When An Offer Is On The Table
Salary negotiation is a skill everyone should have. Whether you are negotiating on behalf of a company, or for yourself as a candidate, the end goal is to walk away feeling like nothing was left on the table. At the same time, it’s a delicate art, usually more emotional than expected, and pushing too hard can backfire to unpleasant results. I was recently asked for advice on dealing with salary negotiations by a former colleague, and decided to share openly.
Know your bottom line. In law school I took a course in Business Negotiation, and part of the little information we were given about our assignment scenarios was our clients’ bottom line. This is the least we could accept and keep them “happy”. This would also get you a C grade. Your bottom line is not where you want land, but you need to know where you are willing to land. On the company side, this line will likely take the form of a budget max, which they do not have the resources to push. For a candidate, this is the minimum overall compensation package you would accept, and anything less, you walk. It is the difference between what a company can do and what they want to do. And for a candidate, the difference between what they need and what they want.
It is important to share this crucial information early on in the process, on *both sides*. Since a bottom line is non-negotiable, having this information will save everyone wasted time and headaches. Because of the relationship that is being formed (California is an at-will employment state), it is much better to lay cards on the table, unlike in a business negotiation with a binding contract.
Ask Why. If the company is considerate enough to propose a salary or range, ask them to explain how they got to that number. It will help set the tone of transparency and fairness. Are they following market rates? Trying to maintain a status quo within their team? There could be any of several reasons why a company has set their salary range. One motivation they probably don’t have is trying to underpay you and get you hired for as little as possible. The reason being, employees who feel underpaid don’t work as hard, or stay as long. Seriously, salary range usually has very little to do with you, and everything to do with them.
Know your worth. When you counter, know why you are asking for that amount. Look to factors like years of experience, skill set (relevant to the role, as well as extras), leadership experience, education (degrees and otherwise), current salary, etc. As someone who gets to be a part of negotiations, I can say that there is nothing more annoying than an arbitrary counteroffer, “just because.” Be careful about pushing just to see how much you can get. This method will backfire as often as it will work. **Use resources like LinkedIn and Glassdoor to gauge what is "reasonable", if that information is available.**
Be flexible. Remember that a compensation package is just that, a package. Don't get hung up on salary and miss out on other valuable aspects of the offer. Is your commute improving? Are you getting considerable equity or bonuses? Have they offered valuable perks like commuter benefits, in office meals, cell phone reimbursement, etc.? All things considered, you might take a lower base and end up with more than you would have by taking the offer with a bunch of cash on the table.
Don't sell yourself short. Refer to the above, and if you are losing out on any valuable perks or benefits, it is completely reasonable to ask for some balance in salary. And again, by starting the process with a conversation about compensation, you will feel more in control when it is offer time, and less like you’re being taken advantage of.
Happiness is worth its weight in gold. If you are trying to get out of a yucky situation, it might mean taking a pay cut, and that is ok. If you are in it for the long haul, most salaries are reviewed annually so you'll get back to where you were, and smile a lot more while you're doing it. In the same vein, if you're happy and being recruited, you should expect a slight bump in exchange for the inconvenience of changing companies. But avoid regret by turning down your dream job over negligible cash.
Final thoughts: The offer phase is super emotional! This is the case for everyone involved. I have seen the way feelings are hurt - pride insulted, and nerves ground - from hiring managers as well as candidates. From the recruiter position, we’re in the middle, trying to find the place where everyone is happy. So trust us! And even if you weren’t actively recruited, don’t feel like you can’t reach out to your recruiting contact for some honest advice. A short term hire can be worse than no hire, so we’re pretty thoughtful.