4 Rules for Negotiating a Job Offer

Getting a job offer is a very exciting time. It often comes as a huge relief after a prolonged period of emotional and financial stress for you and your family. It feels like massive weight has been lifted from your shoulders. This is one of the reasons why so many of us mishandle this very important final step in the job search. We so badly want to secure the job that we are afraid to do anything that might make it go away. We rush to get the deal closed as quickly and quietly as we can because we just can’t bear the thought of screwing it all up at this point. It’s a completely understandable fear. Understandable … but unwarranted, and very bad for your career.

As a hiring manager I have the opportunity to make job offers all the time. I’ve also received a few offers myself over the years. I’m surprised how consistently candidates either don’t negotiate at all or approach the offer negotiation stage without a proper plan. If you’re not completely comfortable with negotiations – don’t worry, you’re definitely not alone. Here are some tips I’ve used over the years to get the most out of job offer negotiations without putting the offer itself at risk.

Let’s start by making one very important first point: You should be negotiating 100% of the job offers you receive. There is no scenario where not negotiating is ok. I realize it can be easy to convince ourselves that negotiating adds risk or might offend the future employer, and a host of other reasons to avoid it – but they are all wrong. You need to negotiate your job offer. There are two major reasons why this is the case. Reason number one is that if you don’t negotiate, you’re virtually always accepting the employers low ball offer. I can’t tell you how many times I’ve said something like, “Ok so we’ll offer 65K and take 70K if she counters …” Basically every offer is made with a contingency buffer of 5%-10%. You need to take advantage of this buffer or you’re just leaving free money on the table. The second reason you should always negotiate is that not negotiating sends a very bad message to your prospective manager. As a hiring manager, I want my future staff members negotiating – it tells me they are serious professionals who know how to communicate their value and have the strength to fight for it. There are so many practical applications of negotiation skill in almost any job whether it’s negotiating priorities with internal teams or negotiating terms with a vendor or customer. Negotiation is just a basic professional skill we all need to develop. In fact, each time I make an offer and the candidate doesn’t negotiate, I worry if I’ve hired the wrong person. That may sound a bit harsh, but it’s true. The good news is if you negotiate correctly, you introduce almost no risk into the equation and reap all the benefits.

Here are 4 basic rules I use to guide my job offer negotiations. Try them out next time you have the chance.

1.    Keep it friendly and constantly reaffirm interest.

I first learned this valuable lesson when I was travelling in Egypt and Morocco after university. The market vendors there have a magical way of negotiating extremely hard but making you feel good about it the entire time. A practical lesson you can take from that is to constantly reaffirm how excited you are about the job while you’re asking for better compensation. By contrast, one thing you should never do is use feigned reluctance as a bargaining tool. “Playing hard to get” is one of the absolute worst things you can do when negotiating an offer. When I counter an offer I find several occasions to reiterate just how much I want the role and just how perfect I think I am for the job. And I never use ultimatums. You want to create an image in the mind of the employer that this is the perfect match for both parties and all that stands in the way of a win-win is a small concession. If you keep negotiations positive and avoid presenting ultimatums or binary decisions you never have to worry about the offer being pulled. This is vital to being able to negotiate with confidence.

2.    Always present a package of options.

Most compensation packages have several components to them and most employers have a variety of vehicles by which they can affect compensation. It’s a mistake to fixate on any one offer component when you negotiate. Too many of us focus too much on base salary. For example, we will respond to a base salary offer of 50K with a base salary counter of 55K. The problem with this approach is twofold. First off you haven’t provided a very good opportunity for a win-win resolution to the negotiation by framing it as a binary decision i.e. either you give me exactly what I want or you don’t. And secondly you aren’t giving the employer enough flexibility to be able to easily accommodate your request. By making the offer decision binary you’ve painted the employer into a corner. This is level one negotiating. Level two negotiating is about creating a package of negotiation points so the employer can pick and choose and customize a revised offer that gives everyone a chance to win. For example, rather than the counter a base salary of 50K with 55K, I would say something like:

Thank you very much for the offer. I am extremely excited for the opportunity to work with the company and I’m confident I can make an immediate and positive contribution. In terms of compensation specifically, I’m hoping we can find a way to create a package that is more in line with my skills and experience, and that can work for everyone. I would very happily execute an offer that contained the following amendments:

  • Base Salary: $52,500
  • Annual Performance Bonus: $5,000
  • Sign on Bonus: $2,500

By presenting a package like this you've done a bunch of very good things. First off you’ve given yourself a chance at the home run i.e. that they give you everything you’ve asked for, which in this case goes far beyond the 5K increase you would have otherwise requested. Secondly most of the increase you've asked for is in the form of bonuses which are contingent on you achieving a certain level of success. This takes the risk out of the equation for the company and gives you the chance to earn more money. Lastly, this gives the employer the chance to reject parts of your counter while still giving you a win i.e. They can reject the sign-on bonus and the base salary and you still end up with 55K or they can reject the performance bonus and you also end up with 55K. There are many more paths to success with this approach. One final detail to mention – notice in my example message that I don’t position this counter offer as an ultimatum. I only say how happy I would be execute the offer if certain things were amended. I make no mention at all of what I might do if they don’t acquiesce. This allows me to stay confident in my negotiation strategy and not worry that they might walk away. My worst case in this scenario is that they’ll say no to the changes I proposed and I’ll have to stick with the original offer. Whereas if I had framed it as “I can’t accept this offer because of xyz,” I’d be introducing a bunch of risk into the equation unnecessarily. Stay positive and don’t make ultimatums.

3.    Never … ever negotiate vacation time.

I won’t spend too much time on this one but it’s something I feel quite passionately about. You are much better off negotiating for more salary or bonus or stock options than negotiating on vacation. People who negotiate for more vacation send a very clear message that have a poor work ethic. I’ve had several occasions where I chose one candidate over another solely based on this point. Do not, under any circumstance negotiate your vacation time – find something else to ask for.

4.    Don’t negotiate live or over the phone.

This is another one I personally feel strongly about though I’m sure some people may disagree. I never negotiate live or over the phone if I can help it. The reason is I want to think very carefully about everything I say and ask for. I want the benefit of time to consider an offer before countering and to craft my response in the best way possible. Having to respond in real time presents too many opportunities for mistakes and doesn’t give me the time I need to build a thoughtful counter offer. If I’m presented with an offer in person or on the phone I’ll just politely ask for 24 hours to speak to my spouse about it and then respond via email later. An important point here is that I don’t ask for time to “think it over” because that sounds too negative – like maybe I don’t want the job after all. I prefer to ask for time to speak with my family about it because that is a perfectly reasonable thing to request and sends no negative message whatsoever.