Why Negotiate A Job Offer?
Negotiating is an important factor not just in the job you’re considering right now, but in determining your earnings over the course of your entire career. Since so many conversations about pay are based on what you’re making in your current job, failing to negotiate for even one position can set you back exponentially over time. Experts say¹ not negotiating early in your career could mean you leave as much as $1 million or more on the table over your lifetime.
What’s more, employers accept that a bit of haggling is an inherent part of the hiring process. Seventy percent of managers say² they expect to negotiate over salary and benefits when they’re making a hire. The majority of them, however, don’t outright say that there’s wiggle room in the offer.
The bottom line is that if you think there’s a better offer to be had, it’s always worth trying to negotiate. Remember, not all job offer negotiations are about money. Whether you’re wondering how to negotiate salary, want to ask for more robust benefits, or just want a little time off before you start the job, negotiating a job offer successfully will give you the best possible chance of getting the outcome you want before you say ‘yes.’.
Now let’s talk about the big conversation: how to negotiate salary. It’s a discussion that comes with a lot of angst for candidates, but that shouldn’t be the case. When an employer makes you a job offer, they’re invested in hiring you. They’ve put in the time and resources to get this far in the process, so it’s in the best interest of both parties to come to a mutually agreeable figure.
Tips For Negotiating Salary and Benefits With a Future Employer
Do your homework
You’ll need to be prepared to name a number early in the negotiation, and to do this, you can’t just throw out a figure you’d subjectively like to be making. Rather, the salary you put forward should be based on solid research of what other companies in your area pay similar candidates for comparable positions. If you already have a competing offer, even better.
Also, be cognizant of what’s going on in the company. If they’ve just downsized, for example, going much higher on salary might be out of the question. If they’re looking to hire five people in the same position, they might have a locked-in figure they plan to pay all five people.
Name the right number
The first number you name in a salary negotiation matters, so it’s important to get it right. This is known as anchoring³, and it’s a psychological effect that influences our perception of possible outcomes.
Here’s an example. If you were hoping for a salary of $75,000, but the interviewer says the range for the job is $55,000 to $65,000, you would probably adjust your expectations pretty quickly to make $65,000 your target number, based on nothing else but the interviewer’s words. It works the other way, too, when you’re naming your desired salary.
Once you’ve done some research on the going market rate for your position, you probably have a good idea of a figure you’d be happy to accept as a salary. Your best bet is to go a little higher than this figure and use that as the first number you mention. This allows wiggle room for you to “compromise” if the employer makes a lower counteroffer and still arrive at a number you’re satisfied with.
Finally, it’s helpful to name a specific number rather than a range, as a range makes it too easy for you to settle on the lower end.