A job offer is good news—unless the starting salary is less than you were hoping. When that happens, it can be hard to know what to do next. Should you negotiate the salary offer—or simply take what you’re given?
A CareerBuilder survey reports that more than half of workers (56%) don't negotiate for more money when they are offered a new job. The reasons include not being comfortable asking for more money (51%), worrying that the employer will decide not to hire them if they ask (47%), or not wanting to appear greedy (36%).
Note
Even though many job seekers aren't comfortable negotiating, many organizations do expect candidates to make a counteroffer.
However, 53% of employers say they are willing to negotiate salaries on initial job offers for entry-level workers, and 52% say when they first extend a job offer to an employee, they typically offer a lower salary than they’re willing to pay. So, there is room to negotiate for many candidates.
When you find yourself with a surprisingly low offer—or simply feel you deserve better or could get more—it's reasonable to consider negotiating your way to a better salary. Here’s what you need to know.
Key Takeaways
- The majority of employers offer a lower starting salary in the expectation that candidates will negotiate pay.
- If an employer offers you a lower starting salary than you hoped to receive, you can make a counteroffer.
- Always negotiate a counteroffer based on salary research, not your financial situation or gut feeling about fair pay.
- Don’t forget about non-salary benefits and perks when figuring out your compensation.
What is a Counteroffer?
A counteroffer is made by a candidate in response to a salary offer from an employer. Typically, this happens when the candidate feels that the compensation is out of line with the market.
An employee might also issue a counteroffer to their current employer if they are awarded a promotion and don't agree with the new compensation offered for accepting that position.
A counteroffer can also be made by a company when they learn that a valued employee has received an offer from another organization. In this case, the employer would offer more money or other incentives for an employee to stay with the company.
When considering a counteroffer, there are several things you can do to increase your odds of getting more pay, and a few things that could stand in your way.
Should You Make a Counteroffer?
If you have received an offer that's not what you expect, you do have a few options:
- Ask if there is any flexibility in the starting (or future) salary
- Consider perks you may be able to negotiate in addition to or instead of extra salary
- Turn down the offer, realizing that the company may not make a counteroffer
- Create an opportunity for more discussion
Do This:
Research salary ranges for your desired position
Know that greater than 50% of employers expect to negotiate for entry-level job salaries
Understand that some employers will offer the lowest pay they think you'll accept
Consider how much you need or want the job, market rates, other opportunities, and the current job market
Focus on facts, such as the value you bring, rather than on emotions
Be prepared to ask for other benefits if a higher salary isn't an option
Don't Do This:
Rely on your gut feeling or financial needs when choosing your counteroffer range
Set the bottom of your range lower than what you're willing to accept
Negotiate too aggressively or they may rescind the offer
Expect to get more if you're not willing to ask
Negotiate just for the sake of negotiating
Make a bluff if you're not really willing to walk away
How Much Compensation to Target
When you ask to discuss compensation, you don’t need to specify how much more money you’re hoping to make—that discussion will unfold after the hiring manager sees your meeting request and agrees to have a conversation. (Hopefully. More on the other possibility in a moment.)
Ideally, you'll have set your target salary range before the first interview, but if you haven't, there's no better time than the present. You want to have a good idea of how much you're hoping to get—and willing to take—long before you start negotiating in earnest.
Research is crucial for this. Don't make the common mistake of setting your price based on a gut feeling or financial obligations. By doing so, you could either be pricing yourself out of a job you want or selling your skills far more cheaply than necessary.
Instead, research salary ranges for the exact job title and duties, as determined by the job description and what you've learned during the interview process. Look at free salary calculators on sites like Payscale, Glassdoor, Indeed, and LinkedIn to get a sense of what’s reasonable based on the job title, location, and qualifications.
Finally, don't set the low end of your range lower than you'd like to accept. Hiring managers have a budget and may even get bonuses for keeping costs low.
Note
They'll often offer you the lowest number they think you'll take—not because they want to lowball you or devalue your skills, but because it's their job to stay on target, budget-wise, as well as hire good candidates.
What Can Happen When You Counteroffer
But while you can negotiate, the employer might rescind the job offer if you do so too aggressively. Some employers aren't thrilled with candidates who go back and forth over salary offers multiple times. Also, there may be a set salary range for the position and there may not be much room for further negotiations.
It's possible the negotiation process could leave both you and the employer feeling frustrated and disenchanted. In an ideal world, this situation won't arise because you will have gotten a sense of what the company has in mind for a salary during the interview process, and made your salary expectations clear.
Of course, it's also possible that the negotiation process will go smoothly, resulting in a counteroffer that's everything you want, and is acceptable to the hiring manager and company as well.
How To Negotiate a Counteroffer
If you feel that you deserve more and that your expectations are reasonable based on the position and industry, use the tips and strategies below to negotiate a counteroffer.
Note
One of the best ways to open discussions after you have received an offer is to ask for a meeting to discuss the offer.
1. Know your value and the industry rate for your position. The best negotiation tactics are rooted in facts, not emotion, so spend some time researching. When negotiating your counteroffer, you'll need to make a case for why you should receive a better offer. This case will be built on your value: You'll want to remind the employer of why you're a particularly good match, offering experience and know-how that other candidates do not. (Most likely, employers would prefer not to restart the interview process; they picked you for a reason!)
As well, you'll want to let employers know about the market value for the position. You can mention the salary range for similar positions at other companies.
2. Don't rush it. Since you need to have a lot of information to make a reasonable counteroffer, it's worth taking some time before you begin negotiations. Start by sending a thank-you note for the job offer and establishing a timeline for when you'll be in touch.
3. Don't forget non-salary benefits. Before you crumple your offer letter into a ball, look beyond the salary. Perhaps you get other benefits and perks (such as tuition reimbursem*nt, the ability to work from home a week each month, etc.) that make up for the lower salary. Or, if you don't, perhaps there are some non-salary benefits that you could ask for that would make the lower salary more palatable. You can ask for a signing bonus, for health care coverage to begin immediately if the company has a 30-day waiting period, additional vacation days, coverage of your moving expenses, etc.
4. Don't push too hard. Think about why you're negotiating—is it because you genuinely think that the position merits a higher rate, or are you negotiating for the sake of negotiating? If you are comfortable with the offer, you might not want to push too hard just to get a little more. The very best job negotiations end with both employee and employer happy with the resolution.
5. Don't say too much. Some things won't help your case when you're negotiating salary. Don't talk about your financial situation during a salary negotiation—your salary should be based on the market and your qualifications, and nothing more. Also, try to avoid discussing your current or previous salary, as this can backfire and result in a lower offer.
6. Know what's really important to you. You're going to negotiate differently depending on your circ*mstances. Getting a job offer after you've been unemployed for a year is different from getting an offer when you're employed at a tolerable job. Don't bluff if you are not actually willing to walk away from the job offer. But if you are lucky enough to be considering two job offers, do use that to your advantage.
7. Use a template to frame your request. Not sure what to say to get the ball rolling? Review a counteroffer letter and counteroffer email message you can tailor to fit your circ*mstances. Just be sure to customize your request to reflect your situation.
Frequently Asked Questions (FAQs)
What is a reasonable salary counteroffer?
A reasonable counteroffer depends on the job market for similar positions in your area. However, keep in mind that the hiring manager has a budget, which means that a large increase is less likely. A counteroffer of 10% additional pay is more likely to be successful than a counteroffer of 50%, for example.
Should you accept a first salary offer?
Most hiring managers are willing to negotiate, so it’s almost always a good idea to counteroffer. Even if they’re unable to budge on salary, you might gain additional time off, a flexible schedule, or other perks.
