3 Must-Read Tips That You Need to Consider Before Trying to Negotiate a Job Offer
Receiving a job offer can be exhilarating! You have worked so hard putting yourself out there, submitting applications, attending interviews, and you finally get that job/ employment offer you have been waiting for!
A verbal job offer is usually paired with a written letter for you to review and sign back to the organization. This offer of employment should be reviewed carefully so you understand what you are getting into. If you do not agree to the terms laid out in the letter, then you would not sign it back. It is at this point you would engage in negotiations with the employer – but tread carefully so that you do not risk getting the employment offer rescinded (they take back the offer).
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As we go through this post 3 Must-Read Tips That You Need To Consider Before Trying to Negotiate a Job Offer, you’ll understand what a job offer is and the terms that you can expect to be outlined within an offer. We will also look at employment offer negotiations. I’ll give you my advice on some of the most common questions that people ask when thinking about negotiating an offer. Before we get into the details, recognize that depending on the country in which you live, employment contracts may look different. In some countries employment is at-will, in others (like Canada) it is a legally binding contract.
I am going to suggest you grab a cup of coffee because this isn’t the most interesting information… but I promise it will be informative!
The information provided in this blog post does not constitute legal advice (I am not a lawyer). If you are ever uncertain about an employment contract, it is within your rights to take it to your lawyer for review. Before we get into the 3 Must-Read Tips That You Need to Consider Before Trying to Negotiate a Job Offer, let’s first look at what a job (employment) offer is.
For the most part, you should receive something in writing after being notified verbally about an offer of employment. If you don’t receive something in writing, like a formal letter, I suggest that you ask for an email from the employer. Asking them to layout any terms and conditions of the employment offer and most importantly the rate of pay. This will avoid any uncertainties that you may have. Most organizations will already have a letter prepared for you to sign and agree to the employment conditions. However, if you are working for a small, family-run business – they may not have a formal process set up to document employment terms.
Terms of employment usually consist of the same information (across jobs and organizations) and it is not something that you should be afraid of. It is a contract that outlines the expectations that an employer has for you and what they will provide you with in return. It’s there to protect you and the employer and is something that you should review carefully.
Topics and terms of employment that you may find in a job offer letter include…
- Your personal identifying information (name, address, etc.)
- The date you are expected to start working
- If it is a contract job, the end date of your contract
- Your job title and pay grade
- Hours of work per week and possibly a specified shift
- Information about the offer being conditional upon any background or reference checks
- An outline of any probationary periods that extend beyond Employment Standards
- Statement(s) of compensation and benefits, or pension entitlements/requirements
- Vacation and time off entitlements / accruals
- Statement(s) of company policy adherence
- Accessibility statement
- Confidential information and non-solicitation agreement(s)
- Termination clauses (with and without cause, and voluntary termination)
- Privacy of personal information statement
- Offer expiration date (what date you have until to consider the employment offer)
- A statement of acceptance and your required signature
The topics listed above are standard when it comes to employment contracts. However, the details and information provided within those topics should be reviewed (ie. how it is worded and what your entitlements are). Again, the employer is putting this in writing to cover themselves as well as you. If you have any questions regarding statements made in the offer letter, contact the employer, and get clarification before you sign and send it back.
When deciding whether to accept a job offer, you must look at the entire package…
- What is the total cash compensation they are offering you?
- Are you happy with the vacation and time off entitlements provided?
- What is the value of the benefits and pension package?
- Are there any other company perks like work from home, company laptop/cell phone, etc.?
- What’s the potential for additional training and development (a lot of companies offer tuition reimbursement for continuing your education that is in line with your position or a future position within the organization)?
- What is the company culture – are there company-sponsored social events or paid time off for volunteer work?
All of this should be considered when making your decision – the total package is more important than just the rate of pay. It is okay to ask for more information and obtain further details when making your decision! If you are not happy with the offer, but really want the position or want to work for the company in general, you may decide to negotiate the offer.
When heading into negotiations, it is best to come prepared and knowledgeable of what can be negotiated and what is non-negotiable. We will look at these further below as we review employment contract negotiations.
Once you receive an offer of employment, as stated above take the time to review the terms before signing back the employment agreement. Once you sign the offer back, there is little to no room to negotiate. Also, note that unless you are a dime a dozen, it may be very hard to negotiate an employment offer for several reasons.
If you are going to try to negotiate different terms than offered, you must consider several factors and ensure you do your research first. If you don’t enter negotiations in a professional and well thought out manner, you may risk making your future manager frustrated with you. Or worse, it may result in a rescinded offer. There are different items within an offer that candidates try to negotiate like total cash compensation, benefits, pension, vacation and time off entitlements, company perks, etc. Various items can be considered “negotiable” but there are also several that will be a company-wide policy or program and considered “non-negotiable”.
We will look at salary, benefits, pensions, and vacation and time-off entitlements in a bit more detail as these are the most common areas of interest when it comes to job (employment) offer negotiations. I also what you to understand some of the background that goes into the decision-making. By providing you with this information, you can enter into negotiations prepared – understanding an employer’s side. This information assumes it is a medium/large organization with formal policies and program in place.
3 Must-Read Tips That You Need to Consider Before Trying to Negotiate a Job Offer
By providing you with “behind the scenes” HR information, my hope is that you can enter into your job offer negotiation prepared and professional, with a list of probing questions you can bring to the employer. Also, I hope to provide you with tips on what to avoid – causing an employer to become frustrated by your attempt to negotiate.
1. Salary Negotiations
A salary (or total cash compensation) offer is the most common part of an employment contract a candidate will try to negotiate. Within the job offer, you may be eligible for a salary, commissions, bonuses, etc., or a combination of various forms of compensation. All of these put together form a total cash compensation. Before going into negotiations, it’s important to understand that compensation offers can be constrained by several factors.
Company compensation structures (pay bands and pay grades for a job), budgets, internal equity practices, pay equity practices, pay increase practices, and setting precedence within an organization. These all play a role when preparing salary offers. Also, it’s fair to assume that the hiring manager has a departmental salary budget they need to abide by when hiring. Sometimes companies lose out on the best candidates because a candidate’s pay range request (often collected during application or phone screen processes) is higher than the budget allows for.
When you are asked about your expected rate of pay or salary, be honest…
YES, it may get you eliminated from the process if you’re asking for too much upfront. But it frustrates employers and recruiters when a candidate states a salary request during the application process and then changes their mind and asks for more. In circumstances like this, an employer may go back to the candidate and say the offer is firm or they may rescind the offer (take it back all together) and contact another successful candidate. An employer will look at this as a game that they are not interested in playing with a candidate who wasn’t honest in the first place.
When a manager is putting together a salary offer for you they have likely reviewed your experience against others in the same job within the organization, ran a salary offer by HR for approval, maybe even had it approved by a member of the finance team, and possibly a senior department leader. Take the offer seriously and move forward with negotiating a higher salary only if you have good reason to do so. If you are going to negotiate a salary offer be sure you have a good leg to stand on.
Some information that you can bring to the table is market data for the given job within the same industry (ensure it is LEGIT data), your current rate of pay if you are switching jobs (assuming the jobs are comparable).
Just because you make a certain amount at one organization, it doesn’t mean that the new organization works on the same pay scale. They will have their own, with their own pay equity/ equal pay program. An employer is required to pay minimum wages as laid out by employment legislation, they are not required to pay what market data suggests. They also aren’t required to increase your pay because you have higher expenses than others that are performing the same job.
2. Benefits and Pensions Negotiations
Gaining a better understanding of how benefits programs work will help you as a candidate understand what about a benefits program is negotiable and what is non-negotiable. A benefits program is a pre-built program that an employer will have with a benefits carrier (insurance company). If you are offered a full-time position, the company may also offer you benefits and participation in their pension (or other retirement/ pension programs).
If you are being offered a temporary (contract position) or a position with part-time hours benefits and participation in a benefits program may not be offered. It could be part of the way the company runs its business. If this is the case, there is no harm in asking if you could participate in the benefit or pension program. What we will look at in more depth is when you are offered a full-time position within an organization and they offer participation in the benefits and pension plan.
Benefits and Pension Plans
A company may have a tiered program based on levels of hierarchy within an organization; or, it may be one program for all employees. They may have a flexible benefits plan where they offer a wide range of options and you can pick from the options provided with some limitations. Those programs themselves are non-negotiable. Some companies will allow you to decline some coverage. Some benefits may be mandatory like disability or life insurance coverage. If the benefits program premiums are based on a co-share between employees and the company, the co-share is not likely negotiable as it would be a company policy. Or if the benefit plan doesn’t cover prescription glasses and you want it added, then they aren’t likely going to budge. Anything that would be considered a company held policy/ program would likely be non-negotiable.
The only part of the benefits and pension programs that may be negotiable is any waiting period that may be applied. Some companies may require new employees to endure a waiting or probationary period before their benefits and/or pension come into effect. Waiving a waiting period is more common for a tenured professional who may be moving from one company to another. But, if this is important to you and will affect your decision making, it is something that you can try to negotiate.
If they do not oblige, the reasoning may be that they do not want to set precedence – what they do for you they may need to offer to all employees. Or, it could make the company look discriminatory if they favored your request over other candidates/employees.
3. Vacation and Time Off Entitlement Negotiations
Another component of a contract that candidates will try to negotiate is vacation and/ or time off entitlements. A company should always be providing the minimum as stated by Employment Law but anything above that …is usually provided within a company’s policy.
If you are starting in an entry-level role, it will be harder to negotiate more time off above company policy. If you are currently employed with a lot of tenure, bring your current entitlements to their attention. But, a company may only make policy exceptions for positions that are manager-level and above. It doesn’t hurt to ask. A company may reject your request as they may look at this as setting precedence for what they are going to have to do for others. Employers are required to ensure all existing and future employees are being treated fairly.
My Personal (Not Legal) Advice as an HR Professional Who Has Been on the Employer Side of Negotiations
So we have looked at the 3 Must-Read Tips That You Need To Consider Before Trying to Negotiate a Job Offer and what you need to consider when heading into negotiations. Most articles that you read about job offers and negotiations will tell you that you should ALWAYS negotiate an offer. I am going to say IT DEPENDS. Let’s take a look at some common questions people have about accepting or negotiating job offers.
Is It Okay to Negotiate a Job Offer?
As I mentioned above, I am going to say it depends. For the most part yes, you can always negotiate an offer, but tread carefully and always be professional. Make it an ask, not a demand.
Be careful to recognize what your original requests were during screening interviews. For example, I have screened candidates who have stated that their salary expectations are $50,000 – $55,000. They are then presented with a job offer at $55,000 and come back to negotiate… asking for $60,000. This is an example where I would say you shouldn’t negotiate. Tread carefully.
If you have learned that the job is bigger than what the original posting stated, then bring that to the table with specific details. Or, if your current employer has given you a counteroffer at $60k, then bring that information forward.
What Can You Negotiate in a Job Offer?
So we looked at some negotiable and non-negotiable items in a job offer above. But, to be more clear, here is a list of what you can try to negotiate:
- Start Date (and End date if it is a Contract/ Temporary position)
- Total Cash Compensation (any of the components – salary, bonus, commissions, stock options, etc.)
- Time off entitlements (vacation, paid time off, volunteer days, time off to attend a school/program)
- Pension/Benefits waiting periods
- Professional Dues
- Work from home/ flexible hours (unless the job posting specifically states this information)
- Relocation expenses
- Signing Bonus
- Contract Completion Bonus
- Termination Clauses
- Expense reimbursement (automobile benefit (sales representative), cell phone, internet, etc.)
- Other perks (company cell phone, company car, etc.)
How Do You Counter an Employment Offer?
We talked a bit about this above, but I will reiterate, always be professional. Make it about asking questions, rather than providing demands. Collect information to support your requests and reasoning as to why you’d like to negotiate certain items within your job offer.
Is It Better to Negotiate a Job Offer Over the Phone or Send It in an Email?
Here is the best piece of advice I have for you….
You’ll likely receive the job offer by someone who may not even be the “decision-maker”. Take for example a recruiter for a large firm. They can be the ones to present an offer for the company. However, they may need to refer back to the HR department and/ or the hiring manager for negotiations.
So, I suggest that you send an email back to whoever presented you with the offer of employment and let them know that you’d like to negotiate some of the terms in the offer.
Ask them what would be the best way to discuss this…
Would they prefer an email that they can review and speak with the chain of command? Or, can they assist you with booking a meeting to discuss the offer with the appropriate person to negotiate some terms?
If you pick up the phone and call an HR department you might catch them off guard or at a bad time. By giving them a heads up email and scheduling a call, you’ll likely get a bit further in negotiating the offer.
Can You Lose a Job Offer by Trying to Negotiate?
The quick answer is yes. If you are unprofessional there is a good chance that an offer of employment will be revoked/ rescinded. Will you lose the offer by just “trying” to ask for more, not likely.
So you did your happy dance, you got the job offer, and had a chance to review it. Only you can decide if the offer is something that you want to try to negotiate or accept as is. Consider the 3 Must-Read Tips Before Trying to Negotiate a Job Offer. Then ask yourself if the items you want to negotiate may be considered negotiable or non-negotiable. If you are unsure, you can always directly ask the employer “is this negotiable”. If an employer states their vacation policy is non-negotiable, then trying to ask for more may just lead to frustration.
Ask questions and don’t make demands… you’ll get a lot further in getting what you want!
Best of luck in your job offer negotiations!