Know your market value. Talk to people in the industry, talk to recruiters, do online research on websites such as Salary.com and Glassdoor. Becoming well informed will allow you to feel more confident in negotiating an offer if you feel it is below the market rate for your level of experience.
When the offer is low: Always thank the person who provides the offer. Let them know you are excited to help them meet their goals. You can then let them know that based on your skills, experience and market research, your expectations were to be closer to $X. You can ask them to help you understand their compensation philosophy and how they arrived at the offer and whether there is room to negotiate. This may generate more information about internal equity concerns, financial limitations, and education on the way they manage compensation within their company salary bands. Remember, at this stage they want you. You are the #1 candidate.
Know the components of the offer. Remember money is only one component of the total compensation package available. Is there the potential for variable pay – like a bonus? What are the benefits worth based on your contribution and the company’s contribution? What other extraneous benefits are there to working at the company – flexible hours, flexible commute, computer or phone purchase, etc.? These items technically “add” money to your bottom line.
The ask: Reiterate your excitement to join the team and let them know that you need some help getting to yes. You can ask for an increase in base, a sign-on bonus, an increased bonus target, more vacation, and/or ask for your base salary to be reviewed in 6 months as a condition of your offer. It is unlikely you will get everything you want, but it’s almost always the case they will improve your offer in some way.
Know when to stop. If you are offered compensation that is more than you were looking for and you believe it is fair, then it probably isn’t a good strategy to ask for more money.
When it is NOT advisable to negotiate:
When the offer is truly fair, based on your experience level and research.
When you have researched your salary and discovered that you are on the high end of the pay scale, which means you are being compensated above the market median in what is termed the 4th quartile of the range. You may want to be aware of how this may impact your future earning opportunities related to base salary increases.
When the company has truly made its best effort to meet you where you are by helping you understand the total compensation package, rationale for the offer, and communicates this is their best and final offer.
