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FAQs when Negotiating Salary and Benefits

Cite this article as: Jason Mance Gordon, "FAQs when Negotiating Salary and Benefits," in The Business Professor, updated December 13, 2019, last accessed April 8, 2020, https://thebusinessprofessor.com/knowledge-base/faqs-when-negotiating-salary-and-benefits/.


Next Article: Things to Do and Not Do When Negotiating Salary and Benefits

How do I know if the company is willing to negotiate?

First, you can do outside research on the company. The best way is to talk to a current or former employee. If you are working with a recruiter, you can directly ask her whether compensation or benefits are negotiable. Also, watch for signals that the hiring manager is willing to negotiate. An example would be, “why don’t you look over the offer and call me if you have any questions”. It is acceptable to ask your manager whether parts of the contract are negotiable. It is extremely rare that a company will not negotiate any part of your employment offer.

  • Note: An unwillingness to negotiate and rude behavior may foreshadow the work environment.

When do you Start Negotiating?

First off, you never begin negotiating any aspect of employment until you are offered a position. Any negotiating of compensation or benefits before that can be (and usually is) poorly received. Once you receive the offer, ask “when do you need an answer”. Generally, proposing a 48 hour period is acceptable to “discuss things with your loved ones”. During this time, you have the opportunity to calm your emotions, evaluate the offer, research the existing benefits, formulate questions to ask, plan on how to negotiate desired interests (if necessary).

With whom do you Negotiate?

Negotiating with the hiring manager is best. She will work beside you on a daily basis and is more vested in getting you on board comfortably without incident. As such, she will likely to be flexible with accommodating your requests. Negotiating with a human resource director is the next best alternative. They have guidelines in terms of salary and benefits. You may ask which benefits are flexible and which are standard. Ultimately, bringing on board the desired candidate is their primary function. They are incentivized to do so effectively.

  • Tip: It is best to negotiate compensation and benefits in person. Not surprisingly, you can receive valuable non-verbal feedback. Also, it’s harder to say no in person.

How do I research the position and company ahead of time?

Visit the company website to learn about their operations, mission, and value proposition. Read the job description thoroughly. Compare this job description to similar industry job positions. It will help you identify additional skills that you may be able to bring to the table. Gather this information by talking with current and past employees. They can be a wealth of information about operations, culture, hiring process, and who will be interviewing you. If you happen to be working with an outside recruiter (which is increasingly common), you can feel free to ask them almost any question. Just make certain to be humble and respectful.

How much is a benefit negotiable?

It depends upon the benefit. Often, a benefit is a we-offer-it-or-not scenario. Things like bonus or salary are negotiable. The general rule is that salary increases are usually small ($5,000-$8,000). Bonuses are generally far less negotiable, but the percentage increase may be higher, as this is often a one-time benefit.

How do I avoid looking greedy or difficult?

This is a valid concern with many applicants. You must make certain the negotiation does not become competitive. That is, negotiating the terms of employment should not seem like a conflict. It should simply seem like a necessary process for establishing the appropriate level of incentives. Here are some tips to make the negotiation process collaborative:

  • Reaffirm your excitement and intent to work for the company before bringing up the topic of adjusting compensation or benefits.
  • Don’t frame it as a problem or demand. Simply present it as a point of discussion to address in bringing you on board.
  • Don’t demand an immediate response. Bring up the issue of what you were hoping for in terms of a total compensation package. Do justify why you were hoping for a given level of benefits (remember, justification is based on industry averages and the value you bring to the company). Do not justify your request based upon personal needs. Always justify the request based upon the skills and value you bring to the position. Also, be prepared to address any company concerns or excuses. For example, if the request “throws off the salary structure”, ask where you fall in the structure and what does it take to be considered for the next salary structure. This may include making a request for a different employment title that qualifies you for a different salary band. After making the request – sit back and wait. The hiring manager may need to run the subject by HR or accounting to make certain everything works out. In any event, they will come back with a response shortly.
  • Second Offer – Whatever the company comes back with as a second offer is the final negotiating point. Unlike most negotiations that involve multiple back-and-forth offers, the compensation/benefits negotiation is generally a single back and forth. The company should, after hearing your aspirations, should make a good faith effort to accommodate those desires. If not, pushing the hiring manager for something that she is not able to give or willing to do harms the relationship. Also, being unreasonably demanding may cause the offer to be rescinded.

What if they ask me what salary I expect before they have made me an offer?

Companies routinely ask an applicant their salary expectations. The purpose of doing so is a screening function. They are trying to determine whether your expectations are in line with what they are able to pay. Also, particularly in small or mid-sized companies, they are also hoping that you will undervalue yourself. First off, ask whether they are making you an offer or collecting information. Armed with this information, you can more effectively address the questions. Here are some approaches to responding:

  • State your salary request – This is generally only a good idea if you have done all of the research possible on the company and position. If so, you should state your expectations with confidence and be able to justify it if requested.
  • Be Non-Specific – You may be able to leave the question blank on a form or avoid the question in a conversation. One way to avoid the question is to simply state a range that is based upon industry average. Also, you can qualify the response with “based upon the entire benefits package”.

What if they ask what I made in my previous job?

The purpose of doing this is to use it as a basis for your new salary. Many employers believe if they pay you a nominal amount over your previous salary that this is enticing enough for you to accept. It can be an effective method of saving money while making themselves appear generous. If asked, you should state the salary with any necessary qualifications. It may be that you received a lower salary because you have a flexible work arrangement, other non-obvious benefits, used the position to acquire additional skills for the future, or that the functions of the job were considerably different from the present job. Just as you cannot justify a level of compensation or benefits with irrelevant skills, your prior compensation and benefits should not be a basis for your current compensation and benefits if the two positions are unrelated. Once again, be explanatory and not defensive when explaining this to the interviewer. Another option is to give the total value of the benefits package, which could include bonuses, commission, additional opportunities for income (such as overtime), employer contribution to retirement or insurance premiums, travel allowance, reimbursements, etc.

What if the salary is much lower than I expected?

It may be the case that a business has misinterpreted the level of compensation or benefits necessary to bring someone into a position. If this is the case, it may be that what the company is offering and your expectations are too far out of line. At that point, you may want to do some additional research. You should always ask clarifying questions, such as: “Where does the offer fall within the company’s salary ranges?”. Ask about other benefits that may be non-obvious. If your company’s expectations do not meet industry average, you may be able to (respectfully) explain that you are looking for a position that is in line with industry averages. At that point, you will state your aspiration point with any justifications based upon your skill level. In doing so, you may want to bring in some information to show your employer about typical salaries for comparable jobs.
If this is not an option or does not work to improve the offer, you will need to make a determining whether negotiating a modest increase in salary will meet your needs. If no, you may need to say no to the offer. In any event, you want to be respectful and appreciative for the company’s time and consideration. Remember, never burn a bridge. You do not know when you will have to cross it again.

When applying, I’m afraid my prior salary will eliminate me from consideration?

Many people choose new positions that pay lower compensation or benefits that prior positions. This can be for any number of reasons – such as part-time or flexible work hours, remote work, better insurance benefits, location, nature of the job, etc. The best approach to this scenario is to be straightforward during the application process. You want to explain why you are so interested in the position. You can specifically bring up that the level of compensation is far less important than the other benefits. This actually sets the stage for the employer to craft an offer that better meets your aspiration point.

How do I ask about the potential for promotion or increase in benefits?

This is something that is easy to negotiate, as it often does not require the employer to make changes to benefits or compensation now. You should ask questions to determine where your offer stands in the pay range for the position. Find out what would it take to be in the next pay range. Specifically, what experience and qualifications do you need to reach the next level? What type of salary increases are typical? How often do employees get salary increases?

  • Note: Beware that if you are given a very high salary, increases are often smaller than those who have a lower salary because the company is trying to re-establish the salary parity.

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