How to Negotiate a Job Offer

Imran is ecstatic – he's just accepted a verbal offer of his dream job. But, when the paperwork drops into his inbox, he realizes that he may have been a little hasty. The salary is at the low end of the range discussed at the interview. And some of the benefits, such as vacation allowance, are below the industry standard.

On the one hand, it's a solid opportunity with a reputable company, and has good long-term prospects. But, on the other, he'd be no better off financially and would have less holiday time to spend with his young family.

Many of us will face a similar problem at some point in our careers. But you don't have to accept an offer at face value. Many employers expect prospective team members to negotiate, so it's important to know how to approach the situation confidently.

In this article, we'll look at what negotiation is, and why it matters. We'll then take you through seven steps to help you to secure the outcome you want when you are offered a job.

7 Steps to Negotiating Your Next Job Offer

1. Consider the Whole Offer

2. Focus on Your Market Value

3. Establish Your Reasons For Negotiating

4. Assess Your Bargaining Position

5. Practice Your Delivery Style and Strategy

6. Conduct Yourself Professionally and Politely

7. Know When to Walk Away

What Is Negotiation?

Negotiation is when two or more parties try to reach a mutually beneficial agreement on an issue, while avoiding unnecessary conflict.

The process draws on our abilities to build relationships, communicate effectively, listen, solve problems, make decisions, assert ourselves, and influence others. So being able to negotiate successfully is a useful skill to have, whether you're discussing the terms of a new job or debating with your family what to do at the weekend.

But negotiation isn't easy. A survey carried out by CareerBuilder found that nearly half of U.S. workers accept the first job offer they receive. [2] Research also shows that women and younger candidates are the least likely to try negotiating. [3] Reasons for not negotiating include being scared of rejection, lack of confidence, and a fear that employers will retract their offers.

However, many companies do expect to negotiate, so they won't be surprised if you push back after receiving a job offer. And, if you make a good case, and the organization has room to maneuver, you could find yourself in a much better position.

So treat these discussions as a necessary part of the application process, and as a good opportunity to secure the offer that you deserve.

Why Negotiate?

Compensation is a prime consideration when you are deciding whether to negotiate the terms of a job offer. In the short term, you could end up feeling resentful if you settle for a job that you don't think fairly rewards your skills and experience.

You'll likely be frustrated and, in the long term, you could earn much less over your career, receive lower bonuses, and have a smaller pension pot when you retire. Research shows that people who negotiated their starting salaries increased their pay by an average of $5,000 a year. [4]

However, money may not be the most important factor. Labor market conditions – if there is high unemployment in your line of work, for example – may have to guide your thinking. But there is no doubt that it can pay to negotiate.