YOU LANDED THAT BIG JOB OFFER, CONGRATULATIONS! BUT DON’T BREAK OPEN THE BUBBLY JUST YET — IT’S TIME TO GEAR UP FOR THE TRICKY NEGOTIATION.
Talking about money can feel awkward, but not talking about it could mean missed opportunities. A recent CareerBuilder survey found that the majority of workers (56 percent) do not negotiate for better pay when they are offered a job. Those who avoid it say they don’t attempt it because they don’t feel comfortable asking for more money (51 percent), they are afraid the employer will decide not to hire them (47 percent), or they don’t want to appear greedy (36 percent).
But while most job candidates avoid negotiating, the majority of employers are expecting a counteroffer. Fifty-three percent of employers say they are willing to negotiate salaries on initial job offers for entry-level workers, and 52 percent say when they first extend a job offer to an employee, they typically offer a lower salary than they’re willing to pay so there is room to negotiate.
How much money is being left on the table? More than a quarter of employers who offer a lower salary (26 percent) say their initial offer is $5,000 or more less than what they’re willing to offer.
Financial considerations to consider
What’s important to an employee is an individual decision and is something the employee should decide before searching for a new job. You need to know exactly what you want from this next position: salary, benefits and vacation time, for example. You should know what you’re willing to compromise on and what you’re not — this will help prepare for negotiations when you’re offered a position.
Here are a few financial things to consider when an offer is on the line:
- Salary: In most cases, your compensation will be stated before taxes, so your take home pay may be very different than what is stated in the offer. If you need help in determining how much you will actually be bringing home in each paycheck, you may want to consult an accountant or ask your HR representative to help you with the calculations.
- Employer match: Many employers will match your 401(k) contributions up to a certain percentage of your salary. This is something you should take advantage of because it increases your earning and retirement savings. Be sure to check the amount of time it takes to vest in the company-matching portion. If you leave the company before you are vested, you will lose the amount your employer put in.
- Stock options: Stock options, if offered at your company, allow you to purchase stock at a set price, and typically at a price that is anticipated to be lower than the market rate. Stock options usually vest over time so be sure to understand when those opportunities to cash in are available to you.