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The offer and how to negotiate

August 3, 2021

Two people discussing something using a laptop

Generally, an offer will be verbally presented to you and most often communicated over the phone. So, what do you do if the salary on offer doesn't meet with your expectations? If you find yourself in this situation, it's time to put your negotiating skills into practice.

Money talk

If you have been working with a recruiter, they will have represented you at an agreed level and you can generally expect that an offer will fall close to that mark.

If you are unhappy with the offer, your consultant will act as your adviser and complete negotiations on your behalf.

If you are dealing directly with your future employer, there are some important guidelines to help with expectations prior to the offer.

Know what you want: How can you negotiate a great salary if you don't know what you want and what you are worth? This will require some research. Research the role the market and industry salary trends and if in doubt, speak to a specialist recruiter in your field for advice. When setting your expectations, be reasonable and practical. Unless you are dramatically changing careers or have been underpaid in your last job, expecting a salary which is vastly different from your current position is risky and will need justification. Set your bottom-line and your stretch target so that you can feel confident in your expectations.

Let them go first: When you are interviewing for a role directly, don't volunteer or initiate questions about salary unless the company raises the subject. If the first you hear of the anticipated salary is at the end of the process, this is when you negotiate. If you have done your market research, you will know the sort of salary level to expect and likely have been applying for roles that can meet your remuneration expectations.

Provide a salary range: If you are asked to provide your salary expectations, present a range rather than a fixed figure, i.e., $150,000-170,000 package. This suggests that you are flexible and open to compromise. Ensure that the range is not too broad, for example a $50,000 difference is impractical and implies you have no idea about what the position should pay or what value you will provide. Try to give a range where your bottom line is a little higher than what you actually want.

Consider the total package: Packages and conditions can differ substantially depending on the company, industry and role type, so making a decision on the base salary alone can be risky. Also consider the bonus and/or commission structures, car allowance, insurance benefits, leave allowances, flexible work schedules, legislative employer contributions and any tools of the trade provided.

'N' is for negotiation

Be prepared: In negotiating a counter offer, you will need to clearly articulate the reasons the company should pay you more than their initial offer. Whether it is previous salary levels, industry standards or a market trending upwards, you must be confident in your reasons. It is important to frame your information in terms of commercial benefit and value-add to the company. Ask yourself, what can I bring to this organisation or position that can justify higher remuneration? Know your own value-proposition and practice articulating this confidently.

Ask for what you want: This is not the time for subtleties or implied reasoning. Asking for a "little bit more" is not going to achieve your desired outcome – you need to quantify your expectations. It is important that you state clearly what you are looking for, whether it is an increased base salary, an extra week of annual leave, or larger bonus structure. Your prospective manager needs a clear indication of your requirements if he or she is to reconsider the offered salary.

Be calm and confident: Negotiations can be unnerving so the way in which you communicate with your future employer at this time is paramount. Remain calm, professional and in control and don't let the pressure get to you. The basis of negotiation is mutual respect and understanding. Don't make outright demands as you will come across as aggressive and difficult to work with. Demonstrating that under pressure you are effective and cooperative will work in your best interests.

Don’t lose sight of what first attracted you to the role – was it just about the money, or can you compromise on salary in order to work in a challenging new role? Both parties want to achieve a win, so respond positively by thanking them for the offer and clearly communicate the amount or terms you are hoping to receive.

Top Tips

  • Do your research so you are confident in what you want and what you are worth.
  • Do be honest about your most recent salary package. A quick reference check can expose the truth and see an offer immediately withdrawn.
  • Don't rush in. When you are made a verbal offer it is easy to be caught up in the excitement. Stay calm and take some time to think it through properly – you don’t have to accept it immediately and it is very hard to negotiate when you have already accepted in principle.
  • Do review the full terms of the offer and contract (including any additional benefits or bonus payments). Confirm the timeframe within which you need to either accept the offer or commence negotiations.
  • Don't threaten to walk away unless you mean it. Negotiation does not have to include an ultimatum. If you really can't come to agreement you might need to let the role go.