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Negotiating your salary can be an intimidating process. However, to be in the best position, you should negotiate your salary before accepting the offer.
In my opinion, you are in the best position to negotiate your salary before accepting the offer and if you have leverage. Leverage means the company needs you more than you need the position.
You can feel confident in negotiating your salary before accepting the offer when you are currently employed, have years of experience, or have rare expertise/skills the company wants.
If this is your very first job or this is an entry level position, you should be cautious in your salary negotiation.
The saying goes, only negotiate if you are prepared to walk away from the job and be fine.
Negotiating your starting salary after accepting an offer will put you in a bad position as it is often too late. You will have lost your leverage as you have already accepted the job offer.
You can be starting off on a bad foot with the company and HR as you may seem flaky, difficult, or unreliable.
This is why the best time is to negotiate your salary before accepting the offer.
How to negotiate your salary before accepting the offer in 2 steps!
Find out what the salary market rate is
The first step in how to negotiate your salary before accepting the offer is to find out what the market salary rate is.
If you are happy with what the starting salary offer is, I would still encourage you to do some research of what the average market rate is or what the company average rate is.
It is possible that you are happy with the starting salary offer if it is at the top of your personal range because you were underpaid at your previous job. The last thing you want is to find out an equally experienced colleague is making more than you at your company after you start.
Do some research and find out if the salary in your job offer is fair. Is it comparable to the market rate?
This is a good resource and starting point to find the market rate of the occupational employment statistics from the US bureau. It can also be separated by location.
Keep in mind your years of experience in the field when considering the market rate.
If you are in a FAANG company (Facebook, Amazon, Apple, Netflix, Google), levels.fyi is a site where people submit their offers for you to compare.
If you are unhappy with the salary offer, decide what salary you will accept. Negotiate your salary before accepting the offer for 5-10% more than what you will accept. More than likely the company will counter-offer and meet you somewhere in the middle, which is what you would have accepted anyway.
If your job is for a higher-level position or a higher salary position, it may be easier for the company to offer you other benefits than a salary increase. Some companies have an “internal equity”, which means your salary can not be significantly higher than a colleague with the same position. Having your salary be so close to your manager’s salary will also be uncomfortable.
In these situations, you can negotiate your salary before accepting the offer in other ways: Negotiate for other benefits instead of a salary increase, which we will discuss in the next point.
In a similar line of thinking, if you are happy with the salary offer and it is comparable or better than the market rate, do not push for a salary negotiation. If the salary being offered is already outrageously high, you should not negotiate your salary before accepting the offer. You may seem unreasonable or ignorant asking for more.
If you are happy with the salary offer, there are other benefits you can negotiate for below.
Negotiate for other benefits if you are happy with the salary
If the salary being offered is in line with the market rate in your research and you are happy with it, you can always negotiate your salary before accepting the offer with other benefits!
If you are happy with your starting salary in your job offer, you can negotiate for a signing bonus.
This is a one-time bonus that you receive when you are starting at a company. You may have to stay at the company for a certain amount of time before you receive this one-time signing bonus.
Although these benefits do not directly increase your salary, they do directly increase your net worth.
One thing that you can negotiate for is an increase in your Defined Contributions pension. Defined Contributions pension is an IRA in United States and an RRSP in Canada.
A defined contributions pension is when you contribute your own money into an IRA or RRSP and your company will match your contribution up to a certain percent or a maximum.
For example: Your company can offer to match 100% of your contributions up to 3% of your annual salary.
This means that if you make $50,000 a year, and you decide to contribute 3% of your own money into your pension (3% of $50,000 = $1,500 annually) every paycheck, your company will match this 100%.
Meaning your company will contribute $1,500 annually into your pension as well. This is FREE money the company is giving you. You should ALWAYS contribute to your defined contributions pension if you have company matching.
Most of the time, as an incentive to stay at the company longer, companies usually increase their percentage contribution to your pension the longer you stay at the company. After 3 years at the company, they may increase your defined contributions pension to 5%.
If you are happy with your salary in your job offer, you can always negotiate for a better pension package!
Stock options are usually common if the job is at a start up company. If you have a lot of leverage, you can negotiate for more stock, a higher percentage of the company, or for a shorter vesting time.
Stock options are usually vested after a certain amount of time.
For example: A company may offer you 4% of the company vested after 4 years.
This means you will get 1% of the company every year you are with the company, up to 4% after 4 years.
You can negotiate for a higher percentage or a shorter vesting time.
Moving is expensive!
Not only is moving stressful, but it is also expensive. If the job requires you to move for the position, you can ask for a relocation assistance. Especially if you are moving across state or country.
Don’t start your new job with debt and ask for relocation assistance.
Non monetary benefits
These benefits can often be overlooked because they do not directly increase your salary. However, although they do not directly increase your salary, they can have a significant impact on your job satisfaction.
These non-monetary benefits can contribute to your work-life balance and overall happiness. You could negotiate for more vacation days or paid time off.
Companies in the United States are not legally obligated to give employees any vacation days. Companies in Canada have to offer a minimum of 2 weeks vacation days to employees.
The number of vacation days offered usually increase after years of service at a company.
For example: After 3 years at a company, you may receive an addition week of vacation in your benefits.
If you are happy with your starting salary and work life balance is important to you, you can negotiate for more vacation days or PTO.
These are the monetary and non monetary benefits in how to negotiate your salary before accepting the offer. Best of luck!