As a wealth advisor, I’ve learned that one of the most important components of a financial plan is a person’s earning capacity. The average length of time you can expect to work is about 46 years (if you start working at 18). That’s also how long you’ll be saving for retirement.
It goes without saying that a higher income provides you with more opportunities to save, invest, and build wealth. However, many don’t consider this factor when accepting a job offer. CNBC recently reported on a study that showed around 58% of Americans accepted their current position without negotiating on salary or benefits.
Negotiating can be intimidating, especially when there’s a job you’re really excited for at stake. I’ve compiled some tips that I hope you’ll find helpful in negotiating salary after you’ve received a job offer. Because even if the offer you receive for a new job is satisfactory, you’ll never know unless you ask.
1. Research the market
Knowing the salary bands for the particular job helps ensure you are asking for compensation within reason. An employer might lose trust quickly if you’re asking for way more than market standards and potentially rescind their offer. Presenting a salary range can often help with the negotiation conversation.
2. Don’t leave anything on the table
If you’re leaving a role, you may be sacrificing future compensation (such as an annual bonus or unvested equity). Make sure you consider negotiating these in your new deal. A new company that wants to hire you will hopefully match what you’re giving up.
3. Focus on total compensation
Base salary is one of many forms of compensation. Employers often have more flexibility to offer non-salary compensation. Some examples of compensation and benefits that employers often have more flexibility to offer include:
- Performance based bonus
- Sign-on bonus
- Equity awards
- Career development budgets
- Travel / transportation allowance
- Additional vacation days
4. Be likable and professional
Negotiating is often a sales pitch. Focus on demonstrating why you’re worth the added compensation by highlighting your accomplishments and skills. If you can show your employer what you can do for them, they may be willing to offer more during negotiations. Make sure you act professionally and do not come off demanding.
5. Prioritize what’s important to you
If you’re unwilling to take the job without a certain increase in income, prioritize negotiating base salary (within market compensation bands), equity comp, and bonuses. If you have young kids at home with demanding transportation schedules, try to negotiate more workday flexibility. If you are comfortable with the salary, but have student loans, ask if they can offer you assistance to pay them down. It’s important here to focus on what you value the most and not specifically honing in on base pay.
6. Be flexible
What you’re asking for simply may not be within the company’s ability. Take this as an opportunity to negotiate other forms of compensation and benefits. For example, if you and the potential employer are stuck on a salary figure, begin discussing forms of equity compensation like stock options. This is often a form of compensation where the employer has more flexibility. Meeting in the middle can often be a win when you are prepared and are willing to compromise.
Accepting a job offer is an exciting new chapter in your life, however, it can also be stressful. Help set yourself up for success by negotiating with your future employer after receiving a job offer. Knowing that you have a higher salary locked in or guaranteed flexibility with your work hours can help settle any initial nerves you might have about changing jobs and help you feel confident knowing you’re making the right career move.
Did you know that a wealth advisor can oftentimes help you negotiate a job offer? Many of Marshall’s advisors have reviewed offer letters to help clients know what things to consider and points to negotiate. Feel free to contact our office to learn more about what services could be helpful to you.