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Negotiating – Salary


You got the call back and they say they want to hire you.  Great news!  You’re excited until the HR guy tells you the salary offer.  And your heart sinks.  What to do?

First of all, don’t accept right away.  Thank them for the offer and ask for a day or two to think about it.  You NEED to understand that they expect you to negotiate the salary.  So, they will start off with the lowest salary they think they can get away with.  They have set your expectations low, so that you will be anchored to that new amount.  Start from the amount you had in mind, express that amount, and come down from it in a gesture of reciprocity.  Don’t feel bad about doing this, because they did it to you.

Second, remember, your competition is NOT the employer; it is the other candidate that they will fall back to.  Your competition is what is setting your pay scale.  If that candidate is willing to do just as good of a job for less than you, they will get the job.  So, if you can, have a sober sense of whether you have unique skills for the job, or whether you have competition.  Or if the job has alot of turnover, express your commitment to the company.  Much of this may require inside knowledge of the situation.

Third, in the first call, ask for a brief breakdown of the benefits.  If your current job is paying all your healthcare premiums, and the new job is a slight raise, but you have to pay 20% of the premiums, you may be actually getting a paycut.

Fourth, look at all the soft factors…are the hours flexible? Is there more vacation time?  Is the 401k matching higher or lower?  To you, the salary may seem like the total compensation, but for an employer, you cost MUCH higher to employ.  For example, a $50,000 salary could be a total compensation of $75,000, including health benefits, 401k matching and all those other factors.  If the job offers 3 weeks of vacation, instead of your current 2, then that’s a 2% less labor you have to put in for the year.

Fifth, expect to counter twice and the employer will reach their expected amount by that point.  For example, employer offers $45k.  You counter with $55k.  They come up to $47.5k, and you counter with $53k.  They come up to $50k, and that usually will be their best offer.

Some no-nonsense employers may not want to respond to a second counter, and they will stay firm on their second offer…it is tougher to determine if they are playing hardball and they really need you, or if they have other candidates who will take less.  You’ll have to use your judgment for that.  If they are just playing hardball, and you are not desperate, then kindly thank them, and tell them that the salary is not worth the change in jobs/lifestyle/hours/or whatever, and be ready to respectfully explain why.  These need to be great reasons, where the HR person can see your situation in your shoes.

Finally, remember, humans love round numbers, so you can reasonably guess at where their best offer will be, based on that.  For example, if you are making $51k, and they offer $53k, you can reasonably assume that they expect to negotiate up to $55k, and that they dropped their starting amount to $53k as a tactic.  Or if they offer $56k, they probably will go as high as $60k.

There are many other things to consider, but we’ll start with these for now.  If you have questions, leave a comment below!