Ask for More When You're Given a Job Offer

Here's a tidbit I found in Money's July issue regarding what to do when you are given a job offer:

Nearly 60% of hiring managers leave room to negotiate in their initial offer to a candidate.

As such, Money's conclusion is to "ask for more."

A few comments here:

1. "Nearly 60%." Let's say it's 58% just for grins. That means 42% DON'T leave room to negotiate.

2. That said, I've been on both sides of the table. As the employer, I can say that there's almost always something that can be done for a great job applicant. As an interviewee, I've found that companies usually do have some wiggle room. It might not all be in salary, but you may get some extra benefits, time off, etc. that you may like even better than a higher salary. Be creative. Just because they say no to a salary-increase proposal doesn't mean they don't have anything extra to offer you.

3. You have an advantage in maximizing your career earnings if you begin with a higher starting salary. You do even better if you get regular salary increases -- and one of those times when you can make better-than-average jumps in pay is when you are switching jobs. As such, don't settle for a lower-than-deserved salary or it will end up compounding against you throughout your working career.

4. Businesses would rather pay a lower wage than a higher wage if given a choice (why pay Joe $45,000 if he's willing to work for $43,000?) so they'll usually go low. But in the end, if you have the qualifications, most will eventually pay a fair market wage as they want good people. So if you have the skills, be sure to ask for the salary you deserve. It's more than likely that they can and will come up with some extra for you.

Comments

[FamilyFinanceBlog]

I've asked for more money with every job offer I've ever had. One case was an extra $2k a year and another an extra $5k. Not bad for just saying "hey, you want to try to increase that a little?" Once they have offered you the job, you KNOW that they want you there. I have never, ever, ever heard of someone having a job offer rescinded if they asked for more. The worst thing that can happen is that they say no.

[Miguel]

I've found that it's never that simple, at least not with any job I've looked at in the past 15 years.

First of all, companies have wised up - They won't make the formal offer until you've come to some agreement on pay. Then if you try for more after the offer, they will claim bad faith negotiating.

My advice: Be upfront. Ask for the pay you want and feel you deserve. Ask for what you'd be happy with. Worst case is they tell you no, in which case there is no point in either of you wasting each others time.

[FMF]

Miguel --

"They won't make the formal offer until you've come to some agreement on pay."

Not anywhere I've ever worked. We usually knew a candidate's pay RANGE as well as the job's pay RANGE, but we never agreed on salary before an offer was made (the salary was part of the offer.)

And even then, if the person was exceptional, we could always go higher.

[Pat]

This is a very important subject and hits home for me. Especially the phrase, "You have an advantage in maximizing your career earnings if you begin with a higher starting salary."

When i got my first "real world job" I remember just being so excited to get an interview and when they said they would hired me on the spot we then negotiated the salary. I was so joyful, and had no experience or knowledge, that I just said (stupidly and regretfully,) "I'll work for anything I'm just so happy to get the job, thank you." Of course I was working for the minimum salary for my position for awhile after that. After 6 months they gave me a 42% raise because of my performance and they knew they were highly underpaying me, but I did still have to ask for the raise myself. I missed out on about 10 grand being "happy to just get the job". Great post.

[Anitra]

Most of the time, this is good advice. However, a co-worker of mine almost didn't get the job because he asked for more money. My boss basically had to go back to him and say "No, we don't think you're worth that much money here, given your skill set." He then sheepishly said that he'd take the job at the lower salary.

But that was an extraordinary case. If it seems like you are a really good fit for the company, go ahead and ask for more.

[Miguel]

I guess the key takeaway is that negotiation customs differ radically from industry to industry, and also depending on the pay grade. The key is to be armed with the info you need to be credible.

[L]

Hey Family Finance blog, it happened to me. Got an offer from a company that tried to pay me less than the going market rate for someone with my skill set and experience. When I asked if they could come up with more $$, they said "never mind." Probably just as well ..

[FMF]

L --

It was probably for the better. Why would you want to take a below market rate job anyway?

[Big Cheese]

Great article.

As was said it's about how much they want you. There is an art to negotiating because it has to be in good faith and fair & reasonable or you risk losing the deal. But realize you have the most negotiating power BEFORE the offer is signed.

Be gracious, thank them for their interest in you. Talk about the job and the fit as much as possible, wait if you can before discussing anything salary related. After all you don't want to buy something until you know you want it and then take the time to consider the cost.

Make sure you have a good reason to justify why you want more. Usually being in a good job with some level of golden handcuff or other vesting benefits is a good reason to ask for more to 'compensate' you leaving your current job. Ideally your reason should be more than saying you would like the extra money. That doesn't seem fair & reasonable to the employer - everyone wants more money but you will have to justify it. Be careful of leveraging multiple offers to boldly or the hiring company won't think you are interested.

If you can follow this and are valued you will have an exception made for you to come in above the internal equity pay rate. However your challenge now is to perform to prove your worth. It isn't as hard as it sounds since your hiring manager has agreed to pay you more and implictly wants you to succeed.

I've been in 5 jobs so far, every one after the 1st job has followed this scenario with the exception of job #4 that followed a company shutdown of a startup. I took a paycut there but still successfully negotiated for a $10,000 signing bonus(from nothing offered) and increased bonus level even with my reduced negotiating power.

-Big Cheese

[Big Cheese]

Sorry about the typos above- I typed this too fast :-)

[Rob D.]

Great topic. Typically if a co. is interested they'll ask, how much are you looking for - which is a great opportunity to ask what's the salary range of the job. When given a range by a prospective employer, say - it pays $35k-$40k - flinch.... and then take their top number, in this case $40,000 and tell them that it is just below the low end of the range you were looking for... that should lead to an honest conversation of what they're willing to pay.

[Miguel]

Everything Big Cheese said rings true with my experience. First you have to sell them on why you are THE ONE. In the process you have to determine if this would be a good move for you. And then you have to sell them on why you deserve what you're asking for and why they are going to have to stretch to lure you away.

It helps if you have the option of staying right where you are. I never let on if I'm unhappy with my present circumstances. As far as the prospective emplyer is concerned, I'm happy where I am, think the people are great, think the org is great, expect to get a raise soon, BUT simply feel limited in some way and/or wish to explore other options.

I have never taken a new job without a significant increase in pay, responsibility, or prospects. It's simply not worth it, unless it's a strategic move to a new career path.

[Big Cheese]

Miguel,

Sounds like you know what you have to do. Well said.

BC

[Anonymous]

I came back to work for a company I had previously worked for. One of the things I asked for, and got without any hesitation was to have my years of service bridged from my previous time there. Since that is used to determine vacation time, it was worth a couple extra days of vacation each year.