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Salary and negotiation

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Responding to formal offers

[/vc_column_text][vc_empty_space height=”25px”][vc_row_inner][vc_column_inner][vc_column_text]You’ve received a job offer! Now what? Here’s how to navigate the offer process and negotiate with confidence.[/vc_column_text][vc_empty_space height=”30px”]

In this section

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Responding to a job offer

[vc_empty_space height=”30px”][vc_column_text]If a company wants to hire you, it will likely extend a verbal offer. This usually includes the job title, starting salary, bonus structure, benefits, vacation time and start date.

 

Respond with enthusiasm and gratitude, but don’t accept right away. Committing yourself to a job too soon reduces your opportunity to negotiate your salary, bonuses and benefits. Instead, ask when you’ll receive a formal written offer and how long you’ll have to respond.

 

If you get an early offer (one that comes in while you’re still meeting with other companies) or an exploding offer (the company will withdraw it if you don’t accept by a certain date, i.e. typically between 24 to 48 hours) and you’re not ready to decide, respond enthusiastically and honestly: “I’m excited that [company] wants to make me an offer. There’s so much I like about your firm but would appreciate more time to gather information I need to make the right decision. Would you be willing to give me an extension?”

 

Most companies will agree to wait for a reasonable amount of time. If a company is unwilling, you’ll have to make an early decision.[/vc_column_text][vc_empty_space height=”30px”]

Your Rotman Career Coach can help you with the offer process!
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If you are a working professional master’s degree student, are you considering leaving your current job for another? If so, prepare for a counter-offer

 

If you’re resigning from your job, your employer may try to change your mind by offering more money, a promotion or added perks. Prepare yourself mentally for a counter-offer. This is especially important if you truly like your boss and the company. Understand clearly why you’ve decided to leave, so you won’t stay for the wrong reasons.

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Components of an offer

[vc_empty_space height=”30px”][vc_column_text]Here’s what you’ll likely find in a written offer. Many of these items are negotiable — not just the salary.

 

  • Job title
  • Employment status (part-time, full-time) and work hours
  • Location
  • Start date
  • Job description
  • Compensation package (base salary, bonus structure, commissions)
  • Benefits package (medical and dental, insurance, RRSP matching, stock options, equity, profit sharing, parental leave, professional development, tuition reimbursement, gym membership, expense account, company car, gas allowance, etc.)
  • Paid vacation time

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Salary research

[vc_empty_space height=”30px”][vc_column_text]To determine if a salary is fair, research the going rate for comparable positions at similarly sized companies in the same industry and city. Check job postings, ask your network, ask your Career Coach (some instances employers may disclose salary ranges) and use these free resources. Ideally, do your research when you start applying for jobs, so you’ll be prepared for an offer.

 

Canadian sources 

 

American sources

 

International sources

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Making your decision

[vc_empty_space height=”30px”][vc_column_text]When you get a job offer (or two, or three), ask yourself:

 

  • Do I like the job?
  • Does it fulfill my immediate career goals?
  • Will it challenge me and teach me new skills?
  • Will it help me reach my future goals?
  • Are the components of the offer fair and attractive?
  • Does it fit my personal priorities?

 

If you think the job is a good fit, your next decision is whether to negotiate the terms of the offer.

 

Compensation is important, but it’s not the only factor, even if you include bonuses and other financial perks. A job that pays less but offers great mentorship and advancement opportunities could be a much better career move than one that pays more but offers limited growth.

 

Quality of life is a key consideration. Many professionals value their family time as much as their work time, and they share household duties equally with their partners. Some ask potential employers for concessions that support their priorities, such as:

 

    • Working from home
    • Time off or flexible schedule
    • Child/elder care assistance

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Negotiating an offer

[vc_empty_space height=”30px”][vc_column_text]It’s perfectly fine to accept the first or second offer you get, if the job is a good fit and the compensation is fair, based on your research. If you’re interested in a job but the offer seems low, you may have room to negotiate.

 

An employer won’t withdraw its offer if you ask professionally if the salary is negotiable. Here is an example of how you might respond:

Thank you for this offer. I have reviewed all the terms and am hoping you would consider increasing the salary to $[amount] for these reasons…

(Tip: Don’t list “student debt” among your reasons.)

 

Whether the employer says yes, no or maybe, thank them for reconsidering or allowing you to present your points, and say that you will get back to them with a decision by the deadline date.

 

Every situation is different, but keep these negotiation tips in mind:

 

Take a positive approach

    • Attitude is the most important ingredient for negotiating. Plan with a positive, collaborative attitude and the desire for a win/win outcome. A successful negotiation is one where both sides feel listened to and happy with the end result.
    • Negotiate from a reasonable position, and have a rationale for the alternatives you propose.
    • Be professional and courteous, and keep showing your enthusiasm and interest.
    • Decide the limits of your flexibility in advance. Avoid making impromptu decisions during the negotiation.

 

What to negotiate

    • If you’re negotiating several points, make a list and provide it to your main contact at the company.
    • Link all negotiable items to the job itself and what you can offer the company. When negotiating salary, for example, if you have more years of experience than the job requires, point this out.
    • Discuss major issues (salary, bonuses) before perks. Mentioning perks too early puts issues on the table that can be negotiated away.
    • When negotiating the base salary, mention the going rate for comparable positions in similarly sized companies in the same industry and city.
    • Mention your prior work experience and compensation history, if they’re relevant.
    • If the job pays bonuses, ask how they’ll be determined and what range of magnitude is likely, based on history and current profit trends. If bonuses are based on personal performance, ask what opportunities, resources and limitations you’ll have, and what measurement criteria apply.
    • If the company is near the end of its bonus or review cycle, you may be able to negotiate a pro-rated bonus or six-month salary review.
    • Negotiate benefits such as vacation time, signing bonuses, flexible working arrangements, etc.

 

What are your deal-breakers?

    • Ask yourself if you’re willing to decline a certain offer because the compensation is lower than that of other offers, or because you think your value proposition is higher. Your desire to work at the company might outweigh the difference.

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If you’re a working professional master’s degree student leaving one job for another…

 

You can use your existing compensation package as a starting point for discussion: “My base salary is $X, my bonus target is $Y and I have additional perks of A, B and C.” You can incorporate industry research if you feel your existing compensation package is below current market value.

 

Companies sometimes realize they need to offer higher compensation to entice someone to leave their job and risk joining a new organization. They may increase the base salary and/or enhance the perks, like vacation time.

[vc_empty_space height=”30px”][vc_column_text]Do companies reveal base salary ranges?

 

  • Salary ranges are not typically disclosed during the campus recruitment cycle until offers are made.
  • Once you have completed your master’s program, companies will sometimes disclose a target salary range in the job posting, during the initial interview or through a search firm recruiting on its behalf.

 

When do we discuss compensation expectations?

 

Let the employer initiate this discussion, because it has all the information regarding the job’s target salary range and what employees in similar roles are making.

 

At some point during the recruitment process, sometimes very early on, employers ask candidates about their compensation expectations to ensure that neither party wastes time with interviews, etc., if the figures are wildly out of line.

 

Candidates may be asked about salary at different points during the process:

 

  • When applying with a paper application form (very rare these days): Don’t share your compensation expectations. Write in the space provided that it is negotiable. If asked to provide a current salary, write that you’ll cover it during the interview.

 

  • When applying with an online form: You usually have to fill out compensation information or your application won’t be accepted. Pick the amount or range that matches the average of what you’ve seen in your job research.

 

  • When asked for compensation expectations during an interview: Communicate first that you expect to be paid a salary in line with what others who have a similar role and background are being paid. Don’t give a specific number (e.g., $75,000); instead, give a range (e.g., “somewhere in the $70,000 to $90,000 range”).

 

  • When asked about your current or previous compensation during an interview: Share the information honestly and include all aspects of your total compensation package (base salary, bonus potential, perks, etc.). If you made a lot less than what the new role would pay, or if you made more but would accept a lower salary in the new role, you can provide a rationale.

 

Always emphasize that you’re most interested in getting a sense of your fit with the position and the company before discussing finances in detail.[/vc_column_text][vc_empty_space height=”30px”]

Next steps

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  • Get support from your Rotman Career Coach during the offer process.

 

Next: Thank you notes[/vc_column_text][vc_empty_space height=”40px”][/vc_column_inner][/vc_row_inner][/vc_column][/vc_row]