The Ultimate Guide to Negotiating a Job Offer

You have found your dream job, applied, interviewed, and received an offer. It can be tempting to accept immediately. However, you are a skilled and experienced individual. It is important to know your worth and negotiate for it. A company will compensate you with what they think they can get away with. Often, this is lower than what you deserve or want. If you do not negotiate, it could have a negative impact on your job satisfaction and overall career. This guide will show you how to negotiate for the compensation package you deserve. 

Preparing for Negotiation

Before you start negotiating, you need to prepare. Just like you prepared for the interview, the negotiation process requires you to do research. That way, you go into the process fully informed and prepared. 

Understanding Your Value

Start with the easiest step, what you know. You know your skills and experience. Use this information to determine your market value. Research the standard pay for someone with your expertise in your industry. You can aim high, but be realistic for your geographical area and the size of the company you applied for. Look beyond the pay at the commonly offered compensation packages. Some companies may offer a high salary with low benefits, while others offer a lower salary with a large benefits package. 

Researching the Company

The next step is to research the company you received the employment offer from. Understand the company’s health and current financial status. Look into the company culture and its current approach to employee compensation. Develop a profile outlining the company standard for offers and fringe limits. 

Additionally, you will negotiate with a person, not the company entity. Research the person you will negotiate with. Understanding their personality and position within the company can give you a negotiating edge. For example, if it is your future superior, you may take a gentler approach than if it is an HR representative. However, the HR representative may not have the same authority and freedom that your future supervisor would have. They may not be able to agree to a higher salary or extra benefits.  

Identifying Priorities

The next step in preparing for negotiations is to decide where your priorities lie. Create a list of things that are most important to you. Then, create a second list of things that would be nice to have but not deal breakers if you do not. This will help you prioritize what you negotiate for later. It will also help you stay focused and know when to stop negotiating. Do not negotiate for the sake of negotiation. You do not need to prove you are the best negotiator in the room. You also do not need to negotiate every little detail. 

Components of a Job Offer

When you start negotiating, you will likely get a job offer that includes several components. These will consist of a base salary, bonuses, benefits, incentives, company equity, and stock options. 


The salary is how much your paycheck will be. While this is important, do not get hung up on it. The salary is just one part of your compensation package. The general rule of thumb is to ask for more than you want and negotiate down to your ideal. Have a floor that you will not go below.

Benefits and Perks

Many people will agree to a lower salary if they feel the additional benefits and perks compensate. These additional benefits need to have a quantifiable value that you can calculate. For example, guaranteed flex hours, remote work time, relocation assistance, or PTO. 

You could also negotiate for benefits that do not have a quantifiable value. For example, you could ask for a title change after working with the company for a specific amount of time. It may not change much now, but it could be important later on when you want to progress in your career. Another benefit could be professional development or educational opportunities. This benefit allows you to invest in yourself for future career growth. 

Bonuses and Incentives

Bonus structures and incentives have an endless amount of configurations. It is up to you and the company how you decide to structure it for your compensation package. These are some common bonus structures: 

  • Profit sharing 
  • Spot bonus 
  • Non-cash bonus 
  • Referral bonus 
  • Signing bonus 
  • Milestone bonus
  • Project bonus 
  • Attendance bonus 
  • Annual bonus 
  • Holiday bonus 
  • Commission 
  • Retention bonus 
  • Longevity bonus 
  • Safety bonus 

It is highly unlikely that a company will agree to give you all of these. Typically, an industry will have its set of bonuses that you will see.

Equity or Stock Options

Some companies may offer equity or stock options. This is a common practice for new or growing companies. They may not have the financial resources to pay a high salary right away. However, they hope that equity or stock options will encourage you to stay on long-term. In addition, you would now have an ownership-like stake in the company. This will make you personally invested in its success. 

For you, this type of compensation is a gamble. If the company does well, you could potentially make significantly more than if you made a straight salary. However, if the company does poorly, you may never see a decent return on your equity or stock. 

If you accept equity or stock shares, you must clarify the terms. Future delusion is a risk. You could mitigate this by requesting more shares, a vesting schedule tied to performance growth, or a protection clause that guarantees share value. 

Another option is to ask for a discount purchase price and a long exercise window. This would let you buy shares at a discounted rate. The extended time period gives you the greatest flexibility in how you utilize this benefit. 

Timing and Approach

There is an art to negotiation, like a dance where the skillful know when to pause, step, spin, and dip. The art of timing is a skill some just inherently have while others must learn it. 

Choosing the Right Time

There is an ideal time to initiate negotiations during the hiring process. Start too soon, and you will turn the company off from hiring you. Wait too long, and you will miss your opportunity. You can follow the company’s lead if you are unsure of the best time. At some point, you should receive an initial offer. This would be a good time to respond with a counteroffer. 

Communication Strategies

Craft polite and assertive responses. Stick to the topic at hand. Saying less is more effective and reduces the risk of you accidentally giving away your negotiating leverage. Written offers and counter offers are best. That way, there is a complete record of the back and forth communications. 

Look at the Big Picture

Do not try to negotiate each individual element of your offer one by one. Instead, look at the compensation package as a whole and negotiate multiple aspects at once. This gives you more flexibility and negotiating ability. The company may be willing to provide you with more in one area if you are ready to give up something in another. Keeping the conversation on the big picture also keeps the negotiation talks moving forward. Otherwise, you risk getting mired in the details. 

Overcoming Objections and Concerns

At some point, the company may express concerns or objections. This is normal and an attempt at gaining the upper hand or power in the negotiation. How you respond will determine the company’s success with this strategy. 

Addressing Concerns

Try to anticipate the concerns that the company may have. Prepare a response that demonstrates your skills and experience to assuage their concerns. Be ready for tough questions that may delve into your current employment status. For example, if the company is your top choice or if you are entertaining other offers. This is an attempt to gain information that can give the company leverage. It is never a good idea to lie. However, you also do not want to get caught off guard and become defensive. 

Turning a No into a Yes

Do not immediately give up hope if the company first comes back with a no to one of your negotiation offers. A negotiation is a conversation, so sometimes you just need to reframe the question. Prepare responses for when the company says no by reframing the offer or by providing additional information that could impact the situation. Finally, what may be a “no” right now could turn into a “yes” later as the conversation continues. 

Handling Counteroffers

The flow of a negotiation is that one side will make an offer, and the other counters. Each side will respond and counter until a mutually agreeable outcome is established. This means you need to be prepared to receive counteroffers and make your own. 

Receiving a Counteroffer

Read the counteroffer thoroughly. If you have the time and ability, set it down and think about the offer for a while before responding. Make sure you understand each element of the counteroffer. Determine what is different from the offer you extended. Look beyond the literal offer to see the intent or purpose behind it. This will help you understand the company’s motivations. 

Effectively Responding to Counteroffers

Always communicate pleasantly and respectfully. Likability goes a long way in getting others to do what you want. When negotiating, a pleasant and polite demeanor keeps the conversation moving forward by ensuring the other party remains open to communication. Negotiations should never turn into a fight or involve aggression. You also do not want to be passive. The idea is to remain pleasant but not be a pushover. Don’t respond out of emotion.

Focus on your list of priorities to balance the things you want the most with the things you are willing to compromise. When you respond, use these lists to tailor your counteroffer. Remember, negotiations are not about winning. They are about finding a balance between what each party wants. You need to compromise somewhere. 

Know When to Walk Away

Once you come up with a bottom-line number that you need to feel comfortable accepting the job, you have to be willing to walk away from the opportunity if the employer cannot or will not match that. Negotiating below what you are comfortable with will result in a compensation package that you are not happy with. This is no way to start new employment. You will not feel motivated or have drive because you will feel as though you settled for below your perceived worth. 

Finalizing the Agreement

The final step of the negotiating process is to finalize your agreement. This is a relatively simple step but one that should never be skipped. You worked hard to negotiate your compensation package, so you want to make sure you document it. 

Documenting the Agreement

Always have your agreement documented in writing. That way, you can reference it later and ensure the terms get followed. The human memory is fallible, and relying solely on what people say will result in disagreement and conflict later. 

It is not enough to simply have your negotiated terms in writing. They also need to be a part of your offer letter or final employment contract. At the very least, your employment contract should reference your negotiated terms and not have any terms that would contradict them. 

Expressing Gratitude

Always conclude your negotiations on a positive note. Express gratitude for the employment opportunity and collaborative negotiating experience. This will set a positive tone for your employment with the company. Showing appreciation shows a level of professionalism that gives a positive impression to your future employers. 

Negotiate Your Next Compensation Package

You do not have to be a natural-born negotiator to successfully negotiate your next compensation package. With diligent preparation, you can give yourself the tools necessary to successfully negotiate for the things that matter the most. Time your negotiation and prepare to make and receive counter offers. When you reach an agreement that everyone is happy with, memorialize it in writing. 

Before you can start negotiating, you need to find a position with a company that you want to apply for. Browse our available jobs and submit your resume today. 

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