When and How to Negotiate an Employment Offer

There is a lot of advice out there that says you must negotiate the terms of an offer of employment. While we agree that you should not be afraid to ask for what you want, we do not believe that negotiating an offer is the right thing to do in every situation.

If you’re working with a recruiter, you should be getting plenty of advice on whether to negotiate your offer, and in fact, one of the many advantages of working with a recruiter is that they can take the lead in advising and assisting with the negotiation process. If you’re not working with a recruiter, here’s our advice on some of the variables you should consider:

Why are you negotiating?

It has become common advice that you should always negotiate an offer, but that shouldn’t be your only reason for negotiating. Stop and ask yourself why you’re negotiating.

Maybe you believe your skills and experience support your request for more than your current offer, and your current compensation is higher than the offer amount. Perhaps you’ve done your research and your current offer is below the industry average for the position. You may also have multiple offers on the table with similar or higher salary and benefits packages. These are among the many reasons you may want to negotiate your offer.

How close is your current offer to your interests/goals?

Once you know you’re negotiating for the right reasons, ask yourself how close your current offer is to your interests and goals. In terms of cash compensation, is what you want grounded in reality? Have you researched similarly situated firms or businesses in town to determine what they pay someone with your experience? If you’re going to ask for more money, you better be armed with some knowledge.

Beyond the money, also ask yourself how this job fits into your future goals. Maybe only two firms in town have established practices in your niche and the question may be – do you really want to risk opening a dialogue that could be contentious?

Are there variables in the offer beyond cash (base and bonus) that you can negotiate?

If the offer is already close in terms of salary, and you’re just looking for a little something to sweeten the pot, perhaps consider negotiating for better bonus potential or benefits instead of an increase in salary. This can include: guaranteed bonuses at specified benchmarks, insurance coverage for a spouse or children, increased sick leave or vacation days, relocation/moving expenses, or even a signing bonus.

Was there a range of compensation in the position?

If the offer includes a range of compensation – from base salary to year-end bonuses to profit-sharing – negotiating the terms might make you seem greedy and may jeopardize your offer. Providing multiple avenues for you to increase your compensation package may mean that an employer has already gone through the work on their end to be creative and offer you as competitive a compensation structure as possible. These types of offers can be much more difficult – and risky – to negotiate.

Before you negotiate any offer, ask yourself if you’re willing to lose the offer. As you probably remember from your first-year contracts course, once you counter the employer’s original offer – or actually at any point prior to acceptance – that offer can be withdrawn.

Another point of caution: don’t negotiate an offer if you’re not willing to accept the new offer terms if the prospective employer ultimately meets your requests. You may burn bridges – and at the very least not appear to be acting in good faith – if you reject an offer after a prospective employer goes through the hoops of meeting all of your requests and demands.