Master These High-Impact Salary Negotiation Skills to Get More Money

You aced your final interview with a company that furthers your career goals, pays you more, and matches your professional ambitions. Your prospective employer sent you a great, albeit confusing, contract. After you learn how to understand your job offer letter, you want to ensure you are getting the highest possible compensation.

Key takeaways

• A job offer isn’t set in stone. You can negotiate a higher base pay, bigger bonuses, and better benefits.
• You should NOT mention salary requirements, much more negotiate salary with recruiter
• The “golden handcuffs” that keep you at your current job are also the “golden bars” that help you negotiate terms at your target company.

Your salary is your base pay. For most white-collar positions, salary is a fixed amount the organization pays you weekly, biweekly, or monthly. Employers present it as an annual sum in an offer letter.

But top-tier businesses often have additional financial incentives:

• Sign-on bonuses are one-time payments for joining the organization. An employer may include this amount with your first check or offer it as a retention bonus for staying with the company for a set period, such as six months or a year.
• Bonus target rates are a percentage of your salary for performing as expected. A bonus rate can range from 10% to 50%, but 15% is typical.
• A relocation bonus is compensation the company provides for moving to a new area.
• Restricted Stock Units (RSUs) are stocks (equity). A public company may offer shares but are unvested (restricted) until a set time or date. When a stock vests, it is available for you to take ownership. Meaning you only own it then.
• Options are opportunities to purchase shares in the company during a liquidation event, such as going public or being acquired.

All of these parts can be negotiable. Tech companies may set bonus target rates by levels, such as level one for a software engineer and level two for a senior engineer. So, you may discuss levels instead of percentages.

You want to focus on your first year – maxing out salary, bonus rate, sign-on bonus, and equity – because you don’t know how long you will be at the company.

The Best Alternative to a Negotiated Agreement (BATNA) is your Plan B. It’s what you have if you don’t take the offer. Your BATNA is your pay from your current employer. Or, if you are unemployed, it’s $0. The BATNA dictates how aggressive you can be in negotiations.

Your Reservation Price is the amount it will take for you to sign the contract. For instance, you may need the offer to be more than your BATNA, especially if the position means more work or impacting your home or family life.

A Golden Handcuff is something of value that keeps you tied to your current company, such as unvested stock shares. However, Golden Handcuffs can be Golden Bars and part of your negotiation efforts.

• Tuition reimbursement – If your current company covered school expenses, you might need to pay them back for leaving before a certain time.
• Your upcoming bonuses – Do not wait to look for a job because of an upcoming bonus.
• Geographical constraints – Your paycheck could be worth less because of higher state taxes or the cost of living in a new area.

Tell your prospective employer about your Golden Handcuffs. They may give you a higher sign-on bonus to compensate for tuition repayment or missed bonuses. You may need to demonstrate the cost-of-living difference between your current and prospective location. And the company can pay for moving costs.

The medium of negotiation is your first tool. I recommend having the conversation over the phone or via video conference. Don’t negotiate over email, as there are too many areas in writing that can be misinterpreted.

So much subtly occurs with language. Audio and video mediums allow you to develop a rapport and influence the person you are talking to into liking you. Don’t underestimate the power of likeability!

You can also give and pick up subtle hints of where there are concessions and flexibility. Explain the justifications for your requests, such as why you deserve a higher salary. But be aware of the company’s restraints.

1. Schedule a time to meet for negotiations.
2. Get all your facts and data together.
3. Have the conversation verbally.

Your second negotiation tool is knowledge. It is essential that you understand all parts of your offer letter. A bonus target rate can significantly add to your salary. For example, 15% of $150,000 is $22,500, so your total compensation is actually $172,500.

Be prepared with information that backs up your requests. Have the wage estimate for the position. For instance, FAANG companies have some of the highest salaries for U.S. workers. 

This organization may ask for proof of financial compensation from your current company. However, you can always say you cannot share documentation because of a non-disclosure agreement.

Make it clear that you are serious about working for the organization. You don’t want to use ultimatums unless willing to walk away from the opportunity.

You don’t have to agree to spoken terms immediately. You can ask for time to think about it, review the offer in writing, and get back to them.

Postpone resigning from your current company until you sign the contract and have a start date. Background checks and other silly stuff can go awry.

You may also want to prepare for a counteroffer from your current employer. Again, think about your BATNA, Reservation Price, and the reasons for wanting to pursue a new company:

• Higher pay
• Better title
• Different location
• To be closer to home
• To get away from a particular direct report

You can ask them for whatever you want because you have leverage. Be bold!

An offer letter can be confusing, but you are in the driver's seat once you get it. Here is a negotiation cheat sheet for you to use.

If you ever need a free second opinion, email negotiations@kadimacareers.com and we'll be in touch right away. You don't owe us a dime if we can't get you at least $10k more.