Money matters: How to negotiate a job offer

A Q&A with assistant professor Edward Wellman

Although it can be a terrifying thought, many of us will graduate from ASU at some point and start applying for entry-level jobs.

The compensation package you receive in your first job is vital because most future raises and bonuses are calculated based on the initial salary. Yet, The Atlantic reported in 2015 that 62% of college graduates don't negotiate their salary at all, even though 84% of employers would have been willing to negotiate. 

Why are recent graduates so unwilling to negotiate? 

Whether it stems from a lack of confidence or just not knowing how to do it effectively, W. P. Carey Management and Entrepreneurship assistant professor Edward Wellman is here to help.

Wellman, who has a Ph.D. in organizational behavior and has consulted for clients like NASA, Intel and American Express, is an expert negotiator. He has even taught a graduate-level class at ASU titled "Influence and Negotiations," and he agreed to a Q&A with The State Press to help ASU students negotiate their first contract after graduation. 

Q: Let’s say I’m applying for an entry-level job. At what stage in the application or interview process should I bring up salary and benefits?

A: The best time to negotiate salary and benefits is after you have received a formal written job offer. At this stage of the negotiating process, your power to negotiate favorable terms is at its greatest because the company has already committed to hiring you. 

If you attempt to negotiate prior to receiving a written offer letter, you run the risk that the company may not offer you the position if they perceive your demands are too extreme. Until you receive the written offer, your sole focus should be on convincing the company that you are the best person for the position, not negotiating salary.

Q: Many times employers will ask for a desired or expected salary range on the initial application or in the first interview. How important is my answer to these questions, and what is your advice for handling it?

A: Companies ask these questions because they know everything I said in the prior response. They want to begin salary negotiations before they formally offer you the position so that you will make more modest requests.

I would recommend answering these questions honestly and based on research you conduct into market standards. If the application doesn’t require you to provide a number, focus on communicating that you would like to be paid fairly for all the value you will bring to the company. 

If they require a number, provide a range that will not rule you out from continuing in the interview process. But, keep in mind that you are not wedded to your initial estimate, and can revise your estimate of what a fair or acceptable salary would be after you receive your written offer.

Q: Okay, now I got the job and received a job offer. What are some things I should do or research in preparation for a contract negotiation?

A: Doing your homework is extremely important. It is important to know what the typical salary is for the job you are being offered in your area. Websites like salary.com or Glassdoor are good places to look to get a sense of what that number might be. 

ASU Career Services also offers a number of helpful resources and can give you a sense of what prior ASU grads in your situation have earned. 

If you have personal contacts inside the company, it would also make sense to reach out to them to learn what the norms are around negotiating salary at that company. 

After you have done your homework, review your written offer letter, identify two to three things (max) that you would like to negotiate and use your research to prepare a counteroffer for those issues. Then work to develop a convincing rationale based on your research for why you are asking for more in those areas and why the new proposal is fair and benefits both you and the company.

Q: What is the best way to politely decline a salary offer without offending your future boss?

A: I think as long as you are respectful in your communications with your future employers and provide a reasonable justification for your decision, she/he will understand. If not, it may be a red flag that suggests the organization may not be a great place to work.

Q: A common stereotype is that asking for more than you want will help you end up with your desired salary. Is this good advice, and how high should I go?

A: It all depends on the situation. Although in many cases it makes sense to negotiate your salary if the company has already made you an offer that meets or exceeds industry norms in all categories, negotiating will probably not be successful and may make you look greedy. 

As the previous question suggested, one thing to keep in mind in salary negotiations is that if the negotiation goes well you will end up working for the company you are negotiating with.

So, you want to make sure to conduct the negotiation in a way that will strengthen rather than weaken your relationship with the organization. I would suggest coming in with a counteroffer that is on the optimistic side of what your market research suggests is fair and making sure to provide a strong rationale to support your arguments.

Q: Obviously having another job offer on the table will help you negotiate. But is there a way I can create or even manufacture leverage without another offer?

A: Yes, you can identify and work to improve your best alternative to a negotiated agreement. Your BATNA in a salary negotiation is whatever you will do in the event you are not able to come to terms with the company. 

You always have a BATNA and can improve it through preparation even if you do not have other formal job offers. For example, you could apply to more positions or consider taking a temporary job to make ends meet while you search for the job of your dreams.

Believe it or not, research on negotiating suggests that even if you can’t actually improve your BATNA, just imagining an attractive alternative can improve your persistence and outcomes at the bargaining table. So if all else fails, use your imagination.

Q: From a body language perspective, what are the most important things I should keep in mind when negotiating? How much do nonverbal cues like body language matter?

A: Nonverbal communication and body language is extremely important. If your nonverbal signals are not reinforcing your verbal arguments, the arguments will be less persuasive. 

You want to convey a similar impression during salary negotiations as you did during your job interview. That is, put your best foot forward. Make eye contact, smile, build rapport, be confident but not overbearing. Also, make sure you listen carefully and attentively to what the other side is saying rather than just waiting your turn to speak.

Q: What are some things I should take into consideration when negotiating besides salary?

A: In addition to base salary, performance-based incentives can be a good way to bet on yourself and increase your overall compensation. Also, keep in mind that although one-time perks can seem nice, they generally don’t offer the same value over the life of your career as benefits that reoccur again and again. 

So if you can, focus on things like salary, bonuses, location and other benefits that will not lose value over time.

Q: After agreeing upon a salary, how long should I wait to ask for a raise?

A: The reason why negotiating a fair initial salary for yourself is so important is that it is much tougher to negotiate a salary increase after you have already accepted a position. 

There is no hard and fast answer here, but I would say at least wait until enough performance data has accumulated that you can use it to justify your ask. It is easier to justify asking for a raise if you have a few favorable performance reviews and some nice accomplishments for the company under your belt.

Q: What is the best way to approach a boss and ask for a raise? 

A: Similar to the initial negotiation, pick the areas of your current job that you would like to improve, do research to prepare a convincing story for why changes in those areas would be more fair to you and also benefit the company, and then schedule time with your manager face to face to discuss your request. Make sure you begin by conveying appreciation for what you have learned or gained from your time at the company and working for the manager.

Q: What should I do if he or she turns me down?

A: I might spend some time reflecting on just how important the things you were negotiating for are to you. If they are very important, it might be time to start working to improve your BATNA! Your request will be more compelling if it comes hand in hand with a competing job offer or some other attractive alternative to remaining in your current role.

Q: Anything else to add?

A: Yes. Keep in mind that all aspects of your job offer are negotiable, including how long you have to make a final decision. If you are weighing multiple career opportunities, try to wait to accept an offer until you are very confident that it is the right choice for you. This might mean using your negotiating skills to push deadlines on other offers.

But, once you accept an offer do your very best to honor that commitment. Reneging on an acceptance puts the company you initially agreed to work for in a tough spot and may make them more reluctant to hire other ASU grads in the future. It can also negatively impact your professional reputation. 

Good luck negotiating everyone!

Editor's Note: This interview was edited for clarity and brevity.


Reach the reporters at rvatti@asu.edu and follow @rvatti42 on Twitter.

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