Negotiating Salary

Aaah, the ever popular question: to negotiate or not to negotiate.  Every time I speak to students at workshops and career panels the issue of salary negotiation inevitably arises.  It seems to be all the rage to “win” a negotiation by squeezing every penny out of a potential employer and get away with “one-upping” them, not to mention getting a healthy ego boost. I will never understand the mindset behind this desire and it is one I discourage.

I usually discourage negotiating salary for several reasons.  First, and most practical, employer salaries are not created out of thin air nor are they somehow made up on the spot.  They are based on a wide range of data including geography, median salaries in the industry, and the financial health of the company itself.  Companies very rarely, if ever, are trying to “put one over on you” by making an offer unreasonably low.

By not accepting the job in favor of negotiating, you risk having the company rescind their initial offer or, potentially worse, creating a sour and awkward beginning to your new career.  Moreover, as a matter of principle, there’s much more to a job than money—trust me.  As a high-level executive at Boeing once told me when I started my career there, “sometimes you’re overpaid, sometimes you’re underpaid, but by the end of your career everything usually balances out.”  Rather than focusing on negotiating, I would recommend working exceedingly hard after you begin your career and making your employer see what you are worth first hand.  Money always follows success regardless of industry or position.

There are a few limited circumstances where negotiating might be reasonable for an entry-level candidate. The most obvious is if you have multiple offers and the salary or some other tangible benefit really is the deciding factor.  For example, if you already have an offer from Company A for $55,000 a year and Company B offers you $50,000 a year, it is reasonable to discuss with Company B that, although you are excited about the possibility of working for them, another company has offered you a higher salary and unless they can match it you’re afraid you’ll have to respectfully decline their offer.  However, think long and hard about situations such as this.  Giving up $5,000 in salary starts to seem like a bargain if you get stuck working long hours in a job you despise.  In my opinion you are better off making a decision based on “fit” and work-life balance and ignoring the salary (within reason).

Other situations where negotiating may be reasonable might include the case where you clearly have a select set of skills and competencies that a normal entry-level candidate lacks.  This may occur for various reasons including work experience acquired before you started your university study (or perhaps if you took a year or more off during college to pursue a career), or if you have some extraordinary academic qualifications such as a dual degree in engineering and finance, for example.  Even in these situations however, I would proceed with caution.

If you do decide to negotiate your salary or other benefits I recommend doing so with facts and data.  This means doing a lot of research about the company and typical industry salaries and their associated experience level and making a strong quantitative argument about how you stand out from a typical candidate based on this information and what your target salary would be.  In addition, it goes without saying (but I’ll do so anyway) that you need to negotiate in the most cordial way possible and retain any contacts you have at the negotiating company if the negotiation breaks down and you decide to go elsewhere.