April 16, 2021


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How To Negotiate a Job Offer

Many people don’t like negotiating. You probably have a friend or relative who negotiates so often and hard that it makes you cringe. You may wonder why they spend so much time negotiating over discounts in supermarkets and department stores. But when it comes to a job, negotiations, particularly those for your first job, have effects that can last throughout your entire career. A study of the starting salaries of recently graduated MBAs from Carnegie Mellon found that only 57% of male graduates attempted to negotiate. Even more striking, only 7% of the female graduates attempted to negotiate. How much money are new workers leaving on the table? A recent study found that employers can typically increase their first salary offer by 5% to 10%. In the current economic climate, many new workers are simply happy to get any job. However, it’s important to remember that your first salary serves as an anchor throughout your entire career, and most workers’ salaries stagnate after the first 10 years, so your initial salary is extremely important.


In most hiring situations, the recruiter seems to hold all the cards. They seem to control the salary, benefits, and equity options and often have multiple candidates for the position. The only way you can turn the tables is by creating leverage through alternatives. Typically, this means applying for several jobs at the same time. However, options do not always have to be other offers. For example, your alternatives may be to continue your job search, continue at your current job, or go back to school. The most important point is to communicate your options so that the recruiter is aware that the stakes have been raised. A recruiter can always tell if you have options. If you’re confident in your options, they will feel it. And they will feel it too when you are desperate for a job.


In interviews, it’s easy to get wrapped up in the things that you want: a good salary, vacation time, health insurance, and other benefits. However, it’s important to emphasize what you bring to the company. This is particularly appropriate if you will be working in a revenue-generating department. Talk more about the company than you talk about yourself.


A common negotiation tactic is an appeal to a higher authority. You’ve probably experienced this when making a major purchase, like a car. The salesperson will often have to “talk to the manager” about any changes to the deal. Fortunately, you can use this tactic, too. There’s no need to get personal; just say that you have to discuss the deal at home before you make your decision. This way, it’s impossible for the recruiter to know who is really making the decisions.


When you’re close to accepting an offer but want to negotiate on one point, you can boil your request down to one sentence: “if you can get me X, I’ll accept the offer right away.” This phrase is effective for several reasons. It shows that you really want the job, eliminates more back-and-forth, and displays confidence. The recruiter has likely spent thousands of dollars during the recruiting process, and your salary will probably make up less than 50% of the costs of employing you after adding in overhead, taxes, and other expenses. The additional salary and benefits you ask for will likely only make up a small portion of the process. So always remember, there’s no harm in asking.

Also published on Medium.


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