Salary Negotiations

Negotiate with Confidence before Starting Job

As most individuals who have worked for a reasonable period already know the best time to lock in a good salary is when one first joins a company. After that the employee may be lucky if he or she receives cost of living increases. Thus, the time to negotiate is when an offer is extended, and each person must determine his or her risk level. The reason is that as risk goes up so too does the potential upside return, but the downside is that one might still remain unemployed.

To successfully negotiate a person must have confidence in his or her own abilities, while at the same time letting the potential employer set the pace. When asked a salary expectation one can define the parameters based upon the salary received on a prior job, the industry salary range (which as noted in "Employment Trends" section of this website can be obtained from online government publications) and individual strengths.

Negotiate Salary before Negotiate Perks

When negotiating salary one needs to stress accomplishments and how he or she will add value to the company. The arguments need to be logical and the person needs to be flexible. Some companies in low cost of living areas do not have to pay the industry average and a $100,000 salary in a small town will go a lot further than $125,000 in many large cities, which is why salary demands need to be stated tactfully and diplomatically. (Many realtors have online cost of living calculators that one can use for free.)

One should first negotiate the salary package for a job before negotiating the perks. The reason is that a rationale employer will gladly give a $100,000 individual an extra $5,000 to cover moving expenses in exchange for a $20,000 lower salary. Thus, the skillful negotiator will get a commitment on his or her salary before addressing issues like stock options, insurance benefits, moving expenses, signing bonus, car allowances, vacation time and severance package if the company decides to go in a different direction.

Map Out Strategy & Ask for Final Agreement in Writing

When negotiating it is good to map out a strategy and to list the items that are important so that none of them are ignored. The reason is that the perks can often be significant. Signing bonuses can help with a new home or furniture purchases, and they can offset a hiring manager's being required to pay only so much. Similarly, while a start up venture might not be able to pay as much as one might want in base salary, its commission structure and stock options could make a person very wealthy if it turns out to be the "Next Microsoft."

As suggested by the "Interview to Triumph" section of this website, "Improvisational Theater" techniques can be applied to help move the salary negotiation process forward. This is not to say that a person should be a doormat, but instead that he or she should make a positive comment before addressing concerns either verbally or in writing. However, as is true of life in general, there are no guarantees that a prospective boss will bend, and it is usually better to be safe than sorry. Thus, it is commonly advantageous to ask that a final agreement be in writing if one is at a middle management or higher level.

Letters to Accept & Reject Offers

The objective of a job search is to obtain one or more job offers. Each of these offers requires a response. Typically, one handles both acceptances and rejections with a phone call and a written follow-up.

On the one hand, if a person wants to accept an offer he or she should write a short letter referring to the offer letter, clearly indicate an acceptance, summarize the terms of the offer and show enthusiasm. On the other hand, if someone wants to reject an offer he or she should express an appreciation for the offer, say nice things about the company and have short but pleasant words regarding the rejection.

Example of an Acceptance Letter

Former Job Seeker's Name

Home Address Information

Date

Name of Addressee

Company Address

Dear Addressee:

Thank you for your letter of (Date on Addressee's Letter) in which you offered me employment as a (Title of Job) with (Company Name). I am very excited about your offer, and I am glad to accept it.

To review the essence of our agreement, I will start work in the (Location) office on (Start Date). The compensation will be (Dollar Amount) plus (Whatever) benefits.

Addressee, I look forward to working for you as a (Title of Job). It is my intent to make a positive contribution to your team from the very beginning.

Sincerely yours,

Former Job Seeker's Name

PS Enclosed you will find the completed Employment Form, which you requested.

Example of a Rejection Letter

Former Job Seeker's Name

Home Address Information

Date

Name of Addressee

Company Address

Dear Addressee:

I enjoyed meeting you. Similarly, I thank you for your letter of (Date on Addressee's Letter) in which you offered me employment as a (Title of Job) with (Company Name).

Addressee, I was excited to hear from you, in part because of my very positive experience with you and your staff. However, after considerable thought, I have decided to accept an offer from another company. I believe this decision is best for my career at this time.

Your time and consideration are deeply appreciated. I hope that our paths will again cross, perhaps at (Professional Association Meeting or other place).

Sincerely,

Former Job Seeker's Name

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