Should you negotiate salary and perks when you get a job offer? At what point in the hiring process should employers and job seekers get a sense of compensation expectations versus reality? And what types of compensation (money versus benefits) are easiest to negotiate? The rules have changed, so take a fresh look at what our recruiters and professionals in the field recommend.
Ask For What You Want From The Start
If you feel that the starting pay for the job is too low, negotiate salary during the initial job offer stage. Don’t wait to catch up later (because you likely won’t). Need compelling proof? A now-classic NPR article from 2011—conducted at the dawning of modern gender gap debate—asserts that failing to negotiate salary early on could cost you between $1 million and $1.5 million in lost earnings over time.
“With it being more of an employee market right now, candidates are in a better position than ever to negotiate salary,” says Claire Reese, The HT Group’s Vice President of Sales.
Employers have seen the writing on the wall, they’re feeling the sting of the labor shortage, and many have geared up for wage increases. According to a new report from the Conference Board, employers are setting aside an average of 3.9% of total payroll for wage increases in 2022, the largest increase since 2008. But what about new hires?
“Right now, we are seeing salaries and hourly pay around 15 to 25% higher than it was six months ago,” Reese says.
Something else that’s changed is the timing of the compensation discussions. These days, reality and expectations can be so far off that it may be wise for both parties to be clear on the compensation range early on. For entry-level and hourly pay roles, Reese suggests that candidates come to the table with what their hourly pay expectations are upfront. “Employers want to know if your expectations are aligned with theirs. Surprising them with a pay negotiation after offer acceptance is a headache for both parties,” she explains.
Professional and executive-level candidates are in a better position to negotiate salary expectations and ask for more upfront, “but being transparent about what you are looking for is key,” she says. In both cases, working with a recruiter can help you not only negotiate better but also set expectations upfront so that everyone’s on the same page by the time the job offer hits the table. The recruiter is often the only one who can have truly candid conversations about compensation with both the employer and the job seeker ahead of the job offer.
The HT Group Tech Recruiters add that while money is easiest to negotiate, base salary for some positions usually can not deviate much. “In those cases, sign-on bonuses or stock/equity can help solve the negotiations,” they said.
Understand How Perks Work
It’s vital to understand that benefits and perks can be even trickier to negotiate than salary. The recent XpertHR Recruiting and Hiring Survey shows that nearly 90% of employers will negotiate salary for certain positions, but just 32% are willing to negotiate benefits.
“Salary has traditionally been viewed as more flexible because it is commonly accepted that pay is influenced by a variety of factors, including the organization’s compensation philosophy, as well as a candidate’s experience level and expectations,” Marta Turba, vice president of content at WorldatWork, says, adding that traditional benefits programs like health care and retirement are highly regulated and based on universal, nondiscriminatory standards that would prevent flexibility in negotiation.
The HT Group Tech Recruiters told us a similar story. “Sometimes candidates will want to negotiate benefits such as how soon they can enroll in the health plan. That is never negotiable unless the start date moves up to change the grace period, which is complicated,” they told us.
Dice.com found that many employers understand that workers’ needs are changing and are trying to expand benefits to match. This includes fully covering healthcare premiums and adding telehealth, mental health support, and sometimes even pet health insurance (a whopping 69% of employers, in fact, are looking into that one, says Willis Towers Watson). But it could take time to roll out these perks consistently, as Turba explains above.
In the meantime, however, some perks are routinely negotiated. Reese says that she’s seen employers become more flexible with negotiating ancillary benefits, including flex time, remote or hybrid work options, PTO, and other perks.
“In the end, it doesn’t hurt to ask if there’s negotiating room around certain benefits but be reasonable and believe the employer if they tell you that their hands are tied in certain areas. If that happens, follow up by asking if they are considering adding or expanding that perk soon,” she recommends.
Be Prepared To Explain Yourself
Do your research. Follow the tips we give here to determine a realistic offer and lay a foundation for negotiation. “Using past data will help with justifying an increase upfront,” Reese says. Most importantly, she adds, don’t bait and switch.
“I think it’s important for candidates to understand what they want before going into the hiring process. Then stick with it. Moving the ball while in the hiring process isn’t fair to the employer. Think of it this way: How would you view that behavior if the situation was reversed?”
In the end, don’t be afraid to negotiate salary and perks if your expectations are reasonable. But if the very thought of doing so fills you with dread or you’ve had difficulty succeeding in those discussions in the past, working with a recruiter who can be your ally and sounding board may be your best bet.