Mastering the Art of Negotiation: A Guide to Securing the Best Offer in Corporate America
- Biz Wiz
- Jan 21, 2024
- 7 min read
Imagine this, you finished your interview loop and are hoping for a call from recruiting to say you got the job and for them to make you a fat offer. Your phone rings and it's the recruiter, "Hello TheBizWizzard, this is John from <insert dream company>, you performed well in your interviews and we would like to extend you an offer." What do you do? Do you take the first most likely generous offer and be content with having a job? Absolutely not, take pride in your skills and the fact that you were able to beat every other applicant to secure the position, now show them why they have to pay you what you think you are worth... or at least get close to it, but definitely more than that initial sucker offer.
Things to keep in mind if you have made it to the offer stage:
If you are being presented an offer, you are the top candidate - act like it.
It is outrageously inconvenient for a hiring manager to have to restart the interview process, so it is in their best interest to work with you.
There's a reason every single job that has a salary listed on the job posting contains a range... (e.g. Salary: $105,000 - $135,000)
Tips:
Do your research! Hit up glassdoor.com, blind, levels.fyi, any other resource you can think of to get an idea of what salary levels are in relation to your skill set.
Do not ask "Is this negotiable?" EVERYTHING IS NEGOTIABLE.
Your goals is to figure out where your skills would put you in that range. Bottom, Middle, or Top.
How to Navigate the Offer Stage:
When the recruiter tells you they want to extend an offer, thank them. Show your gratitude for being provided an opportunity.
Most recruiters will attempt to find out exactly what your current salary is, so they know how much they can low-ball you. Don't fall for it. Be polite but decline to offer your salary. It's okay to say, "I don't feel comfortable sharing the details of my current salary before an offer is presented." pull the old, show me your and I'll show you mine.
If they continue to push to get your current salary, tell them you will have to check with your HR department to see if you can even share that information due to signing an NDA. Eventually the juice will not be worth the squeeze and the recruiter will give up trying to get a number from you and be forced to provide their "best" offer (keep in mind this most likely will be at the lower end of the range.)
At this point they will be talking benefits, talking about free lunches, of all the cool things a company will give you.. but they will wait until the end to talk compensation. They are sales people, they are selling you on the dream of working at their company, enticing you to smell how green the grass is. Don't be impressed, a few "That sounds nice." or "Wows" go a long ways to help them get to the point. Compensation.
As they are just about to tell you the offer, they will tell you why they are making an offer at that level or for that amount. "Based on your interviews and looking at your previous experience, we leveled you at x and the compensation you would receive would be..."
Don't let this phase you, they are attempting to change your perception of your own self-worth. don't believe it, only you truly understand what you are capable of.
Then the recruiter will present the offer, "we are looking at a total compensation of $125,000 per year." Then they will ask you how you feel about that. This may be your first offer, you may have been struggling to find a job and really need this, stay strong and ask for them to break it down for you.
In most corporate offers nowadays, compensation is made up of 3 to 4 contributing factors:
Base Salary (This is guaranteed money)
Stocks (RSUs vesting over a certain time period - still guaranteed, but the price can fluctuate based on market conditions and stock price.)
Performance Bonus (THIS IS NOT GUARANTEED!!!)
Sign-on Bonus (THIS IS NOT ALWAYS OFFERED) but don't forget about it when negotiating.
So, let's take a look at the sucker offer the recruiter made earlier (using the breakdown from the recruiter).
Total Compensation Offer: $125,000
Base Salary: $100,000
Stocks: $40,000 (Vesting over 4 years) so technically $10,000 per year
Performance Bonus: 15% (Base Salary * Performance Bonus = $15,000)
Base ($100,000) + Stock ($10,000) = Total Compensation ($110,000)
Wait, what happened there? I thought the total compensation was $125,000? No, because $15,000 of the "total compensation" is performance based. If you don't perform, it's not guaranteed. So don't count it in your negotiations.
Also, no sign-on bonus, and you know the range for this position was listed at $105,000 to $135,000. So our goal is to figure out what part of the range the recruiter is putting you in to, and then try to get into the range above it.
(Top Of Range - Bottom of Range = Range Difference / 3) We divide the range difference by 3 to identify Bottom/Middle/Top of range. which in this case = $30,000
Bottom: 105,000 to 115,000
Middle: 115,000 to 125,000 <- You are at the top of the middle range.
Top: 125,000 to 135,000
Remember our goal is to get into that top range of 125,000 to 135,000, because you are right below it. You can pretty confidently assume you can negotiate your way into it. So how do you do that?
Negotiating / Making a Counteroffer
The recruiter just laid out the total compensation and they want to know what you think. Be polite and tell them, "I need some time to look at the numbers and compare, I'll reach back out to you tomorrow morning to review if you are free?"
The above lets the recruiter know that you aren't fully satisfied with the offer, and you may possibly have other offers to compare it against. (Newsflash, they don't know if you do have other offers.) This put them on notice that they will be negotiating for your skills.
Now draft an e-mail to the recruiter with your counteroffer prior to meeting them the next morning. Lucky for you, I am going to share the e-mail template I have used to negotiate multiple offers successfully at FAANG companies below.
Your goal is to hit the top of that range, $135,000. To do that you are going to want to make the recruiter feel like they have won as well so we will ask for above the top of that range at $145,000 and let them work us back down to a number close to $135,000.
E-mail Template:
Do a quick recap/intro to the recruiter:
Hello <insert recruiters name>,
Thanks for reaching out yesterday. I took the time to crunch the numbers last night for the offer you presented, this brought to surface a few follow up questions I need clarification on:
List any follow up questions you may have, anything that you maybe forgot to ask about in the call yesterday. Some examples below:
If we can come to an agreement on compensation, would it be possible to have a start date of XX/XX/XX? *Maybe it's review season at your current job and you can time a move after your bonus or stock grant hits.
<Insert company's name> fiscal year ends on June 30th. Would I be eligible for annual compensation review next June 2024 if my start date was XX/XX/XX? If not, this would mean it would be roughly XX months before I would be eligible for review in June of 2025, if my assumptions are correct.
Next, list OPTIONS to meet your total compensation requirements, this shows you are willing to play ball with them.
Counter proposal options:
Option #1
Base: $120,000
Sign-on: $30,000 ($15k 1st year, $15k 2nd year)
Stock: $40,000 vesting over 4 years @ 25% per year
Total Compensation 1st year: $145,000
Option #2
Base: $115,000
Sign-on: $20,000 ($10k 1st year, $10k 2nd year)
Stock: $80,000 vesting over 4 years @ 25% per year
Total Compensation 1st year: $145,000
I understand in some cases it may be easier to secure stock in lieu of base compensation. I believe in <insert company name> and the future growth of the company and I consider this a good faith gesture on both sides.
Justification:
I am capable of working at a <insert next level position> level, as that is my current position at a company that is relative in size to <Insert company name>.
I have a proven track record of improving processes and motivating individuals to reach their full potential and exceed business expectations, which is evident by my rapid growth at my current company.
I have a proven track record of planning, performing, and managing rapid large-scale projects. Given <Insert company name> current and future exponential growth, I believe the skills I possess would provide you a quick return on your investment.
I believe the options I have provided above represent a fair mid-point for both <Insert company name> and myself given my technical and managerial experience in <insert industry>.
If you would like to discuss the options I have provided or the justification in more detail, please feel free to reach out to me via phone. I am available after 2:00pm.
Thank you,
TheBizWizzard
By providing options, it shows you want to work with them to get to your number of $145,000 - ultimately, we don't care how they cut up the pie between stock, sign-on, base... we just care about making that total compensation for the year.
By Providing a justification you are resetting the perception of yourself, you are telling them exactly why you are worth what you are asking for and you should confidence in your abilities to perform in the role they are hiring you for.
By saying things like "I consider this a good faith gesture on both of our parts." and "I believe the options I have provided above represent a fair mid-point for both <Insert company name> and myself given my technical and managerial experience in <insert industry>." You are telling them where your experience aligns within the pay range.
Most likely, the recruiter will reevaluate their numbers, and come back with a counter to your offer. They may say "we don't do sign-on bonuses." If that's the case, then ask for more stock or base to compensate. This could be a lengthy back and forth process (weeks) but stay vigilant.
Eventually the recruiter will tell you "This is the final/best offer." At that point you have to make a decision if the compensation is enough.
Comments