Salary Negotiation

job offerMost of us don’t negotiate salary on a daily basis so even the most seasoned negotiators get nervous. Employers will only retract an offer if your counter is outlandish compared to the initial offer or if you are pushy and unprofessional. NOTE: Remember they want you! So, they are going to do everything they can to make it work! Remember that many employers expect you to negotiate and will not fault you for doing so.

 

To Learn more about the art of salary negotiation check out the online course offered through our interviewing module Big Interview

Key things to remember:

Be prepared! Know your worth! Many employers will ask on the application/cover letter or in the initial phone interview. HR recruiters are calling candidates out of the blue and having an interview on the spot. If that happens to you and you choose to continue with the interview, make sure you are prepared and know how to handle the salary question. NOTE: You can absolutely tell the recruiter that it is not a good time to speak and ask if you can set something up for the next day.

When you are in the process of searching for a job you should make sure you do your research before even applying for a position.

Check out these web resources for salary information for your occupation.

What do you need? Know your fixed costs before you even have the interview. How much do you need to pay your bills? NOTE: We have some great resources in the Career Center to help you to figure out your fixed costs.

Here are some examples of fixed costs:

  • Rent/utilities
  • Haircuts
  • Food
  • Loans
  • Phone
  • Car/insurance/maintenance
  • Gas
  • Savings
  • Fun/Miscellaneous

Get it in writing! Never accept a verbal offer. This is usually sent to you via email in PDF form or via snail mail. Even if you have a phone conversation, make sure you reply with any counter offers in writing.

Ask for time! Here is your first step to negotiation. Ask if they will give you five business days to review the offer. If they say within two days, ask for four days and work your way down from there. This is the first part of negotiation! If you definitely want to take the job sooner than their deadline you can say, “Would you consider a one-time signing bonus if I let you know by tomorrow?” NOTE: This can be done if they are also unwilling to move on the salary.

Know what the whole offer is! This is otherwise known as your total compensation package, which is so much more than just your salary alone. Does the salary reflect your skills and education? Make sure you look at vacation/flex time, sick leave, retirement contribution/401K/IRA, medical/dental/vision insurance, professional development, education reimbursement, computer/cell phone/data plan, etc. 

Know what you bring to the table! This is where you remind the employer of your assets/accomplishments/skills.  Your aim is to negotiate for something closer to what you had in mind.

In the negotiation process there are many things to consider. Here are some different Salary Negotiation Techniques and Scenarios that you may encounter and some suggestions on how to handle them.

Differentiate between Can’t and Won’t. Some employers can’t increase the starting salary due to budget or other restrictions. Others won’t maybe because they think you are not worth more. Show them why you are worth more!

You can use the signing bonus if they are unwilling to move on the salary. You can also suggest a six month review at which time if you meet their expectations for the position, you would be bumped up to $X.

Sample Outline of a Counter Proposal Letter

If you communicate better in writing, draft a counter proposal letter to maximize your likelihood of successful negotiations.
 
First Paragraph: Statement of interest and enthusiasm for job/company; key selling factors

  • This paragraph is critical in setting up the tone and direction of the negotiations. Be direct and sincere in expressing your interest for the company, thanking the employer for the job offer. Be sure to follow-up with your key selling points – how you will make a direct and immediate (and longer-term) impact on the organization.

Second Paragraph: Negotiating Item #1 – Offer and Counter Proposal

  • Restate the particular point from the original offer that you wish to negotiate, followed by your counter proposal – ideally supported through research, a desire to be fairly compensated or reinforced by the value you will bring to the company.

Third Paragraph: Negotiating Item #2 – Offer and Counter Proposal
 
Fourth Paragraph: Negotiating Item #3 – Offer and Counter Proposal
 
Concluding Paragraph: Conciliatory comments with strong moving-forward statement

  • Stress that your requests are modest and that your potential impact is great – and that you look forward to accepting the job offer and getting a jump-start on the position as soon as possible.
  • You can also include paragraphs for items of the original proposal that you completely agree on – doing so makes the letter seem more balanced and that you are not picking apart the entire offer.
  • You can also include paragraphs for any items in the offer that you need clarification – or where you are seeking more information, typically for complex issues such as confidentiality and non-compete agreements or bonus plans.

Source: Adapted from Quintessential Careers, Job Offer Too Low? Use These Key Salary Negotiation Techniques to Write a Counter Proposal Letter by Randall S. Hansen, Ph.D.

Sample Counter Proposal Letter

Mr. Frank Ian
Director, Industrial Systems
General Electric Company
41 Woodford Avenue
Plainville, CT 06062

Dear Frank:

I am excited about the offer you extended on _______ and look forward to accepting it. I feel confident I will make a significant contribution to the growth and profitability of General Electric’s Industrial Systems division over the short and long term. The terms you have described in the offer are acceptable. However, I would like to propose the following:

Base Salary: $55,000 per annum
The research I’ve done on comparable salaries and cost of living differences between Clemson and Plainville show that a base salary of $75,000 would be the market value of my experience for this position. The current offer of $55,000 would result in a dramatic reduction in living standard. Based on the above, I would like you to consider as a compromise a base salary of $65,000.

Bonus Opportunity: 3% of quarterly team results above stated quotas
Because I expect to have an immediate impact on both cost-savings and increased sales revenues, I would like to suggest increasing the bonus percentage 6% of results above quota.

Relocation Package: GE will compensate up to $10,000 for your reasonable costs incurred for relocation to Plainville, CT. Furthermore, GE will provide temporary living assistance and reimbursement for any commuting for up to 6 months from date of hire. I feel your relocation package is quite generous and I appreciate the company’s policy.

Stock Option Plan: developed and implemented after 1 year of service
If this policy is standard for all employees, I can accept it, but again, I am convinced that I will make an immediate impact on a key division of GE, and I would like to see the stock option plan developed in the first six months of employment.

Benefits Package: standard employee benefits package
In discussing the standard benefits package with Jim Cline in HR, I am quite pleased with the
GE benefits package. I would only ask that the waiting period for these benefits be waived.

Start Date: July 15, 2006
I am actually available to start to telecommute as early as next week — as soon as we agree on the final aspects of the offer.

I look forward to discussing the above terms with you personally. I am confident we can reach a mutually agreeable offer. I am prepared to hit the ground running as part of the GE Industrial Systems team.

Sincerely,
John Green

There are many nuances to negotiating your salary or a promotion. We suggest you come into the Career Center for assistance, as each situation is different.
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