Salary Negotiation: It’s Not All about the Money

man working through a salary negotiation

Categories: Getting the Job

Although a job search can be long, tedious, and frustrating, there comes a day when a job offer is pending. That’s the day you rejoice and thank your lucky stars for the opportunity. But you shouldn’t get too comfortable just yet. Recent statistics show that 73% of employers expect candidates to enter a salary negotiation—yet 40% of applicant don’t bother, mostly out of fear. And stats are worse for women, with up to 80% forgoing the negotiation process.

Salary negotiations can certainly be nerve-wracking, whether this is the first time you’ve entered into such a conversation or you’ve been down this road before. Just as you don’t update your resume all the time and you get out of practice with interviewing, negotiating fair compensation and benefits is a learned skill. And that skill includes knowing what to negotiate. It’s not just about the Benjamins; a compensation package today extends far beyond the base salary.

Step Away from the Paycheck

If you’re like most people, you’re focused on the number: the salary that a company is willing to pay you. But that’s just one aspect of your entire benefits package. There are so many other components that can be of value to you. And often, these additional benefits do translate to additional dollars in your pocket.

Here are some of the areas to consider in your salary negotiation process:

Bonuses

There are several types of bonuses you can receive as a new employee, including signing (or sign-on), annual, or performance based.

  • A signing bonus is a one-time benefit that companies use to attract top talent.
  • An annual bonus is the most common and is based on achieving certain goals.
  • A performance-based bonus—sometimes referred to as a spot or discretionary bonus—is based on achieving a specific milestone. It can be awarded at any point and not just annually.

When negotiating these types of bonuses, highlight your track record of achieving measurable results and ask about the possibility of a higher bonus based on performance and meeting goals. You can negotiate for just one or multiple bonus options.

Equity

Equity may come in the form of stock options, restricted stock units (RSU), or employee stock purchase plans (ESPP). Research the company’s prior stock performance as well as its potential for growth. In some startup companies, this may be part of your initial job offer since they are primed for growth but may not have enough cash flow now to offer a higher salary.

In your salary negotiation, consider if the company is private or public. If private, ask if equity is an option or, alternatively, aim for a performance-based incentive. For public companies, inquire about the vesting schedule and ask for adjustments as needed.

PTO

Paid time off (PTO) is standard across the board, but you may be able to negotiate more vacation, sick leave, or holidays off. This is a good way to justify a lower salary by not having to put in as many hours.

When speaking with your potential employer, you can negotiate additional PTO or a flexible work schedule. A good tactic is to approach this from the stance of maintaining a healthy work-life balance.

Job Title

Some companies have a strict hierarchy with titles while others are more flexible. Regardless of the company’s approach internally, perception in the wider world can affect your future marketability. If the title you’ve been offered doesn’t align with the job description you’ve been provided as well as with your experience, you may want to suggest a more appropriate title that is a better reflection of what is expected of you.

Home-Office Stipend

If your position involves having a home office and using your internet or cell phone, your salary negotiation may extend to include a home-office stipend. Some employers may provide you with equipment to get you started, but it’s unlikely they’ll cover all your overhead—which is why this can be a valuable discussion point as you consider accepting the new role. Be specific about what you’d like to receive as your stipend and what it will cover.

Commuting Costs

For an in-office or hybrid role, some companies are willing to discuss a stipend to cover gas, bus or train fare, and/or parking costs. If you feel your commute will cause you additional expenses that will bite into your salary, you can take a couple of different approaches. These may include negotiating for a subsidy to cover costs or asking for a flexible schedule to minimize how many days you need to commute to the office.

Continuing Education and Training

If you consider yourself to be a lifelong learner, one aspect of your career that may be important to you is professional development. When conducting a salary negotiation with a company that shares that value, you may be able to incorporate a dedicated budget for you to obtain new skills through formal education or certifications. Additionally, attending conferences and tradeshows may be another way to upskill in your industry, so consider asking what the company is willing to contribute for you to participate at such events.

When to Launch a Salary Negotiation

Now that you have a sense of the components you might want to include in your salary negotiation, your next question is probably when to start the process. This should happen after receiving your formal job offer and before signing any contracts. During this time, you can have a constructive dialogue without creating any unnecessary delays. Both you and your potential employer need to enter into the conversation with a collaborative mindset where you are both looking to create a win-win situation that benefits you and the employer.

Best Practices for a Successful Salary Negotiation

While the right mindset is imperative, there are some other aspects that are integral to finding success in your negotiation process. These include:

  • Thorough research that includes learning about the company policies, industry standards, and what similar roles are offering.
  • Prioritizing your needs into what is nonnegotiable for you and what you’re willing to let go.
  • Remaining professional throughout the process. Be grateful and respectful. Avoid ultimatums or pitting one company or position against another.
  • Practicing your presentation, which includes rehearsing your points so that you can share them confidently, and understanding how to respond to objections you may encounter.

You Can Negotiate the Perfect Offer

When an ideal position is presented to you, your urge may be to immediately accept, but sometimes, it’s best to take a step back and negotiate. Remember that the process may start with salary, but it can extend far beyond the paycheck. Consider what you want in this new role and develop an approach that works for you. Above all, remember that a successful salary negotiation isn’t always about getting the best deal. In truth, it’s about building a foundation of trust with an employer that leads to a mutually beneficial working relationship and honors your contribution to the company.

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