Negotiating Salary and Evaluating An Offer
When you are in the job search process, sooner or later you will need to prepare yourself to have the money discussion with an employer. You may be asked to add “Salary Requirements” in an online application before even starting the interview process. or to provide a range of desired salaries early on in the process. Doing this research well in advance will ensure that your expectations are realistic so that you don’t over-price yourself and lose out on an opportunity – and just as importantly, that you don’t under-value yourself in the job market.
As you start this process, take the time to understand your “salary range.” Your desired salary range starts with the absolute minimum this role may offer that you could accept, up to the high end of the salaries you’re able to find for such a position. Your ideal number falls typically somewhere in between, allowing for adjustments based on the specific role for which you’re interviewing for and the location(s) in which you hope to be. How do you do this? Research.
Begin by identifying your minimum requirements – how much money you will need to support yourself. Estimate rent, food, commuting and clothing costs for the cities or areas you are considering (again, NerdWallet is especially helpful here). Add in your student loan or other debt payments, if you will have them, and always try to factor in some amount for savings. Make sure you factor in incidental or miscellaneous expenses, such as any costs associated with your social and entertainment activities. Then total everything up to identify your minimum number.
Next, learn about salaries typical for your industry of interest and for new graduates – a great place to start is with the Career Survey reports produced by Penn Career Services for each graduating class. You can also check out reputable online resources (Glassdoor, Nerdwallet, Salary.com, etc.), paying attention to regional and national averages and cost-of-living differences as well as salaries of your target organization’s closest competitors, and perhaps even by talking with people currently working in the field. This will give you an idea of the median or higher end of the range of salaries you may wish to seek.
Note that once you’re interviewing, know that salary negotiation should be one of the last steps in the job search process, when the employer is ready to make you an offer. It is a best practice as the candidate to wait for the employer to introduce the subject.
Don’t make the mistake of walking to a job interview without preparing yourself
Rules for Negotiating a Job Offer
You’re in a third-round interview for a job at a company you like, but a firm you admire even more just invited you in. Suddenly the first hiring manager cuts to the chase: “As you know, we’re considering many candidates. We like you, and we hope the feeling is mutual. If we make you a competitive offer, will you accept it?”
You’ve received an offer for a job you’ll enjoy, but the salary is lower than you think you deserve. You ask your potential boss whether she has any flexibility. “We typically don’t hire people with your background, and we have a different culture here,” she responds. “This job isn’t just about the money. Are you saying you won’t take it unless we increase the pay?”
You’ve been working happily at your company for three years, but a recruiter has been calling, insisting that you could earn much more elsewhere. You don’t want to quit, but you expect to be compensated fairly, so you’d like to ask for a raise. Unfortunately, budgets are tight, and your boss doesn’t react well when people try to leverage outside offers. What do you do?
Each of these situations is difficult in its own way—and emblematic of how complex job negotiations can be. At many companies, compensation increasingly comes in the form of stock, options, and bonuses linked to both personal and group performance. In MBA recruitment, more companies are using “exploding” offers or sliding-scale signing bonuses based on when a candidate accepts the job, complicating attempts to compare offers. With executive mobility on the rise, people vying for similar positions often have vastly different backgrounds, strengths, and salary histories, making it hard for employers to set benchmarks or create standard packages.
In some industries a weak labor market has also left candidates with fewer options and less leverage, and employers better positioned to dictate terms. Those who are unemployed, or whose current job seems shaky, have seen their bargaining power further reduced.
But job market complexity creates opportunities for people who can skillfully negotiate the terms and conditions of employment. After all, negotiation matters most when there is a broad range of possible outcomes.