How to Negotiate a Salary Counter Offer for a Job
What's the best way to negotiate a counter offer when you're not thrilled with the job offer you received? How much leeway do you have when you get a job offer? What's the best way to make a counter offer? When should you stop negotiating and accept or reject a salary offer?
These are great, and challenging questions. It's wonderful to receive a job offer, but less wonderful if the salary or rate doesn't match your expectations or requirements. So when you find yourself with a surprisingly low offer — or simply feel you deserve better or could get more — it's only reasonable to consider negotiating your way to a better salary.
What is a Counter Offer?
A counter offer is an offer made by a candidate in response to a salary offer from an employer. A counter offer is issued when the job offer presented by a prospective employer isn't considered acceptable by the applicant.
An employee might also issue a counter offer to their current employer if they are awarded a promotion and don't agree with the new compensation offered for accepting that position.
A counter offer can also be made by a company when they learn that a valued employee has received an offer from another organization. In this case, the employer would offer more money or other incentives for an employee to stay with the company.
When considering a counter offer, there are several things you can do to increase your odds of getting more pay, and a few things that could stand in your way.
Research salary ranges for your desired position
Know that greater than 50 percent of employers expect to negotiate for entry-level job salaries
Understand that employers will offer the lowest pay they think you'll accept
Consider how much you need or want the job, market rates, other opportunities, and the current job market
Focus on facts, such as the value you bring, rather than on emotions
Be prepared to ask for other benefits if a higher salary isn't an option
Rely on your gut feeling or financial needs when choosing your counter-offer range
Set the bottom of your range lower than what you're willing to accept
Negotiate too aggressively or they'll rescind the offer
Expect to get more if you're not willing to ask
Negotiate just for the sake of negotiating
Make a bluff if you're not really willing to walk away
Should You Make a Counter Offer?
A CareerBuilder survey reports that over half of workers (56 percent) don't negotiate for more money when they are offered a new job. The reasons include not being comfortable asking for more money (51 percent), worrying that the employer will decide not to hire them if they ask (47 percent), or not wanting to appear greedy (36 percent). A Glassdoor survey reports that women are less likely to negotiate compensation than men, with two out of three women (68 percent) not negotiating pay compared to about 52 percent of men.
Even though many job seekers aren't comfortable negotiating, many organizations do expect candidates to make a counteroffer.
Fifty-three percent of employers say they are willing to negotiate salaries on initial job offers for entry-level workers, and 52 percent say when they first extend a job offer to an employee, they typically offer a lower salary than they’re willing to pay. So there is room to negotiate for many candidates.
How Much Compensation to Target
You don't need to mention in the email how much more money you're hoping to make – that discussion will unfold after the hiring manager sees your email and agrees to schedule a meeting or a phone call. (Hopefully. More on the other possibility in a moment.)
Ideally, you'll have set your target salary range before the first interview, but if you haven't, there's no better time than the present. You want to have a good idea of how much you're hoping to get – and willing to take – long before you start negotiating in earnest.
Research is crucial for this. Don't make the mistake that many job seekers commit where they set their price based on a gut feeling or financial obligations that need to be fulfilled. By doing so, you could either be pricing yourself out of a job you want or selling your skills far shorter than necessary.
Instead, research salary ranges for the exact job title and duties, as determined by the job description and what you've learned during the interview process. There are a lot of online tools that can give you a sense of what's reasonable. For example, the salary information site PayScale.com will create a free report for you, based on your answers to survey questions about the job you're targeting, your experience, skills, education, and geographic location.
Finally, don't set the low end of your range lower than you'd like to accept. Hiring managers have a budget, and may even get bonuses for keeping costs low.
They'll often offer you the lowest number they think you'll take – not because they want to low-ball you or devalue your skills, but because it's their job to stay on target, budget-wise, as well as hire good candidates.
What Can Happen When You Counter Offer
But while you can negotiate, it's possible that the employer might rescind the job offer if you do so too aggressively. Some employers aren't thrilled with candidates who go back and forth over salary offers multiple times. Also, there may be a set salary range for the position and there may not be much room for further negotiations.
It's possible the negotiation process could leave both you and the employer feeling frustrated and disenchanted. In an ideal world, this situation won't arise, because, during the interview process, you will have gotten a sense of what the company has in mind for a salary, and made your salary expectations clear.
Of course, it's also possible that the negotiation process will go smoothly, resulting in a counteroffer that's everything you want, and is acceptable to the hiring manager and company as well. When you are deciding whether or not to negotiate a counter offer, keep these considerations in mind: the salary conversations you had throughout the interview process, the market rate for the position, your current salary, how much you need this job, the availability of similar positions, and the job market in general.
If you feel that as a candidate you deserve more, and that your expectations are reasonable based on the position and industry, use the tips and strategies below to negotiate a counter offer.
How to Negotiate a Counter Offer
If you have received an offer that's not what you expect, you do have a few options:
- Ask if there is any flexibility in the starting (or future) salary
- Consider perks you may be able to negotiate in addition or in lieu of salary
- Turn down the offer, realizing that the company may not make a counteroffer
- Create an opportunity for more discussion
One of the best ways to open discussions after you have received an offer is to ask for meeting to discuss the offer.
Tips for the Negotiation Process
While we have mentioned a lot of reasons to be cautious while negotiating, it's also good to remember that if you don't ask for something, you generally won't receive it. It is possible that the company has more money available for your salary (and in fact, they may expect a certain amount of negotiation to take place, and have crafted the offer accordingly).
Here are some tips to consider while negotiating a counter offer:
Know Your Value and the Industry Rate for Your Position
The best negotiation tactics are rooted in facts, not emotion, so spend some time researching. When negotiating your counteroffer, you'll need to make a case for why you should receive a better offer. This case will be built on your value: You'll want to remind the employer of why you're a particularly good match, offering experience and know-how that other candidates do not. (Most likely, employers would prefer not to restart the interview process; they picked you for a reason!)
As well, you'll want to let employers know about the market value for the position. You can mention the salary range for similar positions at other companies. Here is how to research a company, and here are salary calculators to help you know industry rates.
Don't Rush It
Since you need to have a lot of information to make a reasonable counter offer, it's worth taking some time before you begin negotiations. Start by sending a thank you note for the job offer, and establishing a timeline for when you'll be in touch.
Don't Forget Non-Salary Benefits
Before you crumple your offer letter into a ball, look beyond the salary. Perhaps you get other benefits and perks (such as tuition reimbursement, the ability to work from home a week each month, etc.) that make up for the lower salary. Or, if you don't, perhaps there are some non-salary benefits that you could ask for that would make the lower salary more palatable. You can ask for a signing bonus, for health care coverage to begin immediately if the company has a 30-day period waiting period, additional vacation days, coverage of your moving expenses, etc.
Don't Push Too Much
Think about why you're negotiating—is it because you genuinely think that the position merits a higher rate, or are you negotiating for the sake of negotiating? If you are comfortable with the offer, you might not want to push too hard just to get a little more. The very best job negotiations end with both employee and employer happy with the resolution.
Don't Say Too Much
There are some things that won't help your case when you're negotiating salary. Here's a list of what not to say when you're discussing salary with a prospective employer.
Know What's Really Important to You
You're going to negotiate differently depending on your circumstances. Getting a job offer after you've been unemployed for a year is different than an offer when you're employed at a tolerable job. Don't bluff if you are not actually willing to walk away from the job offer. But if you are lucky enough to be considering two job offers, do use that to your advantage.