Congratulations! You have a job offer. After completing the entire process, including résumé and cover letter production, interviewing, writing samples and much more, you can finally relax, right? Wrong! The process isn't finished until you sign your name agreeing to an employment offer. This part of the process can not be taken lightly because you will possibly have to compare offers, negotiate and overall find the best compensation package for you. The information included in the following pages will give you criteria by which to evaluate a job offer, the tools necessary to negotiate a job offer and how to properly inform the hiring company of your decision.
Finding Your "Fit"
There are a plethora of individual factors that lead to deciding if a job offer is the right one for you. Although each person will have different criteria, some of the most commonly used criteria are listed below. By using the Job Offer Evaluation Worksheet, you will be able to determine which of two job offers suits you best. To further discuss these ideas, please contact the Center for Student Professional Development to meet with a Career Counselor.
Work/ Lifestyle Values
Before accepting a job offer, review what is important and fulfilling to you about work. What values do you hold that you want to carry over to the work arena? Also consider how you like to work and what you would like in a work environment? Do you want to work for a company that provides a flexible work schedule? Is it important for you to know most of your colleagues? What is your location preference for work? What is the corporate culture? How does the company support work/life balance? Talk to current employees; they will give you the "scoop." You will be in the same environment for five days a week, eight or more hours a day; it is important that you are comfortable both physically and mentally.
Before accepting a job offer, research the financial stability, growth, and trends of the industry and organization. Has the company gone through significant layoffs lately? How does the company's financial stability look now? What is their policy if more layoffs are needed? If the company is a start-up, are they confident in their financial backing past the initial phase? If there are any concerns, address them with the organization contact, before accepting the offer.
When you receive a job offer, it is good to review the responsibilities and daily activities of the position. You may have learned more about the position while going through the interview process and it is important to evaluate this information. Some questions to consider: What are your daily activities? Where will you spend most of your time? What are your responsibilities? Is there growth for your position? Who is your supervisor and what type of supervision will be provided? What professional development is provided? Clarify any concerns or questions you have with your potential supervisor and compare the offer to any others you may have.
Your Next Step
After evaluating all aspects of the industry and position to determine your "fit" with the job, your next step is to evaluate your entire job offer to determine if you need or want to negotiate. The following information will outline the salary negotiation process and describe other aspects of the job package that you may want to negotiate or consider when negotiating your salary. Usually negotiations are done with the Human Resources representative you have been working with, but occasionally they are done directly with your manager. If you are unsure, you can ask. State that you have some questions or concerns about the offer and would like to know with whom it would be most appropriate to discuss them.
Students often feel some concern when considering their first job offer. Sometimes this anxiety stems from a fear that an organization may be "low-balling" their salary. Or, they fear they might alienate the employer by appearing too demanding if they ask for more money. We hope the following information will be helpful to you when considering your job offer.
The Organization's Perspective
Salary doesn't necessarily correlate with the value you add or the contribution you make to society. It's simply the amount the market will bear to purchase your services, which include your skills, expertise, knowledge, and special talents.
Most organizations, both large and small, establish salary ranges for every position based on standards and general practices for the field. It's in the organization's best interest to hire you for fair market value for several reasons. First, the hiring process can be long and expensive. It would be inefficient for an organization to make low offers only to be rejected and have to begin the recruiting process all over again. Second, organizations want to hire and retain good employees. It's unproductive to pay you less than other employers.
Organizations determine where an employee falls in the salary range based on experience and special expertise or knowledge. Therefore, a recent college graduate hired for an entry-level position with limited experience will be paid somewhere between the low- to mid-range, reserving the midpoint salaries for more experienced individuals.
The What, Why, and When of Salary Negotiation
What Is It?
Salary negotiation is the process of reaching an agreement on what an organization will pay for your skills, knowledge and experience. Contrary to popular belief, this is not an adversarial process. It is in both the organization's and your best interest to come to a mutually beneficial agreement.
Why or Why Not Negotiate?
The only reason to negotiate is to get fair market value for your skills, experience and knowledge. Therefore, it is unwise to negotiate for negotiation's sake. For example, sometimes job seekers think a hiring manager expects them to negotiate, or that salaries should be negotiated as a general principle. Although organizations respect employees who can articulate the value they add, recent grads (or anyone else) can quickly alienate potential employers if they are inappropriate and overzealous in their approach to negotiating their salary to "get a fair deal."
When Should You Negotiate?
Two things need to happen before you negotiate. First, begin discussing salary only after you have a received a formal offer, preferably in writing (refer to the Frequently Asked Questions section below for what to say if asked the "money" question before a formal offer.) Initiating a discussion regarding salary before this point could eliminate you prematurely from hiring consideration. Second, negotiate only after you have evaluated the entire job offer package and researched what the market will pay for your services in this field. This research will provide you with the evidence you need to determine if the salary offered is reasonable or whether you should make a case for a higher salary. The fact that your friend has received a higher salary for a similar job at a different company is insufficient data for negotiation purposes. Additionally, some companies that can't offer a higher salary may try to offset this by offering other "perks" such as extra vacation days. Although you may still choose to negotiate your salary, be familiar with your entire job offer before approaching an organization.
The Salary Negotiation Process
When you receive a job offer you can either: accept it, reject it or negotiate for something else. If you decide to negotiate for something else, you need to know three things before you begin: 1) your market value;
2) what you want; and 3) the job.
1) Know Your Market Value
Your success in negotiating a higher compensation package (and the only reason you should be negotiating) is contingent on data you have which suggests your market value is higher than that reflected in the offer. Often new college grads don't have the experience or expertise to warrant a higher salary. However, there are exceptions. Here are some salary negotiation "positions of strength" for new college grads:
- You have gained relevant work experience through internships or summer jobs which positively impacts your ability to do the job.
- You have a particular technical expertise which is in high demand.
- You have an advanced degree in a specific and sought-after area of expertise.
- You have a written offer from another company that states a higher salary.
2) Know What You Want
In addition to knowing your market value, you also need to know what you want and where you are willing to compromise. Salary is only one part of a total compensation package. A package might include any of the following:
- base salary
- stock or stock options
- 401(K) or other retirement type plans
- medical, dental, and vision benefits
- life insurance, accidental death insurance and disability benefits
- signing bonus
- bonuses based on performance and/or profit sharing
- vacation time and/or sabbaticals
- education reimbursement
- relocation costs
- extras such as commuting allowance or company car, health club membership, technical equipment, pretax dollars for child or elder care
For some organizations the above items are not negotiable and the salary may be in a fixed classification scale. However, other organizations may be willing to negotiate on salary, bonuses, stock options, date of salary review, relocation costs or extras.
During the process of evaluating job offers, some of these elements may not seem as important as annual income, but they can make a big difference to you in the long run. For example, compare one offer of $35K, plus medical benefits (only) from an organization located in San Francisco, and another offer in Ann Arbor, Michigan for $28K, plus full medical benefits (including dental and vision) and a salary review within six months. In order to evaluate these offers you need to consider all their elements, including cost of living expenses for the two areas and anticipated out-of-pocket costs for things not covered. You need to do a cost/benefit analysis to determine which is the best opportunity for you. Also, ask your hiring contact any questions you have about the benefits package before you make a decision.
What to Say and Do During a Negotiation
3) Know the Job
Before you start negotiating, you want to be clear on how your skills benefit the organization. This can be difficult to assess if you don't have a great deal of work experience. However, here is a technique which might help. Try to identify the needs of each person who interviews you and how you are a solution to their problems/challenges. Then, when you're negotiating, you have specific data about how you will add value. You will be able to confidently state that you are worth $5K more because of your ability to create specific software, design the new manual, or write the necessary grant proposal.
Step 1: Receive the Offer
Thank the person who extended the offer and express enthusiasm for the position. Then reiterate how important this decision is for you and ask for some time to think it over in order to make a good decision. If it is a verbal offer only, ask when you can expect to receive the offer in writing.
Step 2: Evaluate the Offer
If you have any questions about benefits, etc., ask your contact person to whom you should direct your questions for clarification. Evaluate the compensation package based on the elements listed in the Know What You Want section. Identify several backup options should your first request be denied.
Step 3: Negotiate
After evaluating and researching the offer, you are ready to negotiate. The important aspects during this phase are to: ask questions about how the salary was determined, be realistic about what you want, state your evidence clearly and succinctly for why you feel your salary should be higher, then listen.
Here is a sample script for the negotiation process:
Student: "I want to say again how extremely pleased I am to have the opportunity to work with you and this organization. However, I would like to discuss the compensation, as it is less than I had expected."
Company: "What did you have in mind?"
Student: "First, I'd like to know how your organization structures salary ranges to understand how this salary was determined. I want this to work for both of us."
Listen to the response.
Student: "I understand the organization prefers to bring recent college graduates in at the lower end of the range for this position because they typically lack the experience which warrants a higher salary. However, I feel my three years of summer internship experience within this industry plus my leading edge technical skills warrant a higher salary." (If you have other hard salary data from your research, diplomatically mention it here.)
If the compensation is not negotiable, you have a decision to make based on the current offer, or you may suggest the next option from your backup plan (such as a higher signing bonus, if applicable, or early performance review,) then move on to any other part of the job offer that you would like to negotiate.
Other Elements to Negotiate
While salary is the most negotiated aspect of the job offer, there are other elements to evaluate and possibly negotiate. It may be that you have vacation plans that can not be changed. Negotiating your start date or extra time off to take this vacation could be very important. If your commute is going to be long, negotiating for telecommuting (working from home) for one or more days a week could save you commuting expenses and relieve stress associated with long commutes. Be creative in your negotiation process. Salary is important, but there are other elements of the job offer that can be negotiated as well.
Accepting and Rejecting Offers
If you and the company have come to a mutually satisfying agreement, ask for something in writing that reflects your mutual understanding. This usually will be in the form of an amended offer letter. When returning the amended offer letter, it is good to include a short job acceptance letter.
If you can not reach a mutually satisfying agreement, or do, but have other offers you need to reject or withdraw from, a formal written letter or e-mail should be sent to the hiring contact. This may also be done after a personal call to the contact at the company, depending on how you have been communicating with them throughout the hiring process.
Utilizing CSPD Recruiting
Students and employers have a joint responsibility when accepting or extending a job offer. We encourage recruiters to abide by the ethical standards noted in the National Association of Colleges and Employers guidelines, which state that employers "will refrain from any practice that improperly influences and affects job acceptances...including undue time pressure for acceptance of employment offers."
You should not accept an offer if you want to continue interviewing with other organizations. If you DO accept an offer, you have made a commitment to that employer and it is your ethical responsibility to discontinue interviewing with other employers.
Frequently Asked Questions
Q: What do I say if asked for my salary requirements before the organization makes a formal offer?
A: The rule of thumb is that you want the company to mention a salary amount first. You want to avoid discussing your specific requirements until a formal offer has been made. If you are asked about salary, reply with, "If it's okay with you, I'd like to set that question aside for now and focus on the content of the work. I'm interested in knowing more about the specific duties and responsibilities of the job." If the hiring manager insists, you might say something like, "I assume a range has been established for this position and wonder what the organization had in mind?" or "A salary competitive for this position and industry."
Q: What do I do if all my requests are rejected in the negotiation process?
A: Your decision to accept or reject the offer must then be based on the original offer.
Q: How committed am I to a job offer I have accepted, if a better offer comes along?
A: First, if you are unsure about accepting a job offer, it is better to negotiate for more time to make your decision, than to accept the offer prematurely and later rescind your acceptance. Second, it is important to honor your commitment once you've made it; backing out of the agreement is highly unprofessional and might later reflect negatively on you in your chosen field. Another consideration should be the job offer contract. If you were given a signing bonus, examine the contract for clauses that state you must pay back the full signing bonus if you leave the organization before the stated duration. The signing bonus amount that you receive will be the total amount, minus taxes, but the amount you must repay will be the full amount of the bonus.
Q: How do I request an offer in writing?
A: If a verbal offer is made, a response could be, "I'm very excited about the opportunity to work for you and this organization. Since this is such a significant decision for both of us, I'd be more comfortable if the offer was formalized in writing and I could look it over."
Sample Job Offer Rejection Letters
Dear Mr. Smith,
Thank you for your employment offer to be an Assistant Director with XYZ, Inc. Unfortunately, I am writing to inform you that I am unable to accept the offer. After evaluating all opportunities available to me for the best fit at this point in my career, I have decided to accept another position in a different field.
I truly enjoyed meeting and speaking with you and other representatives from Score and learning firsthand about your experiences. Best wishes for the continued success of XYZ, Inc.
Thank you again for your consideration.
I hope this email finds you well. I am writing to inform you that I will unfortunately not be accepting the generous offer of Management Trainee, from ABC. I really appreciate the care and friendliness extended to me during this time. Foremost, I am grateful that ABC granted me an extension so that I could fully consider my options. At this time, I feel that ABC is not the best fit for me. It was an extremely tough decision for me to make, as evident in my request for a month long extension. I again want to thank you and everyone else at ABC for this great opportunity and for your help and support through this time period.
Sample Withdrawal from Consideration Letter
Dear Mr. Cline,
I enjoyed meeting with you and your colleagues last week regarding the position of Assistant Researcher. Thank you for you time and consideration during this process.
While I am not sure where you are in the hiring process, I wanted to let you know that I would like to withdraw my application from consideration for this position. I have accepted a similar position at another organization.
Thank you again for your consideration and best of luck in your search.
Sample Job Acceptance Letters
Dear Mr. Smith,
It is with great excitement that I accept the offer for the position of Legal Assistant. I have included the signed offer letter.
I have been communicating with the relocation company and am currently in the process of moving to Seattle. I expect to be settled in by the end of the month and ready to start in early August.
I will contact you as my start date approaches. Please feel free to contact me if you have any questions. I look forward to my new position at LMN.
Thank you for your employment offer for the position of Program Coordinator. I would like to reconfirm my acceptance of this position. I look forward to joining the ZZZ and am confident in the contributions I will make to your organization. I am excited to apply my passion and skills to this position.
Per our phone conversation, I will start work on Monday, August 22nd. I will be out of town until mid-July but can be reached by cell phone, (555) 465-1834. Thank you again for this opportunity.