Ask HR: How to Negotiate Your Starting Compensation

SHRM President and Chief Executive Officer Johnny C. Taylor, Jr., SHRM-SCP, answers HR questions each week.

Do you have an HR- or work-related question you’d like him to answer? Submit it here.

I’ve been successful in job hunting, but I’ve always struggled to negotiate salary. I always feel ill-equipped to justify higher starting pay. How can I best negotiate a starting salary? —Carleton

First of all, most people would agree with you: Salary negotiation can be daunting. But with the right approach, you can increase your chances of securing the best possible compensation package. Here are some key things to keep in mind:

• Know the market. Use online tools and resources to research salary ranges for similar positions, particularly in your geographic area. Gather information about industry trends, as well as the company’s financial health and compensation practices.
• Understand your value. Identify the unique skills, qualifications, and accomplishments that will make you an asset to the company. Highlight specific examples of your contributions and their positive impact for previous employers.
• Consider the total compensation package. Evaluate the company’s benefits offerings, including health insurance, paid time off, flexible work arrangements, retirement plans, and other perks. Also, look into the potential for career advancement, professional development, and bonuses.
• Prepare your negotiation points. Develop a strong case for your desired salary, emphasizing your skills and experience, as well as the value you’ll bring to the company. Be prepared to negotiate other aspects of the compensation package, including any signing bonus, incentives, and additional benefits.
• Build confidence. Practice your negotiation points with a friend or mentor. Approach the negotiation confidently and assertively while always remaining humble, respectful, and collaborative.

Also—and I can’t stress this enough—it’s critical to approach your compensation discussion with humility. Too often, candidates go into the process with hubris, and while they may be negotiating with what they consider to be facts, they end up putting off the manager. An overinflated sense of value can embolden a new hire to talk themself out of a good job offer. I’ve seen it happen more than once.

It’s also important to keep in mind that the job market is slowing right now to the point where we’re looking at more of a buyer’s market than a seller’s market. So, when negotiating compensation, be cautious, know your value—in context—and have a firm understanding of the relative health of the labor market.

And finally, don’t base the value of the position solely on the compensation package. Take into account what opportunities it presents. How will it impact your career trajectory? What kind of professional development opportunities does the organization offer? Are you willing to trade a measure of compensation for an experience that benefits you down the road? A new job can often be a bridge to an even better opportunity in the future. 

If an employee’s spouse already has health insurance coverage, can the employer request the employee be on the spouse’s insurance rather than the employer’s coverage? —Sage

The short answer is: It depends. While some employers may encourage employees to use their spouse’s health insurance coverage, they cannot legally require it. The Affordable Care Act mandates that employers with 50 or more employees offer affordable health insurance to their employees and any dependents thereof.

Here are some common ways in which employers encourage their employees to use their spouse’s coverage:

• Spousal surcharges: Some employers impose a fee on any employee who enrolls in the company’s health plan when their spouse is eligible for coverage through their own employer.
• Secondary coverage: Other employers allow the spouses of their employees to enroll in the company’s plan only as secondary coverage, meaning that such a spouse must also be enrolled in their own employer’s plan.
• Educational campaigns: Employers may provide information and resources to help employees understand their health insurance options and make informed decisions.

It’s also important to note how state laws can vary. Some states have regulations limiting the amount of a spousal surcharge or prohibiting certain practices related to health insurance coverage, such as gender discrimination in premiums.

I’ll add this: Before implementing any cost-saving measures, employers should consult with legal counsel and their state insurance commissioner to ensure compliance with local laws and regulations.

Ultimately, it’s the employee’s decision whether to enroll in their employer’s health plan or their spouse’s plan. In today’s competitive talent environment, employers should absolutely strive to offer affordable and comprehensive health insurance options to meet the needs of their workforce.