As part of any successful job hunt, eventually, the company will contact you and make a job offer. This may be a formal written offer, a verbal offer, or a verbal offer with the details to be written up and sent to you upon acceptance. Some job candidates get stressed out at this point and just accepted whatever is offered. This is one of the most expensive mistakes that can be made in life – some studies calculate that not negotiating your first salary can cost you $500,000 over your career.
The most important thing to remember during a job hunt and a salary negotiation is that you’re discussing an EXCHANGE. You want their money and they want your labor. You aren’t a beggar asking them for something while offering nothing in return.
You May Risk The Job Offer
There absolutely are examples of companies that have rescinded job offers after someone was offered the position and tried to negotiate. This is very uncommon, but it does happen. If you are absolutely, completely desperate for work and can’t tolerate any chance of losing the offer, then it may make sense to accept or negotiate very gently. The Harvard Negotiation Project, the results from which are well summarized in the book “Getting to Yes“, proposed the idea of your BATNA – “Best alternative to a negotiated agreement“. The idea here is, in any negotiation, consider what will happen if you don’t come to an agreement with the person.
If your BATNA is that you starve and lose your home, accept the job. If your BATNA is you accept a second superior offer you have on the table – negotiate hard. If your BATNA is to stay at your current job that you like well enough – negotiate hard. If your BATNA is to continue a job hunt that you’re still in the early days of – negotiate hard.
Stay Positive About The Position!
It’s never a good negotiating tactic to criticize the position or what you don’t like about it. Some people might attack an object at a flea market to get a better price, DON’T DO THIS with the position at a company. The recruiter may just think “this person wouldn’t be happy here” and rescind the offer. Any time you refer to the position or company, it needs to be in glowing, enthusiastic terms. For example, “I’m really excited about this position and joining your company. Unfortunately, the compensation just isn’t something I can accept right now.”
Talk About What You’re Worth, Not What You Want
You’d never want to say something like “I have a lot of student debts and couldn’t pay them and live off of what you’re offering.” Instead, say something like “workers with my qualification earn more than the current offer in <geographic location>”.
The Most Valuable 10 Seconds In Your Life
One of the softest possible, yet incredibly effective techniques if you’re told a salary over the phone or in-person is to stay silent. It will be an awkward moment to not say anything and just look at the person, but it can work wonders. If you really don’t like the silence (you won’t, but neither will they), you can say “hmm”. Often times the person will increase the offer to defuse the silence and on the assumption that you’re unimpressed with this offer. If they don’t, you can say something along the lines of “thank you for the offer, I’ll think carefully about that” and continue the conversation.
After A Job Offer Is Made To You, You’re In The Most Powerful Position You Ever Will Be In
When a company makes you an offer, they’re saying a number of important things. They’re saying that they believe you are capable of doing the job. They’re saying they believe you’re better than the other applicants. They’re saying that they’re ready to be done with the job-hunting process and to work on something more important to the company. Trying to find someone to fill a position takes time and money, so when they make an offer to you, they really, really want you to accept.
Companies don’t let employees shake them down, so some variant of “give me what I want or I’ll quit” will be ineffective once you’re hired. This is the one, brief moment in time when you’re most likely to be able to influence your compensation.
Negotiating is Best Done on the Phone or In Person
I’d *LOVE* to take time composing the perfect, nuanced e-mail and have the chance to get friends to review what I’ve written and think about each response. The reality is that emotional tone is hard to read from an e-mail. Something that you are tentatively suggesting may come across as a “take it or leave it” demand via e-mail. Negotiating by talking to the person is the best medium.
Never Say “Take It Or Leave It”
No one likes ultimatums. No matter how much they want you, this is likely to turn them off.
Never Name The First Price
It’s never a good idea to name the price first. Years ago a friend came to me and was excited that he’d been offered a tech job in Toronto. The company had told him to send his salary requirements and he told me, offhandedly, that he was going to respond with $60k. I stopped him in his tracks, sat him down in my office, and explained what he was going to do. He wasn’t going to give them any price whatsoever, certainly not $60k. I iterated all the reasons he was worth more than $60k. I then went over with him possible lines he could use to deflect their attempts to get him to name a salary. I made him promise me he wouldn’t give them a number. The next day he walked up to me, all smiles, and said that they had made him an offer of $100k. I made him $40k, plus the increased salary of all future positions he’ll have in the future, in a couple of minutes.
Most Offers Can Be Increased
Companies have discretionary resources. It would be VERY unusual for a company to make an offer and not be able to make any adjustments to it at all. If a company has many people in the same position, and this compensation is public there might be a worry that paying you more will cause problems with the existing employees. Some organizations have set salaries, which may also be fixed – think government workers or union shops.
Even when salary can’t be adjusted, you can usually ask for non-salary items. Some things to consider are:
- Signing bonus
- Company car
- Training budget
- Equipment budget (a smartphone or tablet perhaps)
- Conference budget
- More vacation time
- Home Internet
- Health insurance
- Professional membership dues
- Exam fees
- Tuition reimbursement
Jack Chapman provides the 10 commandments of salary negotiation.
What have you found to be the most effective techniques when negotiating salary? Is there anything you regret doing/saying? Anything you wish you’d done in retrospect?
After posting this, I expanded on the topic to write a book. It’s a short (9k word) ebook that can be read in under an hour and is available on Amazon.