Job Offer Negotiation Process
Everything is Negotiable
You may not know this, but everything in a Job Offer is negotiable: job duties, base salary, bonuses, signing bonus, benefits, stock options, and perks.
During the Job Offer negotiation process, you are able to shape the job and start to create the relationship with your employer, Human Resources, and the Hiring Manager.
STEP 1: Research Salary & Bonuses
Research the Salary and bonus(es) (if applicable) for this job in the industry and geographical location (at least state and if possible city).
And, look at GlassDoor.com or use your network (or LinkedIn network) to research what the specific company pays and what bonuses it gives.
STEP 2: Determine Your Worth in the Job
- What differentiates you from other candidates: strengths, resources, contacts, special knowledge, skills, credentials (here’s an example of some Differentiators for a Marketing Job Candidate)
- What special value do you bring to the position and to the company
- How you can you impact the bottom line
- What can you do in the job that others in the position haven’t
STEP 3: Know the Power Factors that Impact the Negotiation
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 Power Factors Evaluation Table for your use in evaluating the Power Factors involved.
|Factor||Your Favor||Their Favor|
|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 4: Determine What You Want to Ask For
Next, you will need to determine what you want in terms of salary, benefits, and perks, based on your research of what salary averages are for your area, job title, and industry and based on your research into 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 5: Communicate
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 Counter Offer Letter, with a format we think is effective: express your interest in working for the company and doing the job, outline your differentiators and value and any other rationale for your Counter Offer, and list what you want. If you are making your counter offer verbally, we believe a similar format would be effective.
STEP 5: Consider the alternatives
Counter offers are a common part of many negotiations, so remain flexible. Also know that every company is different in a negotiation, and 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.
Also, know that many companies expect you to negotiation, 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, that a company will withdraw an offer if you offer a Counter Offer. We think that this is a red flag for working at that company, but you have to decide if it is worth the risk based on your situation.
STEP 6: Negotiate for a win-win
Do not use strong-arm tactics or seek a win/lose. This is a business transaction and the best and longest sustained 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 these 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. For example, giving you company product or services or stock options may be less expensive, dollar for dollar, for the company than other elements or be under different rules.