Negotiate a Job Offer
Negotiating a job offer can be intimidating, but preparing yourself and doing some research ahead of time can make it less so.
By negotiating a fair salary, you set yourself up for better earnings down the road, since future raises will be based on your starting salary. That said, don’t stress about it too much; everyone has to start somewhere.
Adapted from Christine DiDonato, Negotiating Your Job Offer
Get an Idea of What You Need to Earn
Track your spending for a few months to see where your money goes. Identify expenses you could reduce or eliminate. What’s the minimum you need to live on?
CNN Money's Cost of Living Calculator can help you see what a salary in one city equates to in another city.
Research the Position and Salary Range
Aspects of the job:
- Key Responsibilities – What does a typical day look like? How much time will you spend working alone, in meetings, creating new things, etc.?
- Challenges – What challenges do they expect someone in this role to encounter? Are there opportunities for growth? Do you find them exciting? Is this a good fit based on the culture and environment?
- Values – Does the company’s values align with yours? What is the reputation of your supervisor? Do you know what kind of team you’ll be working with? What is your location and travel like?
Salary range for this role by industry, job title, or location:
- Use online salary research resources such as:
- Talk with individuals who work in this industry to validate your research. Instead of asking how much money they make, ask what they consider a reasonable salary range for the job you're considering. Share with them the data you found and ask them to comment on it.
Get Clear on What You Want and Need
Consider important aspects of the position including job security, salary, quality of work, flexibility, team environment, opportunities for growth, etc.
Ask yourself about the job, and be honest.
- What are your must-haves in a job?
- What is most important to you in the next one to three years?
- What are your values? What needs must be met? What motivates you?
- What are your deal-breakers? What aspects of the job are non-negotiable?
- For example, traveling 50% of the time for work could be a deal-breaker.
- What trade-offs could I accept?
- For example, if I were offered more money for more travel, would the trade-off be worth it?
Establish a Salary Range with the Employer
Employers sometimes ask questions to establish what salary range a job candidate has in mind. This gives the employer a general indication of "job fit" based on salary alone. Of course, salary is just one aspect of a job offer, so it’s important to know how to answer these questions when asked.
If you are asked a question like, "What is your current salary?" or "What salary are you looking to make?", don't answer directly. Instead, restate that you’re trying to find the right fit. If pressed, suggest a salary range based on your experience, education, skills, and certifications. Reiterate that you will consider all aspects of the offer, not just salary.
What To Do When You Receive an Offer
- Show excitement about the position.
- Ask for the offer in writing so you can review and document it.
- Ask when they want an answer. If you want or need more time, ask for it, within reason. Typically, 24 to 48 hours is a reasonable time to consider an offer.
Consider Total Compensation
Compensation is more than just salary. When we speak of "total compensation," we mean:
- Base salary
- Commissions or bonus pay, if any
- Paid Time Off (PTO) or vacation
- Stock (or Equity) - Questions to ask:
- Would you own the full value of the shares (“be vested”) right away, or do you have to wait five years?
- What happens to your shares if you leave the company before you’re fully vested?
Evaluate the Offer
Consider how the new job could affect your lifestyle and your financial picture. Read Fidelity Investments' "How to evaluate a job offer" for six key things to consider:
- Money (base salary, plus cash bonus or commissions)
- Cost of living
- Cost of leaving a Job
- Other costs and considerations
Then ask yourself these questions:
- Are you being offered fair market value in base pay (salary)?
- Compare the job offer to your must-haves and trade-offs:
- Does the total compensation support your needs and growth?
- Do you believe in the product or service the company offers? What is the company reputation? Do they share your values?
Prepare a Counter-Offer
- Come with research that backs up your statements and questions.
- Present other options. For example, if they turn down your request for a higher starting salary, ask if they would agree to give you a performance review with the
possibility of a raise in six months instead of a year. Get any such agreements in writing before you accept.
- Ask about the value of the medical and retirement benefits.
What To Avoid
- Don’t be unprepared or unrealistic. Do your research. Recognize that your wishes and the company’s may not match up.
- Don’t make it personal. Settling on a salary is a business decision for you and for them.