applications! Greater job competition results in employers having the luxury of picking and choosing among candidates, sometimes
resulting in a salary offer way below the job seeker's requested amount.
Who Should You Negotiate Your Offer With?
HR is the holder of compensation program information, guidelines, and strategy. An HR representative or recruiter partners usually extend job offers. They are also responsible for salary negotiations and usually follow internal guidelines for authorization of counteroffers and perks. The hiring managers are responsible for signing off on the offered and final amount. Be wary of offers extended by other individuals. Be extra cautious with startups that do not have an HR Department. They may offer salaries without authorization or awareness of guidelines resulting in a confusing offer.
Start with a Salary Survey and Salary Ranges
Job seekers should conduct a thorough salary review BEFORE their first job interview. A salary survey will help you gain control during any salary negotiations. The following information should be gathered:
Identify the average salary of the job in question by state or urban area. The best resources are ONET and BLS which use information gathered by the government from companies every year.
Perform company research to determine their salary competitiveness. Glassdoor and other social media sites are a good start.
Research similar jobs in the state where the job is posted to get an idea of range (some companies voluntarily post salary ranges)
Know if the site where the company job is posted has salary transparency laws (many states require employers to share their salary ranges). Paycom has a great pay transparency site for a state-by-state resource list.
Determine your absolute minimum salary that will be accepted for the position in question. Take into account budget, family needs, and lifestyle.
Evaluate the gathered information to formate a salary range for negotiation.
The job seeker should use the gathered information to formulate a salary range for negotiation use. It should represent their acceptable range and take their market research into account.
Pay Attention to Pay Transparency Laws
Pay transparency laws are becoming increasingly common across the U.S., requiring employers in certain states to disclose salary ranges on posted jobs. These laws give job seekers a clearer picture of compensation expectations upfront, leveling the playing field in negotiations. Always research and know the regulations for the state for which the position resides. Read my blog on pay transparency for more information.
Salary Negotiation Example:
You want to work as an accountant. You have 5 years experience.
You apply to a job in Nevada, where there are no salary transparency laws. Therefore, you start working with the company in question WITHOUT KNOWLEDGE OF ANY SALARY RANGE.
ONET indicates that the median salary in Nevada is $74,720 (which is roughly equal to 3-5 years of experience)
Your salary range research shows a Sr. Accountant between $70K and $90K
Your personal needs for your salary are between $70K and $85 (of course you'd like more but you need to see the potential employer's salary range.
Your offer is $70K. You request a counteroffer of $78K and the employer counters with $75K. (Overshooting a little allows the employer to counteroffer to the average).
A Sample Salary Negotiation Letter After Job Offer
Subject: Salary Negotiation for Accounting Position
Dear [Hiring Manager's Name],
Thank you again for offering me the accountant position at [Company Name]. I’m excited regarding the opportunity to contribute to the team and leverage my experience in this role.
After carefully considering the offer, I’d like to discuss the base salary. Based on my experience and current market research, I am requesting a starting salary of $78,000. This aligns with the median salary for accountants with similar experience in Nevada.
I’m confident that my expertise, especially in [specific skill or achievement], will bring immediate value to [Company Name], and I’m eager to start making an impact. Please let me know if we can further discuss the offer, and I look forward to hearing from you soon.
Best regards,[Your Full Name][Your Contact Information]
Know Your Worth!
If you have the information you need IN ADVANCE of any interviews you've already increased your confidence! You already know what other companies are paying. You know how low you can go if the offer is inadequate. You know your value and worth, putting you in control.
How to Negotiate a Salary After Offer
Your Salary Negotiation Strategy Depends on Where You Are in the Interview Process:
The Budgeted Salary Range Shared Early in the Interview Process
If the range is below your minimum acceptable salary, consider withdrawing from consideration. Even if the negotiation is successful, the salary may still be too low to live on. There is no shame in stepping away!
If the range is within your minimum acceptable range:
Consider asking for a counteroffer. Use your researched information as evidence to back up any requests. Your numbers don't lie!
Skip the counteroffer. A job offer CAN meet or exceed your needs.
The Budgeted Salary Range is Not Shared Upfront or Late in the Interview Process
If a potential employer doesn't share their salary range early in the interview process, ask for the range they have in mind.
The potential employer puts you at a strong disadvantage if you are asked for your range. If negotiations continue, and the potential employer fails to provide a range, use prepared research to request a salary range, NOT an exact figure.
Salary Negotiation Tips for Outside Hires
Recruiters always know and should share their budgeted hiring range in your first conversation.
While speaking with the recruiter, watch for visual or verbal clues as to whether the potential employer is open to a counteroffer.
It happens rarely, but job offers can be withdrawn if candidates negotiate too aggressively.
It doesn't pay to get excessively greedy. Most employers are constrained by other employee's salaries, internal pay policies, and the going market rate. Don't assume or expect to get the maximum of salary range as that is reserved for very long-term employees.
Sometimes it helps to give the employer a little room to counteroffer.
Internal Promotion Salary Negotiation Tips
Beware of internal compensation guidelines that limit your increase amount
Ask HR for the salary range upfront when negotiating.
The salaries of coworkers with more total job or industry experience may limit your offer amount.
Get the highest salary you can during negotiation (you won't be fired for negotiating if you are already employed!)
When Should You Walk Away from a Salary Negotiation?
Ask yourself the following questions:
Does the potential employer respect me?
Does the potential employer appear to be transparent and open during salary negotiations?
Do I want to work here?
Can I live on this final salary?
If there are warning bells, walking away may be your best decision. Your time as a job seeker is valuable. Potential employers interview candidates, and candidates interview potential employers. Remind yourself during negotiations that YOU are the person who was chosen to fill the posted job!
Are there Benefit Alternatives to a Higher Salary?
Following are a few examples of the perks or benefits that can be negotiated as an alternative to higher pay:
Remote work
One-time bonus
Professional Development Monies
Tuition Reimbursement
Specific Expense Reimbursement
Professional Title
Relocation Assistance
Flexible Hours
Sabbaticals or Unpaid Leave
Preferred Parking
Preferred Office Location
Health insurance costs, 401k match, bonus percent or amount, stock, and additional vacation are not generally negotiable at large companies, but exceptions can occur for small companies, startups, or executives.
Conclusion
There is always the remote chance that the employer will decline to hire you if your request is too high. Most employers want to negotiate in good faith. KNOW YOUR WORTH while you negotiate. Job seekers interview prospective companies and companies interview job seekers. It works both ways.
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