How do I Negotiating the Employment Offer

In the excitement of being offered a job, it can be easy to accept a position before thinking through the details. Most job applicants, unless they have been in the business of hiring, are unaware that over seventy percent of employees who are extended a job offer could have secured a higher compensation package had they gone about the negotiation process correctly.

Throughout your job search process there are many decisions that you will face. The decision-making process doesn’t stop when you receive an offer. No matter how long you’ve been searching for new employment or been recruited to a new company, it’s unwise to accept an offer without serious consideration to a number of questions.

It’s crucial in the process to prioritize what is most important to you and evaluate the extent to which the offer aligns with your priorities and career goals. In the job offer phase of the interview process, negotiation should be a non-confrontational event, business focused discussion aimed at resolving differences between two parties with the same goal.

In order to be an effective negotiator, job seekers need to understand the dynamics behind the conversation and use this information to create a give and take dialogue with potential employers.

What often gets in the way of rewarding win-win conversations is our fear of rejection or potential conflict. Successful negotiators view the process as one of collaboration. They listen to the employer’s needs and recommend outcomes that benefit both parties.

They recognize that savvy negotiators build relationships and never give ultimatums. Strategic job seekers understand that the
negotiation is hopefully the first of many relationship building conversations they will have with their future employer.

Tips in negotiating employment packages:

Everyone is capable of negotiating, but nobody is born knowing how to be an effective negotiator. It is a learned skill that isdeveloped with experience. We can all learn to negotiate effectively for what we need and want. Keep in mind you wouldn’t be receiving the offer in the first place if you weren’t the person selected as the best candidate for the job. This gives you leverage.
Once an employer decides you are the person for the job, the primary concern will not be to negotiate the least expensive compensation package the company can get away with. The focus will be on getting you to accept the job. Most employers invest a great deal of time and energy in the interview process, and are very reluctant to settle for second best when their
number one candidate makes an attempt in good faith to negotiate for more money.
Never ignore job openings because of perceived salary shortcomings. In many cases, those who keep an open mind and interview for positions that at first glance might appear too junior can build a great deal of value into their candidacy by discussing additional responsibilities they can handle within the position and in turn negotiate a better compensation package.
Always approach a job opportunity like it is the Ideal Job. While you don’t want to waste your time to get an offer if you just don’t think the job is right for you, many people drop out of the running too early in the interview process because they don’t want to be in a position where they have to turn an offer down.
Continue to interview for all but the most unlikely positions until you get the job offer. It’s ok to walk away if after the
negotiations the job still isn’t a good fit for you. In addition, statistically, one out of every two jobs will be newly created positions in this decade and the next. This allows candidates to help design their own positions with employers throughout the interview and offer process.
Surveys suggest that 85-90% of hiring managers do not make their best offer first. The employer begins the negotiation process knowing how much money is budgeted for the position and how much flexibility there is around that figure. They also know how long they’ve been looking and how competitive the job market is for someone with your abilities. These factors influence what they offer initially. They want to have some wiggle room…they know the candidate may chose to negotiate their compensation. By starting low they have built in flexibility during the negotiation process.
Counteroffers are generally 10-15% above the original offer. Again, employers know they may need to negotiate, so it’s reasonable to assume that there’s flexibility built in to the initial offer. Employers expect you to negotiate. In addition to the financial rewards associated with salary negotiation, you will gain the respect of the hiring manager and increase your
credibility within the organization.
Negotiation starts the moment you submit your resume and continues during the interview process. Don’t sell yourself at one level and then expect an offer for a higher level. During the interview process you start building the relationship with the employer and showcasing your value as a candidate. Once you’ve built maximum value throughout the interview process, you will have the leverage to negotiate the best compensation package possible.
Generally it is reasonable to request up to one week to make your decision regarding a position. As a matter of fact you should never accept a position on the spot. You want the employer to view you as a prudent decision maker and you want them to understand that you don’t rush into big decisions.
Express your excitement regarding the offer, but allow yourself some time to think about the level of responsibility within the position and the associated compensation. Another reason for not accepting the offer on the spot is to make sure you have time to review the offer and determine what points you may want to negotiate.
Always get the offer in writing. Because of the large number of mergers, acquisitions, and downsizing’s, it’s important to get terms of employment in writing. Find out if the company routinely provides new hires with employment contracts. If this is not offered, use a confirmation letter to spell out the terms you have agreed to accept. During the negotiation process, use a follow up memo after each discussion. This gives you more control over the final agreement.

Also consider benefits that provide personal satisfaction such as the number of leave days provided. When preparing for negotiating a job offer evaluate the benefits that don’t have a specific $ value at this point. Apart from compensation what else does this job offer include? Consider these aspects before you begin negotiating a job offer.

What kind of promotional opportunities can be expected over the next 5 years. Along with this, what kind of salary progression can be anticipated during this time? How often do salary reviews take place?
What training will you receive on the job? What will this training translate into in terms of the value of your skills and experience, your goals and your overall job satisfaction.

These tips remind candidates that the negotiation process reinforces individual empowerment and group cooperation. By viewing the negotiation as a step towards consensus building and understanding the psychology behind the exchange, candidates can improve their bargaining power significantly and begin new employment relationships on a positive note.

Now put together your negotiation proposal

After considering the entire compensation package you are in a position to decide what is important to you and what benefits you want to negotiate in addition to the salary.

Evaluating Offers and Salary Negotiation

Congratulations! After a long and arduous interview process you have a job offer and are waiting to hear from other employers. Evaluating the job offer to make sure that it’s the right one for you needs as much effort as writing a resume or preparing for an interview. Being prepared to discuss salary is also an important part of the process. Remember that the Office of Co-op and Career Services Office is available to help!

Evaluating Job Offers

Carefully weigh all the important factors listed below in considering the offer and don’t hesitate to discuss any questions or concerns you may have with your program coordinator.

Job content or nature of the work

Your future boss
Company culture
Salary and benefits
Co-workers and management team
Typical work week
Location

You should promptly acknowledge receipt of all job offers and promptly inform the employer of your plans, which are outlined next.

Accepting/Rejecting an Offer

Job offer options:

Stall – Not Ready To Make A Decision: Express appreciation for the offer. Tell them that because this is an important decision you would like some time to carefully think about it. Agree on a reasonable time frame to get back to the company. You should not need to accept any offer on the spot. If you are waiting to hear back from other companies with whom you have interviewed, contact those companies and find out when they will be making a decision, informing candidates, and, if you can, find out whether you are being considered for the position.
Accept – You Really Want This Job: Show your appreciation for the offer. Ask the employer to confirm the offer in writing. Do not interview for any other positions. Reject all other offers immediately by telephone or e-mail. Report your job to the Office of Co-op and Career Services.
Reject – Thanks, But No Thanks: Express appreciation for the offer. Say something positive about the organization and be diplomatic. Let them know that the position is not a good fit at this time.

Ethics of Accepting/Rejecting an Offer

Once you accept a job offer, even verbally, you must not back out, or renege on the job, to work for another employer. If you have any questions/concerns about this, discuss with your program coordinator before taking action!

Good employer relations are vital to relationship with employers, and you, the student, are a critical link in this relationship. In addition, reneging on an offer could damage your chances of future employment with that company. Therefore, consider carefully before accepting a position.

Discuss offers thoroughly with employers so you understand the terms and reach a mutually acceptable date to respond to their offer.
Request extensions from employers if you need more time to consider other offers. Do not ignore deadline dates you have agreed upon.
Notify employers that you are accepting or rejecting an offer as soon as you make your decision – never later than the arranged date.
Once you accept a job offer, immediately inform other employers who have offers pending. Honor your acceptance of an offer as a contractual agreement with the employer.
Cancel any other scheduled interviews or on-site visits.

Salary Negotiations Strategy

Compensation negotiation is the last step in the interview process. Generally, compensation packages are determined by several criteria: your education, experience level, previous offers, compensation history, and the organization’s overall needs. When your position is one that generates revenue, the amount of revenue it generates is often a factor in determining the total compensation package as well.

Enter the negotiations with the right attitude. Negotiations are not about threats and aggression but a two-way process of communication and discussion where each party benefits from the final agreement. Each party should understand and respect the others position and feel that they have been heard properly. Start the meeting by sincerely expressing your thanks for the job offer and by highlighting your interest in the company.
Be Prepared and Research the competition. Many factors determine salary offers; the type of work you perform (based on your skills, education, and experience level), the industry, company size and the geographical area. Keep in mind that there is more room for negotiation when discussing full-time offers versus co-op or short-term employment.
Start by learning what the typical salary range is for the job and what your skills are worth. Salary range information is available from a variety of sources including trade magazines, the Bureau of Labor Statistics, and the Internet. The Office of Co-op and Career Services Web site has salary information, for specific programs, collected from both co-op and graduating students.
Next, determine your total compensation requirement. Work out a monthly budget incorporating all of your real and anticipated expenses, savings, “fun” money, and a cushion for emergencies. Remember that taxes come off the top of each paycheck, approximately 28% of your gross income.

Salary Discussions

Early in the process the employer may try to find out if the company can afford you. You can choose to do one of the following:

Ignore the request, which is obviously risky.
Inquire if there is a set salary/guarantee draw range for the position.
Acknowledge the request and say that you are open and flexible about starting salary, but that you expect to receive competitive compensation.
Provide your income requirements, but only after you have done your research. You should provide the employer with a broad range and make sure you are comfortable with the bottom range figure!

Generally, you should wait for the employer to bring up the compensation structure. Ideally, this happens near the end of the interview process when you know more about the position. However, if the employer doesn’t mention compenstion package, and you are at the point of seriously considering a position with the company, it is appropriate for you to bring up compensation.

Factors Beyond Salary

Keep in mind the benefits the company is offering, as well as other perks such as; 401K, relocation expenses, company car, bonus,
vacation, holidays, life and medical insurance, tuition assistance, and stock purchase or savings plan. These benefits can add as much as 30-40% to your actual salary.

Put a Direct $ value on the following:

Salary, Draw and Commission split
Bonuses
Profit sharing
Stock options
Overtime
Insurance benefits
Direct expense coverage such as car/transport, tuition, phone etc…
Company services that have a specific $ value to you such as child care, wellness programs etc…

Factor in aspects that have an indirect or potential $ value such as training, promotional opportunities and anticipated salary increases. Prioritize your interests and decide where you are willing to trade one thing of value for something else. Is the performance bonus more important than the salary?

Negotiating a job offer requires two major steps. 1. Planning which involves research and information gathering to develop an effective negotiation strategy and 2. Communicating effectively with the employer to get the offer you want.

Once you have completed the negotiation planning by you are ready to move on to the actual negotiations where information is exchanged and agreement reached.

The timing of the job offer negotiations is a key negotiating skill. The best time to conduct your negotiations is once a job
offer has been formally made. Your value to the employer needs to be firmly established first. You can set up a meeting to discuss the compensation package and be well prepared with all the necessary information.

Countering the Initial Offer – Negotiation Technique

Begin the salary negotiations by restating the original offer you were made. Open your counter proposal by stating your position.

“I am very interested in this position and working for this company, however I am not able to accept this offer for the following reasons………. If you are able to increase the salary to $… I would accept this position immediately. Can we discuss this?”

Always negotiate on the basis of your qualifications, your experience, your abilities and skills in relation to their worth in the job
market and not on the basis of your wants or needs with regard to income and expenses.

Support your compensation request with the research you have conducted on your competitive market value. It is much easier to persuade someone to agree with your compensation request if the proposal is firmly based on objective criteria, such as what people with similar experience and skills are currently earning. Use this data to get agreement from your prospective employer on what the market pays for the job.

Once you have found out what you are worth in the broader market and industry and your company-value, you need to determine what company-specific factors may affect the given compensation package.

The information you need to research about the prospective organization includes:

How successful is the company
What is their current profitability
How does it rate against the competitors in terms of market
share and turnover
Where is it in terms of the business cycle – is it new,
growing, stable etc…

If the company is currently enjoying growth and success your compensation request will be received more favorably than if it is currently struggling and facing stiff competition. Consider the current stability of the organization when planning your compensation negotiations.

Remember however the data may be subjective to interpretation and the compensation negotiations will take place in relation to
it. Reinforce the value you will bring to the company, the impact you will make and the potential revenue you will generate. Use your company-value you determined during the negotiation planning stage to support this.

Always start at the top of your compensation range as this gives you room for negotiation. Avoid making demands but raise questions and make requests during negotiations. The tone should be conversational and not confrontational.

” I have based this figure on my research into the current market value of my skills and the responsibility level of this position. Would you agree that this is a fair calculation of my competitive market value?”

Have alternatives ready if the employer is reluctant to meet your compensation request and you are still within your minimum range.

Discuss other aspects of the whole compensation package. If you have selected certain benefits as part of your job offer negotiations strategy then state that you will consider the salary as part of the overall compensation package. Suggest that in order to balance the compensation package there are certain benefits you would like to discuss.

Always negotiate the base salary first then move on to the other elements of the compensation package. Negotiate one point at a time. Be sure to include a few benefits in your proposal that are less important to you and that can be dropped as a concession to the employer as negotiations continue.

If the employer cannot initially agree to your compensation requests you can discuss and agree on a guaranteed review within a specific time period, usually 3 or 6 months. This salary review should be stated in writing as part of the job offer. Do NOT except a verbal offer, your final job offer must be given in writing.

Sometimes the negotiator does not have the authority to make a final offer, but needs to go to a superior. Ask them to do so and make a follow-up time.

Your job offer negotiations should end on a positive note. Express again your enthusiasm for the job and how much you will contribute to the company. The key is to negotiate salary and compensation in a way that both gets you the job offer you want and earns the employer’s trust and respect.

It’s crucial in the process to prioritize what is most important to you and evaluate the extent to which the offer aligns with your
priorities and career goals. In the job offer phase of the interview process, negotiation should be a non-confrontational event, business focused discussion aimed at resolving differences between two parties with the same goal.

In order to be an effective negotiator, job seekers need to understand the dynamics behind the conversation and use this information to create a give and take dialogue with potential employers.

Back

Back to Ask the Recruiter

The EMAC Group