Negotiating the offer
Congratulations! You’ve got a job offer on the table.
In many cases an employer will make a straightforward offer and you will be inclined to accept it without question; however, there will be occasions when you may wish to negotiate the precise details of their offer. If you’re unprepared, this can be a difficult stage to handle. If you’ve done your research and thought the matter through, your end goal is now very much in sight.
The package
There’s a reason this chapter is called negotiating the offer and not negotiating your salary. That’s because, depending on your circumstances, there could be a whole horde of other factors you need to take into account besides just your salary.
- Cash: bonuses; profit share; commission; overtime; staff discounts.
- Time: holiday allowance, time off in lieu
- Sickness: sick pay
- Car: company car, car allowance, car insurance
- Training: training opportunities, training allowance
- Medical benefits: private health insurance, dental plan, health club membership
- Pension: pension plans, pension contributions
- Childcare
- Share options
- Termination: notice period, gardening leave, non-compete clauses
In most cases, salary will be the most important item on your list and will be the main focus of this chapter, but you mustn’t lose sight of other factors which constitute the total package. Depending on the nature of any extras, they could make a relatively low basic salary seem much more attractive.
You should also take into account the effect this job is going to have on your CV. If it’s going to help you develop in ways that will be of significant value to you in your next job (and will consequently boost your next salary package), then you may be prepared to accept a lower offer in order to secure the job – maybe even lower than you are currently earning.
Market research
The very first step you should take (and should have taken long before a formal offer comes your way) is to research the kind of package usually offered for the type of position for which you are applying. To put it another way, you need to establish your market value. It is vital for you to have a realistic idea of what you should be worth to the employer. Ideally you have this before you even start looking for jobs.
If you’re working with a recruitment consultant, they can normally help you with this. However, there is plenty of information to be gleaned through looking at other job adverts and by checking online.
Once you’ve established a range for your market value, you need to decide:
- What is the minimum that you would be prepared to accept, assuming the job is suitably attractive?
- What is the maximum you can reasonably expect to achieve without breaking the deal?
Only you can decide what the minimum is that you would be prepared to accept, but your research should make it clear what the maximum is that you are likely to achieve.
The salary question
Although you will need to be specific as to your requirements, it is important (with a few exceptions, e.g. sales and other money-driven and largely commission-based roles) to convey the impression that money is not the only deciding factor in your choice of new job and new employer. Instead, your emphasis should be on politely but firmly conveying that you are aware of your value and that you feel it is only appropriate that you should be remunerated accordingly.
If the prospective employer makes the first move
In most cases the prospective employer will make the first move and tell you what they are prepared to offer. This has both advantages and disadvantages. The main advantage is that the company has shown its hand and you now know how close to (or far from) your own expectations their expectations are. The main disadvantage is that if the offer isn’t sufficient then the onus is on you to make the next move.
If you are expected to make the first move
If an employer makes no specific offer but asks you to name your price, then they’re putting you on the spot.
Your approach should be to try to identify whether or not they at least have a salary range in mind. An employer will normally have established such a range but, if challenged to reveal it, will probably err on the side of caution, so don’t be immediately disappointed if your salary requirements exceed the range quoted.
The next move
Regardless of how the negotiations kick off, you should be aiming to pitch for a salary at the top end of the range and, consequently, be prepared to negotiate and reduce that figure as necessary in order to reach a compromise. This is a standard haggling technique. Start high and be prepared to come down.
Bargaining strategies
The most important bargaining strategy at your disposal is to play this employer off against others. Politely point out that you have applications in progress for other roles where the packages offered are more in line with your requirements, and that you would naturally expect this employer to be able to at least match these offers, if not improve upon them. Whether or not you have firm offers from anyone else is, to a degree, beside the point; the point is to reiterate your market value to the employer and to establish that you expect to receive what you’re worth.
If you’re unable to adopt this strategy, then your next best strategy is to come clean and state the market research you have undertaken, give the employer the salary range you have identified and then make your case as to why you feel the high end of that scale best reflects your worth.
If you’ve reached this stage, then you’ve clearly already made a strong case at interview, and the employer now wants you. This is to your advantage. However, you may still need to make a final pitch to secure the level of salary you desire.
Reaching agreement
Once you’ve both got your cards on the table, a discussion may follow, and it may take compromises from both of you in order to finally reach agreement.
There are so many different ways in which this conversation could unfold that it’s impossible for me to provide you with a precise winning formula. For a start, you may be negotiating in person, via a recruitment consultant, by telephone or even in writing.
TOP TIP
Whatever happens, keep your cool and maintain a professional detachment. Don’t let the discussions become heated, and demonstrate to the employer that you are willing to work with them to reach a mutually beneficial agreement. The confident manner in which you handle the negotiations may be sufficient grounds alone for the employer to feel you warrant more than their original offer.
The worst-case scenario
Usually there’s nothing to be lost in attempting to negotiate a higher salary than the employer originally offers. Provided you handle the proceedings in a diplomatic fashion, the worst possible outcome is likely to be that the employer sticks to their guns and refuses to contemplate a higher offer. However, having come this far (recruiting is an expensive process) most employers will usually display at least a little flexibility. If they do refuse to budge then it’s up to you to decide whether or not their offer is sufficient or whether you will have to reject it. Be warned, if you do flatly reject the offer, the chances of it being increased at this stage will not be high.
Another possible downside to negotiating is if the employer feels they have initially paid over the odds for you, they might be rather ungenerous when it comes to reviewing your salary in the future. However, a bird in the hand is definitely worth two in the bush, and if an employer fails to give you the pay rises you deserve, you can always look elsewhere.
Considering the offer
Once the employer has made their final offer, you are under no obligation to accept it on the spot. It’s entirely acceptable – and definitely recommended – to at least sleep on it. Such a major decision requires careful consideration and most employers will respect you for taking a little time to think it over.
Multiple and counter-offers
Another reason for taking at least 24 hours to consider an offer is that it will give you a chance to use this offer to influence others you may have received. If you’ve worked hard on your job hunt then it’s not unusual to get to a position where you are confronted with multiple offers. Whilst there are obvious risks involved, you can attempt to play them off against each other to achieve an even stronger offer.
Bear in mind that it’s not just prospective employers who might make you a counter-offer. Your own current employer might well do so. But we’ll cover that later in Chapter 29: Resigning.
Get it in writing
Once you have reached a final agreement, it is absolutely essential to get the offer in writing. This should confirm the precise details of the package being offered. It is vital to have this in hand before you contemplate resigning from your current position. I can’t stress enough how important this is. A verbal offer can be withdrawn at any time and you could find yourself in a very difficult position.
In the UK there is no legal requirement for a written contract of employment. A contract is deemed to exist the moment you accept a job offer. However, an employer is still required to give you (normally within two months of your start date) what is known as a written statement of employment particulars detailing certain key terms of your employment.
Whilst a written offer on the employer’s part is normally legally binding, it is common practice for it to be subject to suitable references. And that is the subject of the next chapter.