Salary Negotiation Process

Before Negotiating 

Let’s say you have received an offer. You can either: accept it, reject it or ask for something else. If you decide to ask for something else, you need to know three things before you begin:

1. Know Your Market Value
   Your success in negotiating a better compensation package (and the only reason you should be negotiating) rides on data you have which suggests your market value is higher than that reflected in the offer. To determine your market value, see the Salary Research section. Often recent grads don’t have the experience or the expertise to warrant a higher salary. However, there are exceptions. Here is some salary negotiation “positions of strength” for recent grads:
   • You have relevant work experience (internships, summer jobs, etc.) that positively impacts your ability to do the job. 
   • You have a particular technical expertise, which is in high demand.
   • You have an advanced degree in a specific and sought-after area of expertise.
   • You have a written offer from another company that proposes a higher salary.
2. Know What You Want
   In addition to knowing your market value, you also need to know what you want and where you are willing to compromise. Salary is only one part of the total compensation package. A package might include any of the following:

   Base Salary

   • Base Salary
   • 401(k) or retirement type plans
   • Medical, dental, and vision benefits
   • Life insurance and disability benefits
   • Education reimbursement
   • Extras: computer, child care, etc.

   Stock or Stock Options

   • Signing bonus
   • Performance bonuses or profit sharing
   • Vacation time or sabbaticals
   • Relocation costs
3. Know The Job
   Before you start negotiating, you want to be clear on how your skills benefit the organization. This can be difficult to assess if you don’t have a lot of work experience. However, here is a technique that might help you. Try to identify the needs of each person who interview you and how you are a solution to their problems/challenges. Then, when you are negotiating, you have specific data about how you will add value. You will be able to confidently state that you are worth $5000 more because of your ability to create specific software, design the new manual, or write the necessary grant proposal.

What to Say and Do During a Negotiation

Step 1: Receive the Offer

Thank the hiring manager or human resources person for the offer and express enthusiasm for the position. Then, reiterate how important this decision is for you and ask for some time to think it over in order to make a good decision. If it is a verbal offer only, ask when you can expect to receive the offer in writing. 

Step 2: Evaluate the Offer

If you have any questions about benefits or other terms of the offer, ask the hiring manager or human resources contact for clarification. Evaluate the compensation package based on the elements listed in the Know What You Want section. Identify several backup options should your first request be denied. 

Step 3: Negotiate

You’ve evaluated the offer and done your homework. Now you are ready to negotiate. Here is a sample script for what you might say in a negotiation:

“I want to say again how extremely pleased I am to have the opportunity to work with you and this organization. However, I would like to discuss the compensation, as it is less than I had expected.”

The answer might be something like, “What did you have in mind?” 

“First, I’d like to know how you arrived at this compensation to make sure I understand the salary structure. I want this to work for both of us.”

Listen to the manager’s response. Then, say something like: 

“I understand the organization prefers to bring graduates in at the lower end of the range for this position because they typically lack the experience that warrants a higher salary. However, I feel my summer internship and research experience within this industry plus my leading edge technical skills warrant a higher salary.” (If you have other hard salary data from your research, diplomatically mention it here.)

Now let the hiring manager think and/or talk. If the compensation is not negotiable, you have a decision to make based on the current offer, or you may suggest the next option from your backup plan (such as a higher signing bonus, if applicable). 

The most important components of this process are: 

1. Know what you want and what is realistic based on solid research.
2. Communicate what you want clearly, diplomatically, and succinctly.
3. Stop talking and start listening once you have made a request.

After Negotiating

Once you and your manager have come to a satisfactory agreement, ask for something in writing that reflects your mutual understanding. This will likely be in the form of an amended offer letter. Follow up your acceptance of the offer with a thank you letter confirming job title, annual salary, and start date.  Congratulations…this is the start to your career!