According to a report in the Harvard Business Review, only 57% of highly educated men negotiate their salary. With highly educated women, only 7% negotiate an offer. Companies know that people are uncomfortable asking for money and they use this to their advantage, that is why you should negotiate a job offer.
Accepting a new position is an exciting time for almost everybody. Emotions are running high as the candidate thinks about all the new opportunities and challenges that lay ahead, and their employer (hiring manager, and HR) will be relieved to fill their position after what may have been an exhaustive search.
Unfortunately, many candidates let their emotions take over during the offer stage. They may be relieved to leave their current position, excited to reduce their time in morning rush hour, looking forward to their new office space, or just happy to have finished the interview process, but they may be leaving money on the table if they allow their feelings to control their decision-making process.
In some professions, it is customary to negotiate any offer that you are presented with (sales, business development, tech, C-suite). In other professions, offer negotiations are almost unheard of (low skill, low wage positions). But for most of us, your best opportunity to maximize your income potential is when first accepting an offer. Performance bonuses are a nice carrot but would you rather have a 10% bonus on top of a $75,000 salary or a 10% bonus on a $68,000 salary? The same goes for an annual COLA, (cost of living adjustment). Think about every extra $1000 in salary the same way you think about the long term effects of compound interest. For every extra $1000 you make in salary, the more your increase in performance bonuses, COLA, and company funded retirement contributions, compounds over the next 5, 10, 15 years.
As a recruiter, I talk about compensation early and often in the process with both the candidate and the client. For people not working with a recruiter, I recommend that they ask about the compensation range or midpoint for their pay-grade, and the pay-grade above them during the first interview; there is no point continuing the process and wasting time if there is no way forward to an offer. For example, if you are the top performing salesperson making $150,000 at your current company then there is very little chance that you would walk away from your book of business for a $85,000 salary with performance bonuses tied to company performance that might get you up to $125,000.
If you are interviewing for a position with large performance bonuses or commissions, the question you want to ask them is “What is the realistic earning potential for this position for the first, second, and third year?” and “what does your top salesperson make and how long did it take them to make it?” Let them know you past compensation and history of meeting sales targets and let them know what it will take for you to continue with the conversation.
At the end of the day, the hiring manager wants to fill the position with someone that they think will be successful at the job. HR wants to fill the position at the best price for the company and the candidate wants a new challenge. It doesn’t take much for the three parties involved to find common ground and close the deal at a price-point that benefits everyone. Hopefully you now understand why you should negotiate a job offer.
Paragon Search Group is an American biotech recruiting firm specializing in permanent positions in Process Development, CMC/Reg Affairs, Manufacturing, Project Management, and Quality for companies ranging in size from startup to Fortune 50.