Money Talks Pt 2: Negotiation Strategies

Does the thought of negotiating and discussing money with a future employer make you feel uneasy? You’re not alone. As exciting as starting a new job is, negotiating to be paid what you’re worth can be stressful. We’re here to fix that so you can confidently walk into your next salary negotiation.

This is part 2 of a negotiation series. During the first article we learned a negotiation framework for how to approach salary conversations. I encourage you to read the entire first article Money Talks: A Negotiation Framework. If you’re pressed for time, here’s a refresher on the negotiation framework before we dive in depth into our negotiation strategies.

Negotiation Framework

Framework 1: Defining Negotiations

Any situation when you’re in a conversation with someone and one person wants something can be seen as a negotiation. Negotiations happen around us all the time.

Framework 2: How to Approach Negotiations

Approach negotiations with compassion. When you’re in a negotiation it will be clear that one person wants something from the other. For a successful negotiation, each party should spend time asking questions, gathering information, empathizing, learning, and getting to a mutual understanding.

Framework 3: Joint problem solving

At the end of the day, both parties would like to get to a resolution and this should be done together with joint problem solving. Now that the situation has been discussed further, how can the two parties come to a mutual understanding where both benefit? 

Now that we have a solid understanding of how to approach negotiations, we’ll share tips on how to put this into practice.

Negotiation Touchpoints

Initial Discussion

As discussed in Framework 1, salary negotiation starts at the beginning of the conversation. One of the clearest points of a negotiation’s start is when a recruiter or hiring manager asks  “What salary are you looking for?” or a similar variation.

While disclosing a specific number or discussing salary early on may feel like you’re pigeonholing yourself, the negotiation doesn’t end here. It’s important not to feel pressured that if  you give one answer that it will be the final. Still, it helps to be prepared to answer this first salary question. Here are ways to answer the first salary question.

Receiving the Offer

You have the most leverage for negotiation when you receive the offer and the company announces they want to hire you.  It’s essential to use this to your advantage while also recognizing that both you and the hiring team want the same thing.  Now is the time to practice Framework 2: approaching the conversation with empathy, in order to facilitate Framework 3: joint problem solving, which will lead you to negotiating your best offer. 

Offers are often presented verbally. It’s an exciting moment, however, make sure to remain composure. Your response to an offer is the first part of this active negotiation effort. While it may be tempting to accept the first offer, even if it is a good offer, it’s best to give yourself time to consider the entire written offer. 

Respond to the offer with enthusiasm and grace to nurture a positive relationship with the company.

“Thank you, I’m really excited about working for X company and I appreciate the time you took to put this offer together. I will need some time to look over this offer, can you send the offer and we can reconnect in 24 or 48 hours?”

By requesting the written offer and asking to reconnect in the immediate future, you’re allowing yourself time to fully digest the offer components and decision, while also signaling to the recruiter that you are serious about making a decision soon. This will give you the foundational data to prepare for your negotiation conversation.

Negotiating the Offer 

You’ve received the offer, and now comes the real work of understanding the best approach to active negotiation. When negotiating it is critical to consider these strategies and tips.

Understand What’s Important to You with an Offer

Depending on your industry and role, there can be many components of an offer. There are monetary components such as: base salary, equity, sign on bonus, target/yearly bonus; there are also non monetary components like vacation, remote work, professional development, and parental leave. When considering your offer, think of the entire offer and  the value the offer brings as well as what components are especially important to you. For some job seekers, remote work is more important than professional development; for others equity is more important than base salary. Take time to determine which components are the most important to you. These can all be negotiated.

Do Your Research to Understand What You Want and Why 

Outside of billionaires most people would probably say they could use more salary. If you’re looking at the proposed salary offer and you want more, it’s important to understand what “more” means and “why”. Creating a clear salary goal and reasoning allows the recruiter to aim for a benchmark and also justify the change to salary approvers and HR.

Approaching a recruiter saying you want $20K more in base salary because you have a competing offer, or because you’ve done market research that the role should be paid at this level is a lot more effective than simply telling the recruiter you want more money. Do this for every compensation component that you plan to negotiate. Similarly, if you don’t have a compelling reason for wanting to change a specific component, take note that it might make for a less convincing argument.

Help them Understand Why You’re Requesting a Certain Amount

With every component you ask to change, be prepared to answer the why. This may feel like you’re getting personal, but discussing salary is personal. The recruiter or hiring manager likely has to get approval from someone else, whether it’s HR, Finance, or a department leader. Telling the story behind the ask is going to help the recruiter sell your why.

I’ll never forget when as a recruiter I was working with a candidate who disclosed to me that he was unfortunately going through a divorce. Therefore when discussing compensation, salary was more important to him than equity. At the time, I had leverage on moving salary and equity up to decide on the best total package for employees. Based on this new piece of information, I was able to get this candidate a higher base and sign on bonus, with the tradeoff of lower equity. He happily signed as we were able to close the compensation gap between my company and his competing offer.

Likability is a Factor, Partner with the Recruiter

This brings up another key part of negotiation, likability is a huge factor for how much a person will be willing to help you. Likeability starts from the beginning of your interview relationship by showing mutual respect, building rapport and general politeness. When it comes time for a recruiter to negotiate of your behalf to HR, who will they be more likely to advocate for - the nice candidate who is transparent and respectful or the candidate that is rude and treats the job interview like it’s walking on hot coals?

Start your relationship off right by showing mutual respect. This will also make it easier for the recruiter to partner with you to get a compelling offer. You and the recruiter may be on different sides of the equation, however, you both want the same thing. To hire (or be hired) for this role. 

Make it Clear That You Will Say Yes

No one wants to do a ton of work if the ultimate result will be futile. While you’re proposing your changes, let the recruiter know how excited you are to join so they have motivation to get you across the line. Saying a phrase like this goes a long way: “I really appreciate the work that you’re doing to get me an offer more aligned with my expertise. If we’re able to meet this salary, I will happily sign and join X company”.

Understand Constraints

While the recruiter or hiring manager may be your point of contact, they are hardly ever the final approver. Decisions on salary and benefits are decided at the executive and company level and each company has their own unique compensation philosophy. For example, nonprofits often pay less than private institutions, startups often pay less than big tech companies. Whenever you ask to change your offer, be empathetic and understand that the person you’re partnering with is operating under specific constraints. 

Recognizing these constraints can also help you understand where there’s more opportunity to get closer to your goal offer. For example, companies are often  limited in their ability to give extra salary outside of the salary band. However, sign on bonuses can be easy to leverage because they are seen as one time expenses. Understanding this constraint can help you better partner with the recruiter to understand what else is possible.

Be prepared for Questions 

The negotiation is a two way street. As you’re asking for more compensation, the recruiter will be assessing your value for such requests. You should anticipate questions regarding your job search and how serious you are about the role. A few questions you can expect to be asked: “Are we your first choice?” “Are you interviewing with others?” “What other offers do you have and what are they?” 

Companies want to know how seriously you are considering them and if the risk of putting out a higher offer is going to be worth the reward of you joining the company. With preparation, you can use this to your benefit by showing the recruiter you are valued by other companies and also showing that you are serious about your desire to join the company should your compensation expectations be met.

 Propose All Changes at Once

When you have a firm understanding of what you want to negotiate, make sure these changes are all presented at once to avoid going back and forth with the recruiter and slowing down the hiring process.

Don’t Negotiate Just to Negotiate

It can be tempting to always have just a little bit more. More salary, more equity, more vacation days. However, it’s also important to maintain a strong relationship with the company. If the offer they are giving is aligned or higher than market rate and a candidate is negotiating or being difficult just for the sake of it, companies may decide to move forward with another candidate. It’s not right, but it does happen - both to respectful candidates and aggressive candidates alike. Not everything needs to be constantly negotiated. Part of negotiation is also understanding what’s important and the proper time to negotiate it.

Avoid Ultimatums 

Similarly, avoid providing ultimatums to a hiring partner if your needs are not met. This aggressive behavior might just be enough to have the company walk away, especially in an employer’s market. If you do feel like the offer presented to you is completely lowballed and not an amount you can work with, there are more respectful and collaborative ways to communicate this. 

Instead of giving an ultimatum, communicate with the recruiter:

“I appreciate the offer to join, however, my data shows this role should pay $X which is more aligned to my expectations. As a professional with X years of experience in this field, it will be nearly impossible for me to accept an offer at this point. I’d like to work with you to get it higher if I’m going to join this company.”