After sending countless resumes, meeting with multiple recruiters and interviewing for several positions, you finally hear, "we'd like to send you an offer letter."
Congratulations—savor the moment! Celebrate!
You'll likely feel equal parts relief and excitement. And you'll be eager to accept the offer immediately, perhaps fearing that the opportunity will disappear if you don't respond right away.
Helpful advice: Take a deep breath and resist the urge to respond instantly.
Pause and consider a counteroffer.
Yes, you read that correctly. Even if it sounds a little crazy, take a deep breath, review the offer and think about where you might be able to ask for more.
You're not alone if the thought of negotiating makes you uneasy or nervous.
More than three-quarters (87%) of people who countered on pay and/or benefits received at least some of what they asked for. But more than half (58%) of young professionals aged 25 to 35 accepted an offer without negotiating.
Research shows that Generation Z and Millennials are more willing to negotiate their salaries than Generation X and Baby Boomers. Despite being bolder and asking for more out of a job offer, most are still uncomfortable negotiating. The truth is that successful negotiation takes a bit of confidence and practice.
The good news is that you can improve your negotiation skills. This toolkit will help you prepare for the tough conversations that are part of the negotiation process, and help build your confidence to ask for an increase in salary or benefits over what was first presented.
Why do you need to negotiate?
It's natural to fear speaking up and having your request rejected, which, in turn—and unfortunately—may cause further negative thoughts to spiral. For example, you might unrealistically think that your skills are not good enough for the job or that you don't deserve what you're asking for. Research has proven that when fear and anxiety keep you from counteroffering, you'll receive a lower salary and fewer benefits than what the employer was willing to pay.
And most (84%) of employers expect new hires to negotiate.
Still not convinced you should speak up. Consider these statistics from the Society of Human Resource Management (SHRM) webinar: Negotiating a Salary Offer: Deal or No Deal:
- 60% of employers say a counteroffer has no impact on how they see the candidate.
- 26% of companies have a more favorable view of the candidate.
- 14% of organizations have a more negative view of the candidate.
The two main reasons people shy away from asking: fear and a lack of information.
Those who don't negotiate worry:
- They will be told "no."
- A company will rescind an offer.
- An employer will think less of them.
- A negotiation will hurt a work relationship, especially if the hiring manager will be their boss.
Countering an offer gives hiring managers insight into a critical skill you'll need in any job. You're not being hired to be a completely robotic "yes" person. At some point, you will need to push back on a decision and justify why the other individual or team should reconsider. Recognizing the value of this skill early in your career is valuable each time you consider a new position, ask for a raise or navigate a complex problem that requires buy-in from multiple stakeholders.
Pro Tip: The first offer is not always the best offer, and, usually, there is some room for negotiation.
It's important to acknowledge that your interests and the employer's interests often are typically conflicting: You want to secure the highest salary possible, and the organization strives to hire you as cheaply as possible. But how you approach this hurdle makes a significant difference.
There are two approaches to negotiations: distributive and integrative.
Distributive negotiation treats the process as a win/lose scenario. It introduces a competitive feel where there can only be a winner and a loser—similar to a sporting event. Securing a higher salary is a "win." But if you don't succeed, it feels like a "loss."
If you decide to accept the position even if you score a "loss" on salary, then disappointment may hang in the air as you begin the job. This could dampen your enthusiasm for projects and building relationships with your new colleagues. Also, if you view a lower salary as a "loss," and decline the offer, then you could miss a potentially great opportunity.
Integrative negotiation requires a different mindset, one that seeks to find a middle ground, a win/win outcome for both parties. It's an interactive process where both you and the employer look for ways to collaborate, problem-solve, and get creative to find a solution. For example, a hiring manager may have little room to negotiate on salary but might be able to offer more a generous benefits package that can make the offer more appealing.
Consider the employer's point of view
Companies expect negotiation. But it's also important to understand how the process works from their side of the table. They are just as eager to hire you, as you are to start. They have invested time and resources into interviewing you and want to make the best offer possible. And they may also worry that you have multiple offers to choose from, so they want to be able to meet at least some of your requests.
However, no company has an unlimited budget. Compensation is built around ranges, and a complex formula is used to determine the range for a particular position. Sometimes there might be set pay scales (as in union shops, for example). So, there might be only so much wiggle room for the employer on salary.
Focusing solely on money can also send the wrong message. It's true that salary increases often come from a new job, but frequent changes can suggest a short-term commitment. Employers have faced record-high turnover and make an offer hoping a person will stay long term rather than jump at a higher salary.
Pro Tip: Taking the time to explore the employer's point of view provides insights into what really matters. And discovering what really matters can help you frame a counteroffer that gets you to a win/win outcome.
When is the right time to talk salary?
Interviewing for a job is a lot like a first date. There's a level of nervousness about wanting to make the right impression while deciding if it's going to be the "right fit." No one, organizations or individuals, wants to invest a significant amount of time courting one another to find out a salary range is a dealbreaker.
Few recruiters are willing to enter a discussion with the hiring team without first exploring all aspects of the salary. By that stage, recruiters must understand the salary expectations. An employer that fails to discuss salary early runs the risk of a candidate blindsiding it with a figure that's too high.
During the interview, the hiring manager may ask about your desired salary. As a job candidate, you might hesitate to discuss salary right away for fear that it might eliminate you from the hiring process. However, laying the groundwork for salary discussions in the first phone call can help both you and the employer avoid wasting time.
Discussing salary this early in the process saves time down the line, but you also don't want to undersell yourself. Here are a few options for starting the conversation while leaving the door open once more information is available:
- Option 1: "I would like to learn as much about the job and the company so I can make an educated decision for this role."
- Option 2: "The range for graduates with my credentials is between $$$$ and $$$$."
- Option 3: "I've seen similar positions to the one we're discussing that range from $$$$ to $$$$."
Pro Tip: Negotiate in good faith. Be honest if you have multiple offers but do not inflate salaries or past experiences to achieve your target number. Lying about other offers is the start of an ethical slippery slope that is hard to get off once you're on it. And it will likely catch up with you at some point.
Receiving an Offer Letter
An offer letter formalizes the organization's desire to hire you and outlines what you can expect should you say "yes." Understanding the various details included in offer letters will help you decide whether or not to accept or decline a position.
Expect to see the following details:
- Job title.
- Pay rate (salary or hourly).
- Work schedule.
- Start date.
- Information about the organization.
- Deadline to accept or decline the offer.
Now is the time to understand the value you bring to an employer. Ideally, you should know this before going into an interview. But if you haven't done so, conduct research to learn exactly what you should expect to be paid. Your potential salary will most likely be based on your years of experience, education, location, certifications, and any special training.
SHRM members can find salary information in the Compensation Data Center. The tool provides information about salaries for individuals with a similar background, as well as goals to help you estimate what you should be earning.
These resources can also help you research pay ranges for positions you are considering:
- National Association of Colleges and Employers Salary Survey.
- LinkedIn Salary Search Tool.
- Bureau of Labor Statistics salary data by local, regional, and national averages.
Pay transparency laws are increasing across the U.S., making it easier to gather salary information. A few examples include California's Pay Transparency for Pay Equity Act, Colorado's Equal Pay for Equal Work Act, and Maryland's Equal Pay for Equal Work law.
All these laws currently make employers provide a position's pay range, though the details vary. Some laws—such as New York City's pay transparency law—require employers to post the salary range in a job listing. Others mandate a hiring manager share it only if a candidate asks.
It's critical to understand the organization's pay philosophy, as well as the pay ranges of the industry you're looking to work in. HR positions in finance or tech fields, for example, are more likely to offer higher salaries compared to similar positions in retail or nonprofit organizations.
Additionally, it's vital to recognize the economic climate surrounding your job search. Amidst the Great Resignation and Great Reshuffle, organizations offered higher salaries, giving job seekers the upper hand. Record inflation changed the dynamic, giving employers an advantage. Salary negotiation is still possible, but not as generous during tighter economic times.
What if you don't have direct HR experience on your resume?
You may not be earning an HR degree, or a previous position may not have listed HR in the job title, but you can leverage your knowledge and experiences.
In any HR role, an individual is typically using creative problem-solving, and managing and mentoring others. Look at your previous work or volunteer experiences and highlight situations where you may have done one of those three things (problem-solved, managed others, or mentored others). Were you a shift leader at a retail store or restaurant? Each of those roles includes components tied to HR tasks.
Highlight the HR connections your degree offers. For example, individuals with a psychology degree often search for HR positions. A psychology degree teaches emotional intelligence and an understanding of how people think and make decisions, which are critical skills for an HR position.
Review HR job postings and pay attention to the responsibilities, duties and skills sought. Chances are you'll have more than one of the qualifications. Internships, volunteer work and part-time jobs are all ways to gain valuable experience that can be applicable to HR.
Get involved with your campus SHRM Student Chapter and participate in case study competitions; this demonstrates an interest in HR and a certain level of proactivity. Earning a master's degree in HR is also a common option for gaining additional experience.
It is entirely possible to work in the HR field without a related degree. However, you might need to swallow your pride and accept a different role within the organization to gain experience. That could look like starting in an entry-level position in a different department and transitioning into an HR role through hands-on learning, professional development and a positive attitude about growth.
Looking beyond the salary
Salary is the first thing most job candidates think of when negotiating an offer. However, it isn't all about money. When the base salary becomes the focus, it's easy to overlook or underestimate the value of total compensation.
For example, an organization that pays a lower salary may cover a larger portion of health insurance costs, reducing out-of-pocket expenses. Other times, more paid time off may be offered to compensate for a lower salary.
When you aren't offered the salary you desire, consider the value of flexible work environments. You'll save on commuting expenses and spend less time traveling for work. Flexibility is also more than working from home. Today, many companies recognize that an alternative schedule to the traditional 8 a.m. – 5 p.m. or 9 a.m. – 6 p.m. schedule has value.
Closely review the offer letter and benefits package to determine if these other perks align with your values and needs. Based on what is included, these are the benefits often up for discussion:
- Signing bonus.
- Retirement plans.
- Performance incentives.
- Relocation assistance.
- Tuition reimbursement.
- Student loan assistance.
- Travel allowance that may include a car, parking fees, etc.
- Time off.
- Health-related benefits.
- Flexible work hours.
- Family care benefits.
- Professional and career development.
- Wellness benefits.
- Child-care assistance.
Before responding to an offer, know what matters most to you. SHRM's 2022 Employee Benefits Survey reports that the top requested benefits include comprehensive health care, retirement accounts, professional career development and flexibility. More vacation time also is important to some people.
Try this strategy to rate the value you find in each benefit:
- Grab a sheet of paper and write the job title or company name at the top.
- Draw a line down the page to create two columns.
- Label one "pros" and the other "cons."
- Read through the offer letter and place each item on either side of the columns.
With these "pros" and "cons" in mind, write down the key items you would like to negotiate, as well as why you think you deserve a higher salary or an increase in a specific benefit. Don't wing it or use an estimate. Use facts and data based on similar roles—and your experiences—to offer valid reasons for why they should give what you are asking for.
Bundle all your "asks" into one counteroffer and put your best offer into a complete package. Negotiating one item at a time is ineffective and can waste time. A hiring manager selected you from a long list of candidates and has a vested interest in you accepting an offer. Don't prolong the process by forcing them to consider counters on individual items.
Next, practice the negotiation conversation with a professor, friend or family member. Ask them to listen to your pitch. Be aware that someone you are close to may hesitate to push back. Give them permission to question your reasoning and request you to give a rational, logical, well-researched response.
While you'll most likely never get 100% of what you ask for, creating a pros and cons list, however, can clarify what you see as deal breakers or room to compromise. Part of that is driven by what is most important to you and what salary and benefits are available to your peers—those with similar years of experience, education, location, certifications and any additional training.
Once you've taken stock of the benefits, consider the position itself. Ask yourself:
- What are the opportunities for promotion?
- What is the work schedule?
- What is the onboarding process like?
- What is the organization's management style?
- How does the position align with your goals?
Think about what you know about the organizational culture, stability and reputation. Also, account for where the geographic location is and if the salary is enough for the area's cost of living, transportation options, and if you need to relocate. After assessing salary, benefits and the workplace, you'll have the information needed to begin the negotiation process.
Pro Tip: Never send a counteroffer via e-mail. Negotiation is an interactive process. Request a video conference or a phone call to discuss.
Tips for Improving Your Negotiation Skills
You have a counteroffer ready, and a scheduled time to discuss it with the hiring manager. Now it's time to prepare for the conversation.
How you deliver your "ask" is as important as knowing what you want out of the final offer.
- Frame your request by what you have learned about their needs and priorities. Focusing on the "other" is more likely to lead to a win/win outcome.
- Control your emotions. Keep cool when the other party offers a response that may trigger an emotional reaction. Getting defensive, angry or upset clouds your judgment. Instead, get curious and ask questions that explore the other party's position and why that is.
- Show integrity. The other party must know that you will be true to your word.
- When negotiations stall, reframe the conversation. Look for opportunities to show where your values align and how a working relationship supports those outcomes.
- Practice your delivery, which should include using correct posture. Hunched shoulders and crossed arms or legs tend to be viewed as unapproachable. When standing, let your arms hang relaxed at your sides. When sitting, place your hands on the table. Research shows this builds trust.
- Recognize the influence of tone of voice, body language and nonverbal communication when interacting with others.
- Make eye contact with each person in the conversation. When there is more than one person in the discussion, hold eye contact for three to four seconds and then do the same with the next individual(s).
- Adjust your message to match the other person's language and priorities in a professional and authentic way.
- Encourage the hiring manager and others in the meeting to participate in the conversation. Ask open-ended questions, say their name and watch their nonverbal signals.
- Get everything in writing, and ensure both you and the employer sign the document.
Patience pays off. Be confident in what you're asking for but don't push the other party to feel like they must make a snap decision. A hiring manager may have to ask their boss to approve a higher salary or additional benefits. You've gotten this far, which means they like you and want to bring you on board. Trust the process; they'll become your advocate and likely will be able to get you more than the original offer.
Pro Tip: If you plan to accept an offer, don't wait. It's okay to take time to review and counteroffer, but don't string an employer along.
Learn from a lead FBI hostage negotiator
While the perceived pressure around negotiating a job offer is obviously nowhere close to the pressure cooker of a hostage negotiation situation, strategies drawn from high-stakes crisis negotiations can apply to the business world.
Author Chris Voss was the lead international kidnapping negotiator for the Federal Bureau of Investigation (FBI). He became the FBI's hostage negotiation representative for the National Security Council's Hostage Working Group, and now runs Black Swan Ltd, a negotiations consulting group, and teaches others how to leverage the negotiating tactics.
In his book, Never Split the Difference (Harper Collins, 2018), he details many strategies he effectively used throughout his career. Here are four you can start with today.
1. Bring a likable, positive approach
Smile and be positive regardless of how tough the conversation gets. It's no secret that you're more likely to interact with a likable person. He writes, "people are six times more likely to do business with someone they like."
2. Listen with an open mind
People want to be understood and accepted. It takes empathy to deliver on that need, and it starts with deep listening to understand the other side without making a judgment. However, this doesn't mean agreeing with everything they say—you don't have to agree; you must only show that you understand their position.
3. Understand the value of "no"
People are programmed to believe that "no" is a negative response. Hearing "no" can send most people into a panic. It feels like an immediate rejection, and you might begin to question your worth, value and skills. However, Voss argues that "no" creates more opportunities for "yes."
Instead of pushing people to say "yes," give them space to say "no;" often, that will open the door to further discussion and lead to a better outcome than an early agreement.
4. Let the hiring manager speak first
At the negotiation table, everyone is so focused on sharing their perspective that listening takes the backseat. Letting others speak first gives you an advantage. When it's your turn to speak they won't be distracted by what they want to say and will be listening to hear your thoughts. Also, allowing the hiring manager to start the conversation gives you additional information to frame your response.
What Happens When You Don't Get What You Want?
It is okay to show your disappointment in a professional, courteous way. Know what you consider to be a make-or-break-it deal in advance so that you can respond calmly. Also, have a Best Alternative to a Negotiated Agreement (BATNA) in mind.
Investopedia defines BATNA as "a course of action that a party engaged in negotiations has determined should be taken if talks fail and no agreement can be reached."
When you know your BATNA ahead of time, you can walk away from a bad deal. Harvard Researchers suggest:
- Write down your alternatives to this particular job offer.
- Evaluate other offers or the value of continuing the job search if you decline this offer.
- Choose the option that most closely aligns with your goals and needs.
- Calculate the lowest offer you're willing to receive.
The decision to accept or decline an offer should be made within the context of the current job market. The pandemic gave employees a significant advantage in bargaining for higher salaries, signing bonuses, flexible work and other benefits. However, during a recession or amid hiring freezes, employers will have tighter parameters in which to operate; knowing there are fewer jobs available, they will be less open to bargaining.
Do your research, know the typical salary ranges for the positions and be honest with yourself about your education, experience and skill set.
If the salary is lower than expected, then discuss your research and the salary range you desire with the prospective employer. Go beyond what your resume and interview has revealed. Offer concrete examples of how you will add value to their organization.
Don't keep going back and forth with a hiring manager or HR representative who is strict about salary and benefits. Respect where they are coming from. Instead, think about why you want or need this job.
Make sure you consider all factors besides the salary, such as the benefits, the working environment, the commute, the company culture and the possibility of promotion. These other factors may offset a larger paycheck.
Pro Tip: When it's clear an offer isn't going to work, and you've identified your alternative, don't wait to tell the hiring manager. They need to fill the position and appreciate getting back to the hiring process as quickly as possible.
Prepare to Accept or Decline
Once you're confident in your decision, it's time to let the interviewer know if you'll be joining the organization or passing on the opportunity.
Turning down an offer, especially a good offer from an organization that has treated you well, can be difficult. Most importantly—don't ghost an organization as an easy way to avoid a hard conversation, and don't make them wait. Send a letter as soon as you've decided it's not a good fit.
When writing a note to decline an offer:
- Express your gratitude for the offer.
- Make it concise and professional.
- Avoid negative comments about the role or the organization.
- Include a reason for declining, such as having found a position that more closely aligns with your career goals or does (or does not) require relocation, travel, etc.
Writing an acceptance letter will be much easier. This confirms your intentions to join the team and highlights and reiterates specific details of the agreement.
When writing an acceptance letter:
- Highlight your excitement about the position and the organization.
- Include agreed upon salary and benefits.
- Acknowledge your start date.
- Say thank you and offer to answer any questions or complete necessary paperwork before your first day.
You can use these sample letters to help draft a letter notifying them that you have accepted or declined.
Example decline letter #1
Dear Mr. Smith:
Thank you for offering me the HR Generalist position at XXX company.
I appreciate your time and consideration throughout the interview process. There are both exciting and challenging aspects to the position. However, I have accepted another offer for a position that more closely aligns with my career goals and interests.
I enjoyed learning more about your organization and appreciate the time you took to learn about my skills and goals.
Sincerely (or Warm Regards),
Example decline letter #2
Dear Ms. Jones:
Thank you for offering me the HR Generalist position at XYZ company. I sincerely appreciate your interest in hiring me. After much consideration, I accepted another position that more closely aligns with my career goals.
I appreciate you considering me for this generous opportunity. I thoroughly enjoyed meeting with you and learning about your company. I hope our paths cross again in the future.
Sincerely (or Warm Regards),
Example acceptance letter #1
Dear Ms. Smith:
I am excited to share that I accept your offer of the HR Generalist position at XYZ company with a starting annual salary of $XX,XXX with health insurance beginning (upon hire, within 90 days, etc.). [Include any additional benefits negotiated above the original offer.]
I appreciate you answering my questions about the benefits outlined in the offer letter.
I am thrilled to be joining XYZ Company on DATE and look forward to being a part of the HR team.
Sincerely (or Warm Regards),
Example acceptance letter #2
Dear Mr. Smith:
I was thrilled to receive your offer letter for the HR Generalist position at XYZ company. I am pleased to accept the position, and I am excited to contribute to the HR department and the entire organization.
Based on our discussions, my starting salary is $XX,XXX, with health insurance beginning (upon hire, within 90 days, etc.) [Include any additional benefits negotiated above the original offer.]
Thank you for the opportunity. I am excited to start on DATE. Please let me know if you need any additional information before then.
Thank you again and I'm excited to work with you.
Sincerely (or Warm Regards),
The fear of negotiation is like having a fear of public speaking. The best method for overcoming both is practice and learning. If you're still in college, enroll in a negotiation class. Not only will this help you negotiate job offers, it will improve your negotiations in daily life and within your career—a quality investment in yourself and your future.
Read, listen to podcasts, and most importantly, practice negotiating. These are a few resources you may find helpful in honing your negotiating skills.
Suggested SHRM Online resources:
- Ask HR: Tips for Negotiating a Salary
- How to Negotiate a Job Offer in Today's Market
- Know Your Worth: Determine Your Value to Employers as a Recent Graduate
- Negotiating a Salary Offer: Deal or No Deal
- Never Split the Difference: Negotiating As If Your Life Depended On It, by Chris Voss and Tahl Raz
- Ask for More: 10 Questions to Negotiate Anything, by Alexandra Carter
- Getting to Yes: Negotiating Agreement Without Giving In, by Roger Fisher, William L. Ury, and Bruce Patton
- HBR's 10 Must Reads on Negotiation: HBR's 10 Must Reads Series, by Harvard Business Review
- Negotiations Ninja podcast
- Negotiate Anything podcast
- Greg Williams The Master Negotiator and Body Language Expert podcast