Thursday, July 11, 2013

How important is negotiation after receiving a job offer?

An astute reader has a question that I've reformulated as follows:
If you have an initial offer from a medium-sized company that includes an above-average salary (in the 50th to 75th percentile, according to the ACS Salary Comparator), how important is it that you negotiate with them for more? The self-help guides all say it's important -- is that right? 
Will it damage my reputation if I don't? And if I should negotiate, what should I use as my basis for a higher salary or more benefits when I don't have any data to back it up?
First, congratulations -- that's very exciting!

I think the self-help guides are correct, in that they would argue that your leverage will rarely be this high again -- so now is the time to make sure that you get everything you have. It seems to me that there are a number of other things to negotiate for: vacations, 401k/pensions, who will pay for health benefits, etc., etc.

As for damaging your reputation if you don't, it probably depends on who you are negotiating with. If it's a smallish company and you're negotiating with someone you'll be reporting to, it may be good to demonstrate that you're willing to use your leverage. (Certainly, if you take a low-ball offer, they may lose respect for you.) If it's a HR person, they may not care one whit either way.

As for what to use for data as backup, I frankly have no idea. Uh, Google? I dunno. Readers?

UPDATE: To calibrate, this sounds like an entry-level Ph.D. position. 


  1. I've been in this position a few times. Other than ACS survey data, I find it useful to compare my performance against my peers. A brief SciFinder / PubMed search for a scientist in your employment bracket will give you an indication of their track record relative to yours.

  2. First of all, let me add my congratulations as well!

    Its my experience that data rarely matters in these negotiations. Going to the person with whom you're negotiating and presenting that data tends to only make them shrug and say, "So what?"

    That said, you should always negotiate. The best way I've found is to say something along the lines of "I'll need at least a week to consider your offer, and I can't start until *insert date* but if you add (x amount more salary, vacation days, or benefits), I'll give you an immediate answer and can come in on *earlier date*." You'll find out pretty quick how bad they need you.

  3. A bit of a hijack, but I have a related question. I'm in a small-medium company that is transitioning from VC funding to a self-sustaining business. I was hired 1.5 years ago and at that time no salary negotiation would be brooked. I have decent benefits and a relatively low salary, at about 25th percentile according to the ACS Salary Comparator. Cost of living is high in my city.

    When my yearly review comes up, is there any chance to negotiate a salary higher than the typical inflation-level yearly raise, or do I need to look for a new job?

    1. Make slightly indiscreet moves to get a job interview elsewhere (update your CV and LinkedIn profile during the day in your office), get job posting alerts come to your work e-mails. Then send out your applications together with job references so that someone calls your employer and asks about you. You do not have to declare that you are about to leave but make sure to ask for a rise.

    2. I'm in the same boat - was hired in 2010, and paid according to current market conditions at the time. Every year when I get my performance review, I print out some data on average chemist salaries to support my argument that I'm being underpaid. I also take calls from headhunters at my desk and intentionally let everyone overhear. I'm happy at my job and don't want to leave, but I'm concerned that being hired during a downturn with a low initial salary could follow me for a long time if I stay with this company and receive the usual inflation-level raise every year.

      I knew a guy at a former employer who was involved in PhD recruiting, and found out that newly hired PhD's (circa 2007) were being paid more than he was as a PhD with 5 years experience. When he complained, management's response was that they needed to pay that much to be competitive, and they refused to raise his salary to the new-hire level. He felt insulted, got in touch with a headhunter, and soon moved on to another company.

    3. The unfortunate reality is the best way to get a big increase in salary is to move jobs.

  4. I would say only negotiate if there is really somethings that feel is worthy of it as would suggest can portray a negative and uncooperative imagine if coming across as doing it to demonstrate you have leverage, which could have longer term consequences. Certainty should have expectations going in and if not met then would open conversations to address concerns or misalignment as sometime find trade-offs in what particular offers include. Agrre frequently data does not matter, and is already known anyway but not sure I would apply too much weight to general ACS surveys as typically show cumulative combination of broad job and company types so need to find circumstance more focused and specific job and related companies. Such data normally comes from friends and others in your network and especially if you know or work with a Recruiter

  5. I have found moderately useful for salary comparisons, and I disagree that data does not matter in such negotiations. It depends with whom you are negotiating; if they have any kind of science background they will likely be receptive to empirical evidence. As for damaging your reputation, this should not even be a question (assuming you are not an asshole or completely unreasonable about it -- and having data shields you from appearing unreasonable). You won't necessarily get what, or all that, you ask for, but it should not put you in a bad light to have asked.

  6. The Aqueous LayerJuly 11, 2013 at 12:31 PM

    Most companies have very specific vacation and 401K policies. I'm not sure there's much to negotiate there, unless you are an executive who, oftentimes, have different retirement plans than the average worker. Imagine the chaos if your co-workers found out that you have a week more vacation than they do.

    There's a fine line between negotiating and pushing. If you are a highly qualified candidate in a field without a ton of competition, you've got leverage. If you are say an organic chemist getting an offer in a pharma/biotech environment, very little. The risk of over-asking is that they'll rescind the offer and move on to candidate #2.

    If you have an above-average salary offer, the hiring company knows this. Perhaps negotiating a signing bonus, or a larger one, would be more productive. If they are offering incentive stock options/grants, there's another avenue to pursue as well.

  7. CoulombicExplosionJuly 11, 2013 at 12:37 PM

    I think the general consensus among my peers (accepting positions straight from grad school from ~2010-present) was that you will be more successful trying to negotiate for a one-time monetary benefit (relocation assistance/signing bonus) than a higher annual salary. I've also heard from HR reps that a PhD hire straight from grad school can typically negotiate extra vacation time than a BS level entry position.

    I'm also uncertain about the data to use for this negotiation. I think the urgency of the position and the talent/fit-gap between you and the runner-up are probably more influential than any data you could present. Unfortunately, I don't think there's a good way of getting at that information either.

  8. CoulombicExplosionJuly 11, 2013 at 1:07 PM

    Re: vacation time, my offer (and the offer of other PhDs that hired in the same year) was a one-size-fits-all and thus offered vacation was the same as a BS entrant. My point is, even if a PhD entrant can commonly garner more vacation, it isn't necessarily going to be offered up front. In my case, I asked for and received extra time, but at least one of my PhD peers didn't ask (and obviously didn't receive). Hence, it's important to negotiate!

    1. I have to second this approach. Vacation costs almost nothing to employer and is a great benefit to the employee. Often, entry level PhDs can negotiate for "equivalent service time as BS". So if you spent 5 years in grad school and the company policy is 2 weeks for 0-4 years and 3 weeks for 5-40 years service, it's not unreasonable to ask for 3 weeks.

      *Just make sure to get it in writing in the offer, and placed in your employee file as soon as you begin*

      At my current job, they offered me a competitive salary, so I didn't push hard on that, but I did request more (but not as much as I probably could have) vacation. The HR person that hired me said, "oh, vacation in that department is loosely tracked, so the hiring manager said no problem". I requested it be put in writing. In the end, it was no problem to put it in writing and in my file, but remember that the paperwork is for people who are not in the room at the time the deal is made. Those people include: future bosses, HR staff looking at severance packages, and companies that merge/acquire your current company.

  9. "Vacation costs almost nothing to employer"

    I hope most employees create at least some value when they're at work....

    1. I could argue that some people I work with have more value when they're gone...

      But, more seriously, for those that are wondering why I say that, is that vacation is more or less wrapped up in the salary. When you budget headcount, vacation is not really part of the number. For salaried people, there is the salary, and then there is overhead that is typically calculated as a percentage of the salary. Vacation gets wrapped into the salary number and the two are rarely deconvoluted.

    2. "I could argue that some people I work with have more value when they're gone"

      Sounds like some of my coworkers. This is where the concept of 'negative work' comes into play.

  10. I'm with Bob. Glassdoors is the best thing going for looking up salaries. Many larger-ish companies will have salaries, but possibily not for the role that you're going into. Its a great place to start. There are also reviews on the companies written by present and former employees.

  11. Hi,

    My name is David Larson and I'm a professional salary negotiator. My colleagues and I at have negotiated thousands of salaries and we always do it the same way…over email.

    Why over email? Because that way, our client’s employer never knows they’re dealing with a professional negotiator. We write the salary negotiation emails for our clients, and our
    clients send them out from their own accounts. Our clients get all the credit for being savvy negotiators, and the playing field is properly leveled.
    Think about it…most HR Reps have already negotiated dozens of salaries. In a face-to-face negotiation they would tear our clients apart. But over email, they lose most of their home field advantage. They can’t look our client in the eye and tell if he’s bluffing. They can’t scare our client into submission.

    It's just so much easier to get more money when you have a professional negotiator on your side. Our email technique works so well that we don’t even charge our clients unless they get at least $1000 in extra salary.

    Good luck!