The offer phase is your first and best chance to negotiate for what matters to you. You won’t have another chance until year-end, so seize the day and lobby for what you want. Being timid here will get you nowhere. In fact, it might just work against you in ways you never expected.
Aside from losing out on additional perks and salary, employers expect high-performing and sought-after candidates to negotiate. Not doing so might make you look a little desperate. It’s also important to remember that you have a powerful ally here: the hiring manager.
Being timid will get you nowhere. In fact, it might just work against you in ways you never expected.
During the offer stage, the hiring manager is probably eager to get you on board so you can help solve his or her problems. If what you’re looking for is reasonable, and if you’ve been a respectful and honest participant in the hiring process thus far, your new boss is very likely to go to bat for you with HR.
With that info in your back pocket, here’s how to negotiate your new salary, vacation, and health care.
It makes sense to start with the big one. For most folks, salary is the primary influencing factor in their decision to negotiate. At The Hired Guns, we believe that you should always attempt to advocate for your own interests, even if the offer is pretty solid. We want to reinforce the importance of doing this with a quote from the Salary Tutor himself, Jim Hopkinson:
One client told me she just finished managing a major project and was charging $80 an hour. I told her to try quoting $100 an hour in her next proposal. The result? The client didn’t blink an eye. She told me, “Jim, this was a 6-week project with about 270 billable hours. You just made me an extra $5,000. I can’t wait to raise my rates to $125 for the next one.
The lesson here is that you never know if you’re underselling yourself unless you try.
So how do you negotiate salary?
If you’ve already received an offer from a new employer, then you’ve got a ton of leverage. The simplest and most effective thing to do is to go back to them and let them know that you really want the job, but you have some concerns about the base salary. Back up your concern with solid, verifiable information like the current market rate for people with your title or skill set, and be sure to stress the value you’ll be bringing to their organization.
If you’re not sure how to determine your market value, Jim recommends the following steps:
- 1. Look for job postings in which the salary is listed.
- 2. Check websites such as payscale.com, salary.com, and glassdoor.com.
- 3. Reach out via social media to friends and family who work in the industry and ask them about a range.
- 4. Attend a local job fair, where you can poll several companies within a short time.
After doing this you should have a general range. Then have the potential employer name the number first so that you know the company’s exact budget.
Once you’ve got a range firmly in hand, document it. Show it to the person or people with whom you’re negotiating and see if they can match this range. Even if they can’t, it still might be worth taking the job if it aligns with your other priorities.
Vacation can often be one of the easiest things to negotiate. If vacation is a priority to you — and it should be — don’t feel like you’re being greedy or entitled when you ask for more. After all, only 14 percent of Americans take two weeks at a time for vacation. Compared to the rest of the world, we’re practically shackled to our desks.
During your interview, you should emphasize that there are many factors that you take into consideration when deciding on where to work, including salary, title, bonuses, coworkers, the type of work you are doing, and of course, vacation. Bring to the table facts about the importance of work/life balance and how crucial it is for you to recharge your batteries to maintain a high level of productivity.
Then have a few options available that you can propose to the employer to make it a win/win. Can you take a slightly lower salary in lieu of more vacation? Can you work remotely for part of the week or month? Can you demonstrate examples of successful projects that you were able to monitor while working remotely? The key is to ensure that:
- You will leave the company in good hands before your vacation
- Things won’t fall apart when you’re gone
- You’ll hit the ground running and at a higher level when you return
- Many employers will see vacation time as an easy tradeoff to make, especially if increasing vacation gives them a chit or two to use in the negotiation process. Remember, it’s all about give and take.
This one’s tough.
As you’re leading up to the offer stage, a mission critical lever to consider in your overall compensation package is how the contribution to health insurance is divvied up between you and your new employer. Over the last several years at The Hired Guns, we’ve found the employee contribution to health coverage is increasing while the employer’s is decreasing.
This isn’t to say that employers are the bad guys here. Far from it. They’ve had a rough go over the last several years as health care costs have steadily increased, so it’s no surprise that employees are going to feel a sting. Beware of a situation where a new employer contributes less than you’re used to, making your effective pay lower than it was at the job you just left. Simply put, that big salary bump you were counting on when you landed your new job might get chewed up by health care costs. If this happens to you, and you can show your new employer that taking their offer nets out to be about the same pay as your last gig, you might have leverage to negotiate for more salary, but only if you can present an effective case. Here’s how.
Before you sign on the dotted line, ask the following questions. Then run the numbers before accepting a new job. It’s great to get this information documented in an email, like so:
I’m excited to be at the reference check stage with Company XYZ. While you are checking my references, I’d love to get clarity about your health care coverage. I have put together a list of questions (below) that will allow me to evaluate it against my current employer.
- Can you share the employee contribution to healthcare with me? At my current company, I pay 10% and the employer pays 90%. What is the ratio at Company XYZ?
- What amount is taken out of my paycheck for an individual and/or family plan per month? [For all you singletons out there, if you think you’ll be starting a family in the next couple of years — ask for both.] I am currently having $400/month taken out.
- Who is the healthcare provider?
- What is the annual deductible? And what is co-pay per visit?
Don’t be surprised if the HR person doesn’t have this info at their fingertips. More than likely, they’re going to send you a hefty PDF about who the provider is, but without numbers you’re asking for. Keep digging. Ask for more and don’t feel weird about asking for it. Your financial security depends on it.
Now it’s time to run the numbers. For both your existing policy and your new employer’s policy, compare:
- Employer contribution percentage
- Your monthly contribution
- The deductible
- our co-pay
- Once you have an idea of what each policy costs you, subtract that amount from the salary you’re being offered. The number you’re left with is your total effective salary.
Do you like what you see? If the new offer gives you less than a 5 percent increase, you should have room to negotiate to sweeten the base salary. If the company doesn’t budge on base, then try to negotiate on getting a portion of your bonus guaranteed, increased vacation days, training and development, and other perks. There will be a less-than-zero chance that you’ll be able to change the employee contribution, so that’s absolutely not worth negotiating.
All things are negotiable, if you play your hand correctly. The key is documentation. Get the offered salary, vacation time, and health care early in the process and document it. Then compare it with market rate for someone with your experience and skills. If you don’t like what you see, don’t hesitate to come back to the table with another offer.
It’s important to negotiate, but don’t go overboard. We’ll tell you about the five salary negotiation mistakes that can cost you an offer.
28 Days to a New Job is a month-long Hired Guns course designed to help you maximize your competitiveness in the current job market. Learn the secrets to getting a job from hiring managers, recruiters, negotiation experts and more. Read our our introductory post here. Or Subscribe Now to receive 28 Days to a New Job as a daily email.