How to Negotiate a New Job Offer

In my post from two days ago I wrote that my wife accepted a job offer from a new Silicon Valley tech company. The new salary she was offered was literally twice her current compensation, however that was after she negotiated an increase from the company's first offer. Here are some of the principles we used in renegotiating the offer:

1. Never Take the First Offer - as someone who has both hired people and who has received an offer or two in his life, I can tell you with a high degree of confidence that the first offer you receive from a company is never the best you can get. Hiring managers expect you to negotiate, and for that very reason leave some room for concessions. My wife was worried that if she tried to negotiate she would lose an offer she was really interested in. If you follow the strategy proposed below, losing your offer is a very remote possibility.

2. Negotiate Only if You Intend to Accept the Offer - always negotiate in good faith. If you have no intention of accepting the offer anyway, don't waste everyone's time by making demands. Say "no" and move on. Negotiating without intent to accept is unfair to the hiring company who gave you an honest offer.

3. Be Honest - Do not lie. If you don't have another offer, don't pretend that you do. If you have multiple offers, don't over-sell them. The last thing you need is to start with a new employer on the wrong foot.

4. Ask for What You Want to Get - don't sell yourself short. Ask for what you think is going to make you happy, not what you think the new company will agree to. I would even say that if the company immediately agrees to what you are asking for, you are probably asking for too little. Of course, don't be ridiculous in your demands. In our case, the new company immediately agreed to my wife's request for an extra $10K in salary, which basically tells me that we should have asked for more. Nevertheless, my wife is very happy, and that is the MOST important thing.

Keep in mind that getting a better offer before you join the company is much easier than getting a raise once you have already joined the company. Before you accept the offer, you have all the power and the company is courting you. After you accept the offer and start working, the company knows that switching jobs is not a simple task, and therefore will be less inclined to agree to your requests. How easy do you think it would have been for my wife to get a $10K increase to her salary within six months of her start date? Extremely hard is the right answer. Getting that "raise" before starting to work was a breeze.

6. Be Matter of Fact - when asking for the improved offer, be matter of fact. Don't threaten, don't plead, explain what you want and then shut up. For example, consider something like: "Thank you for the offer. I currently have two offers to choose from. I prefer your company over the other one I am talking to, and will accept your offer if you increase the salary package by $3,000". Don't over-explain your request. Give the company a "carrot" by making it clear that you will accept the offer if your requests are met.

7. Don't Paint Yourself into a Corner - Don't say that you will walk away from the offer if your demands are unmet, unless you really intend to reject the offer in that case. Regardless, doubt is a much more effective tool than an ultimatum. Rather than saying you intend to walk away unless you get what you want, consider saying that getting what you want will simply make the decision much easier for you.

It took some convincing, but after my wife agreed to my suggestion that she should negotiate her offer, she not only got the $10K increase she wanted, she also got an increase in her expected bonus. Since her compensation package stipulates a 10% bonus, the increase in base salary will also translate into an extra $1K per year in expected bonus payments. An outstanding return for a 15 minute phone conversation.