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Salary & Benefit Negotiation

10-20-17

Before you negotiate any type of job offer (e.g., academic, business, government, industry, nonprofit), here is what you need to do:

  1. Convince yourself that negotiation is in your best interest.
  2. Understand the negotiation process and terminology.
  3. Discuss disciplinary norms and nuances with your mentor.
  4. Calculate your living expenses and create a budget. There are a variety of calculators online to choose from.
  5. Create a checklist of your “must haves.”
  6. To set a salary goal, know your fair market value.
  7. Learn how answer “What is your salary expectation?”
  8. Practice your persuasive communication skills.

Whether your offer comes in person, over the phone, by email, or by mail, be sure you take a day or two to review the total compensation package.

It is also a good idea to discuss your offer with a mentor, partner, or other trusted person before making a decision.

What Happens When You Don’t Negotiate

A low base salary can significantly impact your longterm income, retirement, future bonuses, cost of living increases, and the value of life insurance coverage.

Accepting $5,000 less in starting salary can add up to a loss of $600,000+ over 40 years of employment. 

So why don’t people negotiate job offers? 

According to www.salary.com, some people worry about losing the job offer if they negotiate. Others report that they lack negotiation skills or do not have the self-confidence to negotiate.

Job Offer Negotiation Examples

The good news: With practice, you will gain the necessary knowledge, skills, and confidence to be able to successfully negotiate a job offer.

Remember, job offer negotiations can take place via phone, video conference, in person, or by email. Be prepared! To learn more, seek advice from your mentor to learn what is negotiable for your discipline in a select job sector (e.g., public, private, or nonprofit.) You might also watch video role plays and read sample negotiation scripts to gain an idea of how the process might work:

Managing Offers & Salary Negotiations by Swathmore College.

Getting what you’re worth by the American Psychological Association.

Salary Negotiation by California State University

31+ Killer Salary Negotiation Scripts by Lewis Lin.

5 phrases that will get you a higher salary by US News & World Report’s Money magazine.

Basic Negotiation Process

Negotiating a job offer takes a bit of patience and finesse. Here is the basic process:

  1. If the position seems right for you, conduct additional research to inform your strategy for negotiation. Estimate your fair market value and learn what may/may not be negotiable. Learn what you can about the company (e.g., current salaries, benefits, opportunities for advancement.) If the position is in the public sector, current salaries are most often publicly available.
  2. Set your goals for the negotiation.
    • Determine an acceptable salary range, rather than a specific dollar amount. The bottom number is the minimum salary that you will consider with good benefits; the top number is your aspirational salary goal.
    • Determine your “must haves” for indirect compensation and non-financial compensation – – the total compensation package.
  3. Let them make an initial offer. Never be the first to ask about salary and benefits! Listen carefully to what is said and how it is said.
  4. After receiving an offer say, “Thank you for the offer.” Think carefully before you respond. Refer back to your research notes, if necessary.
  5. What you say next is up to you.
    • If you wish to counter the salary offer, then do so. They may or may not counter offer in return.
    • If the offer sounds promising, ask about their total compensation package. Now is the time to get all of your questions answered!
    • Never immediately accept or reject an offer. You will need time to think critically about their offer, the job duties and the company culture.
  6. When it seems that you have reached a verbal agreement, ask for the offer in writing. Tell the person that you do not want to overlook details or misunderstand any provisions. Then ask for a day or two to review the details once you receive the offer in writing. Avoid asking for more than one week to consider an offer; if you do not accept, they will want to offer to another candidate who is waiting to hear from them.
  7. Once you reach a decision, call. Do not text or send an email unless specifically asked to do so. Your voice can convey sincerity much better than an email.
  8. If you decide that you cannot accept the position, remain polite and professional. Thank the person again for the offer, then decline with something like this:
    • “Upon careful consideration, I do not believe this position is a good fit with my interests and skills. I must decline your offer.”
    • “Unfortunately, salary is below what my research shows is a typical hiring range for this job title. I will not be able to accept your offer.”
  9. If you decide to accept the offer, say something like this:
    • “I am calling to accept your offer. Thank you for your willingness to work with me. I am anxious to join your team and start making contributions.”
    • “I am pleased to tell you that I accept your generous offer. I am convinced that I will be able to help you achieve the goals that we discussed in the interview.”

Tips:

  • If you accept or reject an offer too fast, you may make a decision you regret.
  • If you are indecisive and waste time, or ask for too much, you may lose the offer.
  • Stick with facts. Remain calm and polite. Keep your voice at an even tone.
  • Avoid emotional arguments e.g., your budget, bills, health, cost of living, lifestyle, or need to support dependents.
  • DO NOT feel guilty about negotiating a higher salary, especially when the offer is well below your targeted range.

Bottom line: Strive for a win-win solution. By working with the prospective employer toward a mutually-acceptable solution, you will get your relationship off to a good start!

What is Negotiable?

Truths:

  • At some organizations, job offers are not negotiable.
  • With some companies, benefits are set and only salary is negotiable.
  • In big business, especially executive positions, almost everything can be negotiated.

Knowing how to proceed can be a challenge.

However, according to several sources, many employers expect new hires to negotiate salary. Thus, salary is a good place to start. If you remain polite and professional, use data to estimate your fair market value, and stop when you hear “non-negotiable” or “final offer,” you should not offend anyone.

Rather than get off on the wrong foot with a prospective employer, learn what you can about an organization and seek advice from others.

  • Find the Human Resource page of the organization. Evaluate information on health/dental/life/accident/dependent insurance; retirement packages; holidays, vacation, and personal days; family-friendly policies (e.g., time for adoption, fostering, and child birth; eldercare); policies on leaves of absence; alternative work schedule; and other financial and nonfinancial benefits.
  • Ask your mentors about a particular company or organization. They will also know about the norms and nuances of your discipline.
  • Career service counselors are another good source of information about job offer negotiation with specific employers.
  • Use LinkedIn to find alumni and alumnae and alumnae already working for an company or organization. Unless they have signed a confidentiality clause, they might be able to shed some light on what may/may not be negotiable should you receive a job offer.

Government positions have set salary ranges and benefits are fairly standard for new employees.

Nonprofit organizations, depending on size and financial health, can be somewhat negotiable. National nonprofits and NGOs have more flexibility than local, grass-roots organizations.

In academia, recent PhDs have less “bargaining power” than experienced faculty. Unique to higher education are tenure-track appointments, with expectations for performance within a given time frame. Thus, negotiating items like teaching loads, partner accommodations, split appointments, lab space & equipment/start-up, student assistants, travel and professional development resources, service expectations, and summer salary are critical to finding early career success as a beginning faculty member. Consult with your primary advisor/mentor to avoid pitfalls!

With business and industry positions, how much is offered depends on the size, scope, financial health, and management philosophy of the organization. Depending on the position, benefits like profit sharing, car allowance, and child care may be offered. If so, be sure to calculate the monetary value of the added benefits. For example, if you are offered a position at $50,000 plus $25,000 in added benefits, the value of the total compensation package would be valued at $75,000.

Generally speaking, across job sectors, negotiable items may include:

  • Salary
  • Start up expenses (space, computers)
  • Travel funds for professional conferences
  • Memberships in professional societies
  • Alternative work schedule
  • Relocation expenses
  • Starting date

Budget & Cost of Living

Suppose you receive a salary offer of $60,000.

  • Will this be enough to pay all of the bills, student loan, cover emergency expenses, and enable you to start a retirement account?
  • If you move from the Midwest, will $60,000 have as much buying power on the East or West Coasts?

Before you can accept a job offer, you need to (1) create a budget and (2) determine if your cost of living may be higher or lower in a different geographic area.

1. Create a annual budget. If you have never created a budget before, it is fairly easy. Start with your actual monthly expenses. (You can make cost of living adjustments later.) Add projected future expenses e.g., student loan payments, insurance, or retirement savings.) Total the monthly expenses.  Multiply by 12. This gives you an estimate of your annual expenses for budgeting purposes. Example:

Item     Amount 
Rent & Utilities $
Groceries $
Transportation $
Insurance $
Clothing $
Student loan $
Retirement $
Monthly expenses $,$$$
Monthly expenses x 12 = Estimated Annual Expenses $$,$$$

Tip: You can find free budget templates in Excel. See our budget and loans page for more resources.

2. Determine the Cost-of-Living in a different area. If you are staying in the US, the Census Bureau provides data on cost of living and other facts about states and counties. You should also analyze available data from the local Chamber of Commerce, city government, or Convention and Visitors Bureau.

You should use more than one source of information to estimate your expenses. Probably the most helpful tool you can use will be an online Cost of Living Calculator, such as this one offered by CNN Money. By entering your current city, the amount you wish to make, and the city where you hope to live, you will get a comparable salary figure for that other city. Additionally, you also receive a breakdown of basic living expenses for that area. At a glance, you will know if your living expenses will be more, less, or about the same as where you currently reside.

Final Step.  Make adjustments to your projected annual budget, based on the cost of living calculation you made. If the costs will be lower, consider adding more to your savings line, or make an additional student loan payment. If your costs will be higher, then you may have to cut back on clothing or entertainment or seek a higher salary offer.

Keep in mind that an employer’s salary offer has nothing to do with your budget and expenses. Their offer will be based on the potential they see in you and how much they have budgeted for the position. If the fair market value for the position is far below your estimated expenses, salary negotiation may be a challenge. You may need to seek a position or company that pays more for a comparable job title.

Estimate Your Market Value

If you don’t know your own worth and value don’t expect someone else to calculate it for you.
                                                                                                         – Redshoemovement.com
Knowledge is power in the negotiation process.

In addition to learning all that you can about the organization, you need to estimate a Fair Market Value for the position you seek in the geographic area where the job is located.

Your aim is to determine a realistic salary range, rather than a specific dollar amount. For example, you might suggest a “salary range of between $60,000-70,000.” The bottom number is the minimum salary that you will consider with good benefits; the top number is your aspirational salary goal. Chances are, you will agree to a number somewhere in the middle if you have established a reasonable salary range.

Use credible data from several trusted sources to inform your negotiation strategy.

  • Analyze official government data.
  • Compare several salary surveys.
  • Investigate how much current employees earn (private companies are a challenge.)
  • Locate salaries for comparable positions in the same geographic area.
  • Obtain estimates from trusted mentors, alumni and alumnae and alumnae, and others in your discipline.

By comparing these sources, you will be able to to identify high and low salaries for the job title, industry sector, and geographic area.

Now consider how precisely your degree, disciplinary skills, and transferable skills match the job description. Have you completed specialized training or have directly-related work experience? Finally, consider how the current economy, supply/demand of workers and employment projections might impact a fair market value.

Does the salary range that you have established reflect a fair market value? If so, when you are asked, “How did you calculate fair market value for this position?” you will be able to share your data sources.

Illustrative Salary Databases

Note: Compare/contrast data from several sources. Critique sample size, data sources, & methods used in surveys.

The Dreaded Salary Question

You already know Rule #1: Never be the first to bring up salary.

Here’s Rule #2: Never ask for a specific dollar amount.

Why? You ask may be asking for too little or too much. By working within a reasonable salary range, you appear flexible and give yourself room for negotiation.

If you are asked, “What are your salary expectations?” you have four strategies for responding:

  1. Stall. Say, “It depends on several factors. May we discuss benefits first?”
  2. Redirect: “What is your typical hiring range for this job title?”
  3. Evade: “Thank you for asking. If my research is correct, it seems like a salary range of $ to $ is common for this geographical area. Is this true for your company/institution as well?”
  4. Be non-specific: “The job ad lists a salary range of $ to $. Based on my knowledge, skills and experience, I would like to be in upper end of that range.”

Job Negotiation Demo

Preliminary work: You have (a) created a budget and know your needs, (b) conducted thorough research on the company’s compensation/benefits/perks and (c) determined a fair market value(a salary range) for the geographic area. For this demo, the research documents a salary range of $50,000-60,000; you have selected a salary goal of $53,000 with an excellent benefit package.

Strategy: It’s easy to build negotiation skills by remembering the mnemonic L-T-R, which stands for Listen, Think and Respond:

  1. LISTEN carefully to what they say and how they say it. Be patient!
  2. THINK about what they offered and how well it matches your goals.
  3. RESPOND carefully, in a calm, polite and professional manner.

DEMONSTRATION:

Here is an example of how you might listen, think and respond during a job offer negotiation. 

Listen to the offer:  “If you are still interested in working with us, we are pleased to offer you $45,000.”

Think to yourself: This below my targeted range of $50-60,000. However, they did not say firm or final or non-negotiable.

Respond with something like: “I am pleased to have an offer and remain highly interested inworking with your team. As we discussed in the interview, I have directly-related experience and technical skills that will enable me to immediately make contributions to your company. Based on our discussion, I anticipated a higher salary offer. Are you open to a discussion about salary?”

[Say no more. Remain calm. Wait patiently. Observe facial expressions, eye contact, voice tone and body language for signs of anger or frustration.]

Listen for a raised offer: “We can come up to $48,000.”

Think to yourself: They are willing to negotiate, but the offer is still below fair market value. Because they did not say firm or final, I am going to try again.

Respond with something like: “Thank you. I appreciate your flexibility and willingness to work with me. However, I studied several databases that suggest entry level workers in this area with similar job titles are earning between $50,000-60,000. Would you be willing to work within that salary range?”

[Say no more. Remain calm. Wait patiently. Continue to observe.]

Listen for a raised offer:  “We can go to $50,000, which is at the top of our hiring range for this position. This is our final offer. It is non-negotiable.”

Think to yourself: They are no longer willing to negotiate salary. They have come up $5,000, which is a good sign they value my potential. Perhaps I can later negotiate (a) non-financial benefits in lieu of a higher starting salary or (b) the possibility of a performance raise after a 6-month probationary period. I should ask about benefits.

Respond enthusiastically with something like:  “Thank you very much! I respect your honesty and understand your need to stay within a certain range. May I ask you a few questions about your total compensation package?”

[The conversation continues until all financial and non-financial benefits are understood.]

Listen for closure: “It sounds like we are in agreement. Will you accept our offer of $50,000 with the benefits we discussed?”

Think to yourself: This has gone well. I want maintain a positive relationship, so I am not going to push them on salary at this time. I need time to think this over.

Respond sincerely with something like: “I appreciate your willingness to work with me and answer all of my questions. As you might imagine, I have a lot of information to process. Could I please have your offer in writing, so that I can make sure that I understand the total compensation package in its entirety?”

[Say no more. Remain calm. Wait patiently. Continue to observe.]

Listen for closure: “Normally we obtain a verbal commitment before drawing up paperwork. How soon can you let us know?”

Think to yourself: I have asked for something unusual. I want this job, so I need to re-establish trust with them.

Respond with something like: “Let me assure you that I am highly enthused about working here! I want to make certain that I listened well and understood everything correctly. I can get back to you right away – within a day of receiving the written offer. Would you like me to call you or do you prefer an email?”

Conclusion: HR experts suggest that job offer negotiations should be viewed as collaborative problem solving, rather than conflict resolution. Remember that this is the start of a promising work relationship, so aim for a win-win outcome. Always acknowledge the other person’s points and concerns. Remain polite and professional. Control your voice volume and tone and facial expressions. Avoid emotional appeals and assertions by offering data as rationale for a higher salary request. Good luck!

– 2015 copyright Robin G Walker, PhD

Making a Decision: 6 Steps

  1. Always ask for the offer in writing and time to respond.
    • Review the direct and indirect financial compensation, and nonfinancial compensation.
    • Make sure that you understand the job requirements and performance expectations.
    • Will you be reimbursed for relocation costs?
    • If you have unanswered questions, call back.
  2. Analyze the opportunities and drawbacks associated with the position and the organization.
  3. Determine if the annual salary is adequate for your projected budget, adjusted for the cost of living in that area.
  4. Weigh other factors that are important to you.
    • What are your “must haves?”
    • What concessions are you willing to make?
  5. Talk through your decision over with a partner, mentor, or other trusted person. Reflect on their comments and concerns (if any.)
    • Ask: What have I overlooked? Do you see any red flags?
    • Don’t allow others to make a decision for you or pressure you into a position that is not a good fit with your interests and skills.
  6. Even though you may feel a bit nervous, you will develop a conviction that your decision is the right one for you. Accept or reject the offer.

Questions to Ask Yourself

  • Will this salary pay my bills, cover emergency expenses, and allow for savings?
  • Do I embrace the organization’s mission? Is this a good place to work?
  • Am I passionate about this? Do I see myself as being happy and productive in this position?
  • What are the opportunities for promotion, conference travel, and professional development?
  • How will this position help me move toward my long-range, aspirational career goal?
  • Is this a good move for my family (e.g., job market, schools, medical services, work-life, etc.)?
  • Is the geographic area appealing (e.g., things to do, weather, transportation, safety, etc.)
  • What am I giving up? Will I have any regrets if I make this move?

Tip: If you are feeling a bit overwhelmed, it may help to place your thoughts in writing. On a blank piece of paper, draw a vertical line down the middle to create two columns. Label one column “Reasons to Accept” and the other, “Reasons to Decline.” Evaluate the total compensation package and other factors important to your decision. Make notes in the applicable column as you assess each factor. When you are finished analyzing all factors, compare the two columns.

– 2015 copyright Robin G. Walker PhD

Job Offer Advice (Sites)

Academic Job Offers 

Negotiating the Academic Job Offer (Humanities, Science & Social Science) from Yale University

Negotiating your first job offer, from Columbia University

Negotiating that first job offer from The Chronicle of Higher Education 

Evaluating Academic Job Offers & Negotiating Positions, from the National Institutes of Health

Negotiation 101 from Vitae

Business or Industry Job Offers

15 Rules for Negotiating a Job Offer from Harvard Business Review

Negotiating Employment Agreements: Checklist Of 14 Key Issues, in Forbes

Executive Compensation: Executive Negotiation Checklist from Salary.com

Negotiating a high tech job salary from Business Insider

Engineering Job Offers

Job Offers from the University of Texas at Austin

Negotiating the Offer from Dartmouth

Science Job Offers

Let’s Make a Deal: Six myths about job and salary negotiations and how they may hinder your ability to bargain effectively, from The Scientist

Tooling Up: Salary Negotiation, Part 1, from Science Careers

Tooling Up: Salary Negotiation, Part 2, from Science Careers

Tutorials & General Advice on Job Offers

Salary Negotiation and Job Offer Tools and Resources for Job-Seekers from Quintessential Careers

Job Benefits Comparison Worksheet from About Careers

Offer Evaluation Worksheet from Washington University in St. Louis