When you negotiate a job offer, there are many parameters to take into account.
So, to ensure that you reach the best possible outcome, here are “8 Job Offer Negotiation Steps,” with tips on how best to complete each step.
NOTE: During an economic downturn, if you receive a job offer, you may not be as aggressive in your negotiation as you would be in a competitive job candidate market. However, there’s always something you can negotiate. For example: perks, job title, future promotion, 6-month salary review, and educational opportunities.
8 Steps to Negotiate a Lucrative Job Offer
- Research Salary & Bonus(es)
- Evaluate the Job Offer
- Determine Your Worth in the Job
- Identify the Negotiation Power Factors
- Determine What You Want
- Design Your Counter Offer
- Communicate Your Job Offer
- Negotiate Your Job Offer for a Win-Win
At Some Point You’ll Need to Negotiate a Job Offer
Every leader faces a job move that requires Job Offer Negotiation at some point in their career (and more likely, many times).
And, it may not occur to you, but even an internal move within your current company is an opportunity to negotiate any or all of the following: your new job title, salary, bonuses, and perks.
Therefore, we’ve provided this Job Offer Negotiation process to make sure you are prepared so that you don’t “leave money on the table” in your next job offer negotiation. And, know that we are here if you need support in negotiating your job offer. Usually, we are able to help our clients get 10-30% more, by helping them:
- Understand all the job offer elements they can request
- Understand the Power Factors that will support their counter offer
- Build their confidence to ask for what they’re worth
Additionally, we’ve also provided a Job Offer Negotiation Workbook to help you ensure you do everything you can to get more in your job offer.
Everything in a Job Offer is Negotiable
Almost everything in a Job Offer is negotiable: job duties, base salary, bonuses, signing bonus, benefits, stock options, and perks.
However, through the Job Offer negotiation process, you may not realize that you are able to shape and design the job and start to create a relationship with your employer, Human Resources, and hiring manager.
STEP 1: Research Salary & Bonuses
Research the Salary for the job in the applicable industry and geographical location. Search by state, and if possible, by city. You can use this data to back up your counteroffer during the job offer negotiation.
Also, look at GlassDoor.com or use your network (or LinkedIn network) to research what the specific company pays and what bonuses it has given in the last few years.
STEP 2: Evaluate the Job Offer
The next step is the process is to evaluate the Job Offer. Here’s the Job Offer Evaluation Table that we’ve created to help our clients evaluate their job offers against their:
- Current job
- Multiple job offers
There’s an Excel spreadsheet on this webpage you can download, as well, and a Job Offer Evaluation Example.
Comparing Job Offers in an Excel spreadsheet will help you ensure that you are including all benefits and perks in your comparison of two or more jobs.
It’s also important to try to compare “apples to apples.” One of the best ways to do that is to quantify your perks, e.g.:
- Working at home one day a week could be quantified by estimating the commuting costs that would be eliminated and the time you don’t have to spend commuting on a monthly basis.
- Calculate any extra costs you will incur due to the differences in health insurance. This can be very complex. Be sure to include the employee contribution, copays, coinsurance, deductibles, and the out of pocket max for all health insurance plans.
STEP 3: Determine Your Worth in the Job
In order to negotiate your job offer as successfully as possible, you will need to identify what differentiates you from other candidates. This may include strengths, resources, contacts, special knowledge, skills, and credentials.
- What special value do you bring to the position and to the company?
- How can you impact the bottom line?
- What can you do in the job that others in the position haven’t?
If possible, calculate how much money you attract or save for the company. This equates to what you’re worth in the job. Then, use all of this information in your counteroffer letter or counteroffer conversation.
STEP 4: Identify the Negotiation Power Factors
Power Factors are outside forces and situations that may impact the power either party in a negotiation may have. It is smart to evaluate the power factors impacting your Job Offer negotiation so that you can leverage them and so that you can know how hard to push to get what you want. We have provided a Job Offer Evaluation Table for your use in evaluating the Power Factors involved. See the table below.
|Business Climate Factors
|Overall state of the economy
|State of the industry
|Business Cycle (startup, growing, stable, turnaround)
|Hiring Manager Factors
|Urgency to fill the position
|Technical expertise, unique knowledge
|Resources (finances, professional network)
|Competition from other candidates
STEP 5: Determine What You Want
Next, you will need to determine what you want in terms of salary, benefits, and perks. Base this on your research of what salary averages are for your area, job title, and industry and what the specific company pays. Use the List of Possible Job Offers Salary, Benefits, Compensation & Perks to ensure you do not forget about something that you would find beneficial in the offer. There are 54 different possible types of compensation, benefits, and perks on this list.
STEP 6: Design Your Counteroffer
Counteroffers are a common part of many negotiations, so remain flexible. Also, know that every company is different in a negotiation. Some may have no leeway to change the offer, where others are very flexible and creative in meeting their candidates’ wants and needs.
Smaller companies may be more flexible and large companies may be bureaucratic, and therefore inflexible. Unionized companies usually have very little room for individual negotiations.
Many companies expect you to negotiate, and if you don’t, they may lose some respect for you. Especially, for positions in sales and management.
Also, very infrequently, but it has happened, a company will withdraw an offer if you offer a Counteroffer. We think that this is a red flag for working at that company. But you have to decide for yourself based on your situation if it’s worth the risk.
STEP 7: Communicate Your Counteroffer
Next, communicate your counter offer either verbally or in writing and give your rationale for why you are worth what you are asking for. We have an example of a Counteroffer Letter, with a format we think is effective:
- Express your interest in working for the company and doing the job
- Outline your differentiators, value and any other rationale for your Counteroffer, and list what you want.
Furthermore, if you are making your counteroffer verbally, we believe a similar format would be effective.
STEP 8: Negotiate Your Job Offer for a Win-Win
Finally, do not use strong-arm tactics or seek a win/lose. This is a business transaction and the best and most sustainable business agreements are win/wins.
In a negotiation, you and the company are designing the terms of the business transaction and you are both seeking maximum benefit from the final agreement.
Be creative. Remember, all the different components of your offer come from different budgets. It may be easier for them to access funds from one budget than another. Also, some elements of your offer cost the company (more or less) so they may choose to offer you one element instead of another. For example, giving you company product, services or stock options may be less expensive, dollar for dollar, or may be under a different set of rules for the company than giving you a higher salary.