Salary Negotiation

mzennario31 · May 28, 2015

Hey everyone,

Saw a thread about what other WRX'ers do for a living and thought this would be a good topic. Just received a job offer from a different company where I know the starting point for a salary and their median for that position. I was offered about 18% lowerer than the median and about 2.5% over the low point.

Anyone have any positive or negative feedback on negotiating an initial offer for a new job with a new company?

highergr0und · May 28, 2015

Do you know the average starting pay for the position? Or how fast they move you along the scale? Some companies start low and increase pay fast, so it might pay off.

But it generally doesn't hurt to negotiate, especially if there is a skill involved that you posses that others may not. If you think you're worth more than the offer, ask for more and be prepared to tell them why you deserve it.

SullGolf · May 28, 2015

Most salaried job offer contains some wiggle room. They are most likely prepared to go higher if you ask. It should be based on something tangible though. e.g. "Based on my research of equivalent positions for someone with my experience, I believe $X is more appropriate". I'd probably ask for something around the median, but I have no idea what the values are we are discussing. Only you can make that call.

I will say that I had a job offer that I tried to negotiate up and failed. I asked for another 15% and they didn't even bother to make a lower counter-offer, they just said they couldn't go higher. I turned it down. I think that's fairly rare though.

I'll also expand on what highgr0und just said. Depending on the company pay structure, being on the lower end isn't always a terrible setback. At my company, we have certain pay ranges. If you are higher in your range, you are considered closer to market compensation and will receive lower raises than someone lower in your range. So it trends toward evening out.

highergr0und · May 28, 2015

Oh, and don't let them know that you want more money because you know what the pay scale is..... That will probably get the offer pulled

JackpotJohnny · May 28, 2015

Where was their offer in comparison to what you were asking?
Typically somewhere in the interview process, they will ask you where you need to be or what you are looking for.

If they did , and their offer was close to what you asked for, I would attempt to ask for a what you asked for initially.
If they knew what you wanted/needed to make and didn't get anywhere close, then there's a reason for that, and you probably won't have much luck negotiating.

Also, if you can't negotiate, I'd find out how aggressive their merit increases and promotions are. If you can make back 10% relatively quickly then it's not really as big an issue, but
If they max out at the basic standard 3% annually, I'd probably push for more up front

DavePelz4 · May 28, 2015

Over my career, I've hired many, many people and negotiated on the "company" side and have also negotiated my own employment contracts.

A few things to consider.
1. Their goal is to spend as little money as possible.

2. They already know what you're making and their offer is probably 10-15% higher than that.

3. You need to know what it's going to take financially, for you to move. If you don't have a number, you're negotiating against yourself.

4. You're probably negotiating with someone in HR as opposed to the hiring manager (your future boss). The hiring manager is the real decision maker here as your salary/benefits comes from their budget. THIS IS THE KEY PERSON IN THE NEGOTIATIONS.

5. Salary isn't the only thing to negotiate. Consider the value of vacation, stock options, a signing bonus, etc.

6. If you can't get to where you want to be, call the hiring manager and thank them for their time, tell them you really want to join their team but the salary isn't what it needs to be. They'll ask you the question of what it's going to take. This is why you need to know your number. Whatever your number is, tell them it's at least 5-7% higher than so that YOU have room to move if needed. You can only make this call once though.

7. Be prepared to say yes. You'd be shocked at the number of people over the years where I've given them their number (which was really my number) and they hesitate or don't say yes immediately. I've pulled offers in that case as it suggests that they don't know what they want.

8. Be prepared for a counter offer from your existing company. All of a sudden, you will be a valuable employee because the cost to replace you in terms of recruiting cost, training and lost productivity is more than what it would cost to keep you.

Good luck!

SilverBullets · May 28, 2015

ALWAYS negotiate. It may not always work (most of the time there is at least a tiny bit extra to work in on top, but, not always) but it is always worth at least asking. The last thing you want to do is not at the very least ask. If you don't ask, you will always have the thought in the back of your mind that you could possibly be making a little more (even if it's just $1000 or something relatively nominal).

Now a couple of tricks that I have used and learned from my family (dad was a HR exec for 30 or so years and my Sister is currently a corporate recruiter for a large company) are the following;

1. You need a valid justification to ask for more money. I would never just ask for more money without a valid reason to back it up. In the past I have used the fact that I was losing some money that was unvested in my 401k by making the move so it's going to take a little more. Or you could play the card that for your first year of service your raise will be prorated. Depending on when you start you may not receive a full raise for 18 months or whatever. So that you would like a little extra to be able to balance that proration out. Vacation days are also valuable. If you are taking a job with less vacation days or holidays or floating holidays then your current job, convert that to salary and then ask them to add that into your base. If you make $100k base salary with 20 vacation days but are taking a job with $110k and 15 vacation days, factor the cost of the 5 days of vacation and add it in.

2. Ask for 2 things with expectation to get 1. During my last negotiation I asked for a little bit money and more vacation days. My employer opted to give me more money. Vacation days are free for a company to give their employees. Many times you will see employers opting the route of more vacation vs. more money because it doesn't directly hit their bottom line. Depending on the employer's vacation rollover policies, adding on vacation days can become lucrative in the end. At the very least, you can end up with more time off.

I always recommend employees to ask. As a manager, I also raise an eyebrow when a candidate doesn't ask. That may just be me though. I want my candidates to start off on the right foot. And for me, part of that, means they are starting off with all of the information in hand. If they don't ask, they don't have all of the information. The answer may very well be no. But at least they know how far we are willing to push.

My last piece of advice is to only ask once if you truly want the position. If, however, their number is too low for you to accept the offer then explain that it's a deal breaker and why. Generally, if the job is right for you, a few percent in salary different will not stop you from taking the position.

SilverBullets · May 28, 2015

[quote name='DavePelz4' timestamp='1432838775' post='11644516']
Over my career, I've hired many, many people and negotiated on the "company" side and have also negotiated my own employment contracts.

A few things to consider.
1. Their goal is to spend as little money as possible.

2. They already know what you're making and their offer is probably 10-15% higher than that.

3. You need to know what it's going to take financially, for you to move. If you don't have a number, you're negotiating against yourself.

4. You're probably negotiating with someone in HR as opposed to the hiring manager (your future boss). The hiring manager is the real decision maker here as your salary/benefits comes from their budget. THIS IS THE KEY PERSON IN THE NEGOTIATIONS.

5. Salary isn't the only thing to negotiate. Consider the value of vacation, stock options, a signing bonus, etc.

6. If you can't get to where you want to be, call the hiring manager and thank them for their time, tell them you really want to join their team but the salary isn't what it needs to be. They'll ask you the question of what it's going to take. This is why you need to know your number. Whatever your number is, tell them it's at least 5-7% higher than so that YOU have room to move if needed. You can only make this call once though.

7. Be prepared to say yes. You'd be shocked at the number of people over the years where I've given them their number (which was really my number) and they hesitate or don't say yes immediately. I've pulled offers in that case as it suggests that they don't know what they want.

8. Be prepared for a counter offer from your existing company. All of a sudden, you will be a valuable employee because the cost to replace you in terms of recruiting cost, training and lost productivity is more than what it would cost to keep you.

Good luck!
[/quote]

Very good advice here. A couple of things I would like to add some commentary on.

On #4, you are right. HR isn't the one paying your salary but in most cases it's who you negotiate with. I recently hired a guy and our HR department was giving him the run around on how he wanted too much money. I essentially had to push our HR person out of the way to give him what we valued him at. It's not their call or their budget.

#6 - Yup. But I wouldn't say this only applies if their initial offer isn't enough. This applies when they first make contact with you and ask you how much money it would take. If you think it will take $100k to move jobs (using round numbers). Tell them $105 to $110. If the hiring manager making the offer is smart he is going to offer you $100k on the dot (or $95k). Then you are kind of stuck. You said $100k, they offered $100k. How can you really negotiate? They hit the number you said it would take.

#8 - The counter offer from your current employer. This tactic always frustrates me. The way I have always viewed it, is that if I am worth that much money to you, why wasn't I getting that number in the first place? I mean I get it. I went out and created a demand for myself, but, at the same time, I don't enjoy being at a place where I am not taken care of. And more specifically the only way for me to take care of it by twisting their arm. I know a lot of people who take the counter offer from their employer. But for me it's just not something I would ever do. It burns a bridge with the other company trying to hire you.

bscinstnct · May 28, 2015

How much is this base over your current base?

How much is this base + IC measure against current ote?

mzennario31 · May 29, 2015

Thanks so far for all of the replies. Even if they don't budge it is higher than my current compensation from base and bonus perspectives. It's a little irritating to hear how much of a raise they're giving you from your current company because that really should be irrelevant. The range of pay for the position versus the value I bring to it should be the main factor.

They had nothing to do with previous salary and it should be based on my value to them. Not how I was previously valued. A sports free agent isn't paid based on their past contract. They're paid on their value in the free market.

I am happy with the offer and ultimately will accept. But I agree that I should negotiate. I need more $ for ho'ing!

highergr0und · May 29, 2015

Why get snippy with people offering comments? They're basically saying if you're getting a good raise that you may want to be happy with that instead of dwelling on the negative.

Bear in mind that just like free agency, there are two factors at play. First is market saturation. Maybe that position in your market is relatively flooded in the market which drives value down since there are more people to negotiate with similar skill sets. Second is your actual value to them. Maybe they're happy with a decent player at a cheaper price because they have superstars to back it up. Or maybe they'd rather develop raw talent than pay for elite. Or maybe, you think you're elite but to them you're just good. Maybe you didn't sell yourself to the level that you expected? Or maybe your game tape / resume has some holes that raise some flags so they want you on board with the chance to work up to elite.

If you didn't know the salary range of the new job, would you have taken it and been happy? Because right now I can see an attitude that tells me you're going to start with a chip on your shoulder. That means you're either going to work your butt off to get the raise you want or be all pissy that you're not getting paid enough which shows, believe me.

mzennario31 · May 29, 2015

hi higherground... not being snippy with the people here if you think i was commenting directly to bscinstinct. sorry if it came across that way. That was more my response to the HR team controlling the compensation.

And no... i'm ecstatic to join the team. My problem with was with the HR team framing my salary offer as an increase to what I am currently earning as opposed to my perceived value to them. One, in my opinion, should have nothing to do with the other. I wanted to clarify with them that my offer would have been the same regardless of any previous salary. Under the same token, if I were taking a position offering less pay than I currently earn, I would not expect them to pay at the top of their range if they didn't see my value as such.

"Bear in mind that just like free agency, there are two factors at play. First is market saturation. Maybe that position in your market is relatively flooded in the market which drives value down since there are more people to negotiate with similar skill sets. Second is your actual value to them. Maybe they're happy with a decent player at a cheaper price because they have superstars to back it up. Or maybe they'd rather develop raw talent than pay for elite. Or maybe, you think you're elite but to them you're just good. Maybe you didn't sell yourself to the level that you expected? Or maybe your game tape / resume has some holes that raise some flags so they want you on board with the chance to work up to elite." --- all of these are fair and I have considered. Which is why I ultimately think the offer is fair and I accepted and am happy with the opportunity to prove a greater worth.

mzennario31 · May 29, 2015

[quote name='DavePelz4' timestamp='1432838775' post='11644516']

8. Be prepared for a counter offer from your existing company. All of a sudden, you will be a valuable employee because the cost to replace you in terms of recruiting cost, training and lost productivity is more than what it would cost to keep you.

Good luck!
[/quote]

Thanks for these DavePelz4. Even if my company came back and offered me more than the offer I just accepted I wouldn't stay here.
1) I'm a man of my word and if I accepted the offer I would not back out barring the offering company renegging on the agreement
2) Do I really want to stay somewhere I'm valued only because I may leave?
3) I've heard a few horror stories that a company counters to keep the employee and not impact productivity, all the while recruiting a cheaper replacement

highergr0und · May 29, 2015

[quote name='mzennario31' timestamp='1432913427' post='11649936']
hi higherground... not being snippy with the people here if you think i was commenting directly to bscinstinct. sorry if it came across that way. That was more my response to the HR team controlling the compensation.

And no... i'm ecstatic to join the team. My problem with was with the HR team framing my salary offer as an increase to what I am currently earning as opposed to my perceived value to them. One, in my opinion, should have nothing to do with the other. I wanted to clarify with them that my offer would have been the same regardless of any previous salary. Under the same token, if I were taking a position offering less pay than I currently earn, I would not expect them to pay at the top of their range if they didn't see my value as such.

"Bear in mind that just like free agency, there are two factors at play. First is market saturation. Maybe that position in your market is relatively flooded in the market which drives value down since there are more people to negotiate with similar skill sets. Second is your actual value to them. Maybe they're happy with a decent player at a cheaper price because they have superstars to back it up. Or maybe they'd rather develop raw talent than pay for elite. Or maybe, you think you're elite but to them you're just good. Maybe you didn't sell yourself to the level that you expected? Or maybe your game tape / resume has some holes that raise some flags so they want you on board with the chance to work up to elite." --- all of these are fair and I have considered. Which is why I ultimately think the offer is fair and I accepted and am happy with the opportunity to prove a greater worth.
[/quote]

Good luck in your new career!!! I'm about to embark on the same process. Not looking forward to it.

SilverBullets · May 29, 2015

[quote name='mzennario31' timestamp='1432913741' post='11649974']
[quote name='DavePelz4' timestamp='1432838775' post='11644516']
8. Be prepared for a counter offer from your existing company. All of a sudden, you will be a valuable employee because the cost to replace you in terms of recruiting cost, training and lost productivity is more than what it would cost to keep you.

Good luck!
[/quote]

Thanks for these DavePelz4. Even if my company came back and offered me more than the offer I just accepted I wouldn't stay here.
1) I'm a man of my word and if I accepted the offer I would not back out barring the offering company renegging on the agreement
2) Do I really want to stay somewhere I'm valued only because I may leave?
3) I've heard a few horror stories that a company counters to keep the employee and not impact productivity, all the while recruiting a cheaper replacement
[/quote]

Nice and congrats on the career move. I try to not get caught up in where I fall within the window. Quite frankly, I would rather come in closer to the bottom of a pay window than the top. It leaves more room to grow and you can prove that not only are you cheaper than some, you are better. And people really do notice that. Good leaders will work to get those closer to the bottom of the pay window up to middle sooner than normal. At least that's how my current employer does it.

There are so many factors that go in to how much an employer will pay to bring in a recruit that it becomes too subjective and too hard to get caught up in. You know what number is good for you and what number makes you happy. That number shouldn't be solely focused on the pay window. Pay windows are typically large for a reason. Things change quickly in the job market and demand at the time the employer is looking can sway the number they are willing to pay drastically.

2 years ago I was hired in as a sr. associate at my company. I brought 6 years of experience with me (4 at a big 4 firm and 2 at a fin. serv company) and a certification. I was given a solid number that worked for me and was happy. Even though I was closer to the bottom of the pay window. Flash forward to this month. I am now a manager and am hiring to back fill my prior position. There are literally NO quality candidates out there in my field (when I was hired 2 years I interviewed against 3 other very qualified candidates). I found a very good candidate to hire, from my personal network, and brought him in. We ended up having to pay the same exact amount of money that I got 2 years ago, yet he has 4 less years of experience and no certifications. The market completely changed, the demand grew, and it drove the price we are willing to pay way up.

mzennario31 · May 29, 2015

[quote name='SilverBullets' timestamp='1432919121' post='11650446']
[quote name='mzennario31' timestamp='1432913741' post='11649974']
[quote name='DavePelz4' timestamp='1432838775' post='11644516']
8. Be prepared for a counter offer from your existing company. All of a sudden, you will be a valuable employee because the cost to replace you in terms of recruiting cost, training and lost productivity is more than what it would cost to keep you.

Good luck!
[/quote]

Thanks for these DavePelz4. Even if my company came back and offered me more than the offer I just accepted I wouldn't stay here.
1) I'm a man of my word and if I accepted the offer I would not back out barring the offering company renegging on the agreement
2) Do I really want to stay somewhere I'm valued only because I may leave?
3) I've heard a few horror stories that a company counters to keep the employee and not impact productivity, all the while recruiting a cheaper replacement
[/quote]

Nice and congrats on the career move. I try to not get caught up in where I fall within the window. Quite frankly, I would rather come in closer to the bottom of a pay window than the top. It leaves more room to grow and you can prove that not only are you cheaper than some, you are better. And people really do notice that. Good leaders will work to get those closer to the bottom of the pay window up to middle sooner than normal. At least that's how my current employer does it.

There are so many factors that go in to how much an employer will pay to bring in a recruit that it becomes too subjective and too hard to get caught up in. You know what number is good for you and what number makes you happy. That number shouldn't be solely focused on the pay window. Pay windows are typically large for a reason. Things change quickly in the job market and demand at the time the employer is looking can sway the number they are willing to pay drastically.

2 years ago I was hired in as a sr. associate at my company. I brought 6 years of experience with me (4 at a big 4 firm and 2 at a fin. serv company) and a certification. I was given a solid number that worked for me and was happy. Even though I was closer to the bottom of the pay window. Flash forward to this month. I am now a manager and am hiring to back fill my prior position. There are literally NO quality candidates out there in my field (when I was hired 2 years I interviewed against 3 other very qualified candidates). I found a very good candidate to hire, from my personal network, and brought him in. We ended up having to pay the same exact amount of money that I got 2 years ago, yet he has 4 less years of experience and no certifications. The market completely changed, the demand grew, and it drove the price we are willing to pay way up.
[/quote]

Congrats on the promotion. Honestly I think they were having a similar problem finding someone with these type of qualifications in the Pharma-space. They went through a lot of candidates and were not happy. My goal is to do the same within my new company. Happy to have the opportunity to show them what I can do.

bscinstnct · May 29, 2015

[quote name='mzennario31' timestamp='1432913427' post='11649936']
hi higherground... not being snippy with the people here if you think i was commenting directly to bscinstinct. sorry if it came across that way. That was more my response to the HR team controlling the compensation.

And no... i'm ecstatic to join the team. My problem with was with the HR team framing my salary offer as an increase to what I am currently earning as opposed to my perceived value to them. One, in my opinion, should have nothing to do with the other. I wanted to clarify with them that my offer would have been the same regardless of any previous salary. Under the same token, if I were taking a position offering less pay than I currently earn, I would not expect them to pay at the top of their range if they didn't see my value as such.

"Bear in mind that just like free agency, there are two factors at play. First is market saturation. Maybe that position in your market is relatively flooded in the market which drives value down since there are more people to negotiate with similar skill sets. Second is your actual value to them. Maybe they're happy with a decent player at a cheaper price because they have superstars to back it up. Or maybe they'd rather develop raw talent than pay for elite. Or maybe, you think you're elite but to them you're just good. Maybe you didn't sell yourself to the level that you expected? Or maybe your game tape / resume has some holes that raise some flags so they want you on board with the chance to work up to elite." --- all of these are fair and I have considered. Which is why I ultimately think the offer is fair and I accepted and am happy with the opportunity to prove a greater worth.
[/quote]

You can negotiate.

Just don't do anything to jeopardize the offer. Be honest, let them know you are excited about the opportunity and are very strongly considering but you were ideally looking for x, would they consider that? If they say their offer is fair, cite the reasons you are looking for and worth x, ask them why they offered you y, please consider increasing the base but continue to reiterate you are strongly considering the offer and you love the opportunity.

I don't know the particulars of how this company operates. If they are giving you more than 15% over your current, they would be have valid reason to stick with their offer unless you can make the case that you are so far under market now, this has to be considered. And I wouldn't want you to ask if there is the possibility they would pull the offer so think about asking.

Bottom line is that if you don't ask, you won't get more. The only people who do, get it because they ask.

mzennario31 · May 29, 2015

[quote name='bscinstnct' timestamp='1432922010' post='11650810']
[quote name='mzennario31' timestamp='1432913427' post='11649936']
hi higherground... not being snippy with the people here if you think i was commenting directly to bscinstinct. sorry if it came across that way. That was more my response to the HR team controlling the compensation.

And no... i'm ecstatic to join the team. My problem with was with the HR team framing my salary offer as an increase to what I am currently earning as opposed to my perceived value to them. One, in my opinion, should have nothing to do with the other. I wanted to clarify with them that my offer would have been the same regardless of any previous salary. Under the same token, if I were taking a position offering less pay than I currently earn, I would not expect them to pay at the top of their range if they didn't see my value as such.

"Bear in mind that just like free agency, there are two factors at play. First is market saturation. Maybe that position in your market is relatively flooded in the market which drives value down since there are more people to negotiate with similar skill sets. Second is your actual value to them. Maybe they're happy with a decent player at a cheaper price because they have superstars to back it up. Or maybe they'd rather develop raw talent than pay for elite. Or maybe, you think you're elite but to them you're just good. Maybe you didn't sell yourself to the level that you expected? Or maybe your game tape / resume has some holes that raise some flags so they want you on board with the chance to work up to elite." --- all of these are fair and I have considered. Which is why I ultimately think the offer is fair and I accepted and am happy with the opportunity to prove a greater worth.
[/quote]

You can negotiate.

Just don't do anything to jeopardize the offer. Be honest, let them know you are excited about the opportunity and are very strongly considering but you were ideally looking for x, would they consider that? If they say their offer is fair, cite the reasons you are looking for and worth x, ask them why they offered you y, please consider increasing the base but continue to reiterate you are strongly considering the offer and you love the opportunity.

I don't know the particulars of how this company operates. If they are giving you more than 15% over your current, they would be have valid reason to stick with their offer unless you can make the case that you are so far under market now, this has to be considered. And I wouldn't want you to ask if there is the possibility they would pull the offer so think about asking.

Bottom line is that if you don't ask, you won't get more. The only people who do, get it because they ask.
[/quote]

agree wholeheartedly. i asked politely and was unsuccessful. had several reasons to back up the claim of my value but it is significantly higher than my current salary so that was a roadblock for them. but as a company they try to get employees closer to the mean. someone on the lower end of the range might get higher percentage merit increases to approach the mean quicker. overall i'm happy. can be an intimidating ask for some people. but like you said, if you don't ask, you don't get.

Bama87 · June 12, 2015

I just went through getting a new job, been here 3 weeks, and I was in a similar position pay wise it sounds.

My previous pay was so far out of scale (not the good out of scale either) than what the market pay is for my position I didn't even put my current pay down and would have said that if they did ask. It shouldn't matter what I make where I come from, it's what are you willing to pay for me right now for this position at this company. They decided to pay me what I asked for without knowing what I was making. Which like others have said I asked for a "little" more than I was willing to take, thinking worst case they counter offer and I'm still good, but now I am very happy of the bat.

Good luck to you in the future.

SullGolf · June 12, 2015

Lessons:
1) Don't be honest when someone asks what you currently make. At minimum tell them what you are looking for plus some cushion for when they go lower. I've told people honestly what I was making when I was looking to switch jobs for non-monetary reasons, but even then it didn't work out well. They offered below what I was already making. I guess they just assumed I wasn't being honest because I'm the one moron out there doing it .
2) Companies don't pay people what they are worth. They pay people what they are willing to accept.

I've learned both of those 1st hand through bad handling of my own situations. Either way, congrats on the new job and the bump up! In a lot of bigger companies, having a lower salary isn't a terrible thing because you often get bigger raises when you are on the lower end of a pay tier. Obviously getting more sooner is always better, but this at least makes it so it equalizes eventually.