What to negotiate in offers

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HardHitter
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What to negotiate in offers

Post by HardHitter » Tue Dec 04, 2018 5:45 am

So as seen in one of my other threads, I will be switching companies for the first time in my career for a great opportunity. Company has mentioned that the formal offer is being finalized and should be provided to me this week. Since this is my first time seeing a actual offer letter, I want to pick everyone's brains in what I should be considering. Additionally, if there is a gap between current company and what new company offers, where do I make that up? Is it something you just ask for them to change specific to me or do you negotiate that into a base salary increase to make up that amount lost? At the end of the day, I don't want to feel like I'm nickle & dimeing them (e.g. if cell phone stipend is different by $10/mo) but I also don't want to leave things on the table.

Total Compensation: I don't think there is anything I need to evaluate here. Base compensation is receiving a significant bump of around 48% and then two bonus offerings in comparison to the one at current company. I'll need to see what the % is for these, but I expect the bonus % and the additional bonus offering over current company will further grow the overall total compensation vs current company easily over 50-55% increase.

401K: Compare current company matching policy vs new. Request funds offered in 401K to compare as well. If match or funds are better at current company, how do I request to makeup this money?

Pension: I'm pretty sure my current company is one of the very few that have a pension plan. How do I bring this into consideration at new company if they don't offer it?

Benefits: As similar to the above, understand the plans and the cost they offer and compare with current company. What is there to negotiate, if anything, if the plans are poor? Same question on if cost of benefits exceed current company? Is it out of line to ask for salary increase to make-up the gap per year?

PTO: I believe both current and new company are the same with 5 weeks of PTO

Stock: Unfortunately, both companies have no equity

Additional Perks: At current company, we get a monthly stipend to cover cell phone cost. At new company, it lists cell phone stipend, gym membership stipend, etc under reimbursements. If current company stipends are greater, should I raise this?

What else should be considered?

RickBoglehead
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Re: What to negotiate in offers

Post by RickBoglehead » Tue Dec 04, 2018 6:10 am

https://hbr.org/2014/04/15-rules-for-ne ... -job-offer

https://www.glassdoor.com/blog/guide/ho ... ur-salary/

Just two of the many job-related sources.

Much of what you ask about negotiating isn't negotiable.

With a 50% raise, do you really think that asking for an increase in phone stipend wouldn't seem petty?

wilked
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Re: What to negotiate in offers

Post by wilked » Tue Dec 04, 2018 6:40 am

I have no idea why you are comparing your old job and new job. It’s not relevant. The only thing with relevance are industry standards / comps.

Going line by line is not productive.

Things that can be measured in dollars you should look at via the lens “total compensation”. For example, if you have to go out of pocket $100/month extra for health insurance, but the new company pays you $1200 more per year, total comp is even. Don’t waste anyone’s time bargaining for the company to pay $100 more toward health care

There are things that aren’t measured in dollars. These might be weeks of vacation, ability to work from home, or others. These are worth negotiating for.

StopIroningShirts
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Re: What to negotiate in offers

Post by StopIroningShirts » Tue Dec 04, 2018 7:17 am

I work as a hiring manager for professionals..

When I see a nearly 50% base pay increase, my initial thought is to be cautious about how you ask about a lot of other things. If there's no equity at either company, this makes the decision easier.

Vacation/Paid Time Off should be outlined in the offer letter. Usually candidates negotiate base, bonus, and vacation in that order, then rarely ask about the other stuff.

When you go to ask about the "other stuff" (401k, insurance costs, access to a deferred comp plan), you usually want to be near done with the first negotiations. You want to say to the hiring manager "This is really good and I'm looking forward to coming on board. Can you send me the details on XYZ benefits so I can look those over?"

Depending on the income level, I would ask if they offer a deferred compensation / supplemental executive retirement plan. That has done wonders our ability to put money away

TheOscarGuy
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Re: What to negotiate in offers

Post by TheOscarGuy » Tue Dec 04, 2018 7:38 am

HardHitter wrote:
Tue Dec 04, 2018 5:45 am
So as seen in one of my other threads, I will be switching companies for the first time in my career for a great opportunity. Company has mentioned that the formal offer is being finalized and should be provided to me this week. Since this is my first time seeing a actual offer letter, I want to pick everyone's brains in what I should be considering. Additionally, if there is a gap between current company and what new company offers, where do I make that up? Is it something you just ask for them to change specific to me or do you negotiate that into a base salary increase to make up that amount lost? At the end of the day, I don't want to feel like I'm nickle & dimeing them (e.g. if cell phone stipend is different by $10/mo) but I also don't want to leave things on the table.

Total Compensation: I don't think there is anything I need to evaluate here. Base compensation is receiving a significant bump of around 48% and then two bonus offerings in comparison to the one at current company. I'll need to see what the % is for these, but I expect the bonus % and the additional bonus offering over current company will further grow the overall total compensation vs current company easily over 50-55% increase.

401K: Compare current company matching policy vs new. Request funds offered in 401K to compare as well. If match or funds are better at current company, how do I request to makeup this money?

Pension: I'm pretty sure my current company is one of the very few that have a pension plan. How do I bring this into consideration at new company if they don't offer it?

Benefits: As similar to the above, understand the plans and the cost they offer and compare with current company. What is there to negotiate, if anything, if the plans are poor? Same question on if cost of benefits exceed current company? Is it out of line to ask for salary increase to make-up the gap per year?

PTO: I believe both current and new company are the same with 5 weeks of PTO

Stock: Unfortunately, both companies have no equity

Additional Perks: At current company, we get a monthly stipend to cover cell phone cost. At new company, it lists cell phone stipend, gym membership stipend, etc under reimbursements. If current company stipends are greater, should I raise this?

What else should be considered?
I think what determines your salary is what the market is willing to pay for it. However, I would be very uncomfortable in your shoes to ask for more if I am getting 55% of compensation raise. I am assuming this is same city, and not a relocation situation? Also, the bit about phone stipend seems very trivial. They likely won't change the stipend for you, as usually these things are determined company-wide, with variations for levels. Are you seriously going to bring up a $10 monthly stipend difference in cellphone at the negotiation?

HardHitter
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Re: What to negotiate in offers

Post by HardHitter » Tue Dec 04, 2018 7:55 am

StopIroningShirts wrote:
Tue Dec 04, 2018 7:17 am
I work as a hiring manager for professionals..

When I see a nearly 50% base pay increase, my initial thought is to be cautious about how you ask about a lot of other things. If there's no equity at either company, this makes the decision easier.

Vacation/Paid Time Off should be outlined in the offer letter. Usually candidates negotiate base, bonus, and vacation in that order, then rarely ask about the other stuff.

When you go to ask about the "other stuff" (401k, insurance costs, access to a deferred comp plan), you usually want to be near done with the first negotiations. You want to say to the hiring manager "This is really good and I'm looking forward to coming on board. Can you send me the details on XYZ benefits so I can look those over?"

Depending on the income level, I would ask if they offer a deferred compensation / supplemental executive retirement plan. That has done wonders our ability to put money away
I think the key thing in this they do not know current salary, nor will it be disclosed. They may know ball park range, but they are in the dark on this.

To be honest, I don't really think there is much to ask for, I'm just asking if there is anything important I'm missing. In my eyes, I'm happy with the only thing we've verbally agreed to which is base comp. The offer letter will spell out the bonus structure, but I'm 90% sure it'll be better than current company.

Now as you mentioned, the "other stuff" is what I'm focusing on. If I'm going to be losing out on $5-$10K of 401K match, to me, isn't that material enough to raise for further discussions? Some thing with benefit costs. If the plans are not as strong AND I'm paying more, I would think that would be a discussion point as well. What is typically the solution to these situations when the issue is raised?

Lastly, you mentioned deferred compensation/supplemental executive retirement plan. I haven't heard of these before, are you able to elaborate?

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TomatoTomahto
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Re: What to negotiate in offers

Post by TomatoTomahto » Tue Dec 04, 2018 7:57 am

My wife (mostly) and I have hired hundreds of people. We both feel that usually, people are on their best behavior during the hiring process; it’s as good as they get.

If someone, after a 55% increase (!), came to me with penny ante nonsense, I’d retract any offer before it was too late, and consider myself as having dodged a bullet. Really.

HardHitter
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Re: What to negotiate in offers

Post by HardHitter » Tue Dec 04, 2018 7:58 am

TheOscarGuy wrote:
Tue Dec 04, 2018 7:38 am

I think what determines your salary is what the market is willing to pay for it. However, I would be very uncomfortable in your shoes to ask for more if I am getting 55% of compensation raise. I am assuming this is same city, and not a relocation situation? Also, the bit about phone stipend seems very trivial. They likely won't change the stipend for you, as usually these things are determined company-wide, with variations for levels. Are you seriously going to bring up a $10 monthly stipend difference in cellphone at the negotiation?
See my reply above for a little more detail. And no, I wasn't eluding to chasing after a couple hundred dollar difference a year.

awval999
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Re: What to negotiate in offers

Post by awval999 » Tue Dec 04, 2018 8:06 am

I think what others are saying... is yes, ask HR about the 401k match, who the servicer is and what funds are available, ask about the cost of health insurance, value of the health insurance, etc., but understand that there is no room for negotiating on those issues. As others have eluded to, those are determined company wide.

Now take that information, with the new compensation, bonus, etc., and calculate your total compensation for the new job.

Compare the total compensation to your current total compensation.

Make a decision on that.

If it's not high enough, then fine, decline the offer based on total compensation, not nickel and diming... "I'm missing out on 2% additional 401k match, please match that, I'm missing out on $90/month phone credit, please match that., etc."

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8foot7
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Re: What to negotiate in offers

Post by 8foot7 » Tue Dec 04, 2018 8:12 am

Pigs get fat. Hogs get slaughtered. You’re looking at a 55% raise. Take it and be grateful, or reject it. You don’t need a checklist man.

TheOscarGuy
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Re: What to negotiate in offers

Post by TheOscarGuy » Tue Dec 04, 2018 8:59 am

HardHitter wrote:
Tue Dec 04, 2018 7:55 am

To be honest, I don't really think there is much to ask for, I'm just asking if there is anything important I'm missing. In my eyes, I'm happy with the only thing we've verbally agreed to which is base comp. The offer letter will spell out the bonus structure, but I'm 90% sure it'll be better than current company.

Now as you mentioned, the "other stuff" is what I'm focusing on. If I'm going to be losing out on $5-$10K of 401K match, to me, isn't that material enough to raise for further discussions? Some thing with benefit costs. If the plans are not as strong AND I'm paying more, I would think that would be a discussion point as well. What is typically the solution to these situations when the issue is raised?
In my negotiations, I have discussed lesser 401K from next company, and inferior healthcare plan if the total compensation were close to what I was making. And at the time, since I was jumping the ship for a small increase in total compensation, which was essentially negated by worse 401K and healthcare plan, I raised that issue. I think I had a standing there, and the HR person told me it was smart to compare those benefits during negotiations.

Unless the 10K 'loss' on 401K match significantly eats up the 55% compensation increase (its tough to tell, since I don't know your compensation :D ), I think you shake hands and be extremely happy about the offer.

JuniorBH
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Re: What to negotiate in offers

Post by JuniorBH » Tue Dec 04, 2018 9:21 am

TheOscarGuy wrote:
Tue Dec 04, 2018 7:38 am
I think what determines your salary is what the market is willing to pay for it. However, I would be very uncomfortable in your shoes to ask for more if I am getting 55% of compensation raise. I am assuming this is same city, and not a relocation situation? Also, the bit about phone stipend seems very trivial. They likely won't change the stipend for you, as usually these things are determined company-wide, with variations for levels. Are you seriously going to bring up a $10 monthly stipend difference in cellphone at the negotiation?
Ditto to all of the above. I just did this as part of a job switch; I negotiated a 27% raise to 35% and got another $15k in signing bonus. That said, the company didn’t know my current rate (illegal to ask in my state) and I was confident about what the market rate was. In your case, unless you have data to support asking for more, I wouldn’t go any further. And, while I did a comparison of the benefits, I wouldn’t have raised any issues there unless there was a material difference (ie giving back 5% of the raise).

and 1000% agree in the phone stipend, small potatoes and I’d feel silly even raising it.

Thegame14
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Re: What to negotiate in offers

Post by Thegame14 » Tue Dec 04, 2018 9:46 am

you are getting a HUUUUGE raise of 50% and you are going to bother them asking about what funds are in their 401K or about a $10 monthly stipend..... get a grip.

There are generally only 2 maybe 3 things you can negotiate in an offer, mainly salary, then if you are lucky PTO, and then maybe if you are really lucky getting a policy like work from home in writing. The rest is company policy and they couldn't care less about what your prior company did or didn't do.

You are very much nickel and diming them.... Just make sure the offer is clear and concise and there is nothing left out that you were told, ie if you were give a % target bonus, that should be in there, with a caveat that it is subject to personal and company performance..

stoptothink
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Re: What to negotiate in offers

Post by stoptothink » Tue Dec 04, 2018 10:25 am

TomatoTomahto wrote:
Tue Dec 04, 2018 7:57 am
My wife (mostly) and I have hired hundreds of people. We both feel that usually, people are on their best behavior during the hiring process; it’s as good as they get.

If someone, after a 55% increase (!), came to me with penny ante nonsense, I’d retract any offer before it was too late, and consider myself as having dodged a bullet. Really.
+1. I actually did this about 2yrs ago. Young man accepted an offer and then called a few days later saying he wanted more money. I rescinded the offer. He eventually posted bad reviews all over the internet about our company, mostly saying he was lied to during the interview process. Can't imagine how he would have responded at the first sign of hardship on the job.

I suppose it depends on how much they want you and how easily replaceable you are, but I wouldn't even consider attempting to negotiate anything but salary, bonus, and flexibility to work remotely.

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8foot7
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Re: What to negotiate in offers

Post by 8foot7 » Tue Dec 04, 2018 10:45 am

stoptothink wrote:
Tue Dec 04, 2018 10:25 am
TomatoTomahto wrote:
Tue Dec 04, 2018 7:57 am
My wife (mostly) and I have hired hundreds of people. We both feel that usually, people are on their best behavior during the hiring process; it’s as good as they get.

If someone, after a 55% increase (!), came to me with penny ante nonsense, I’d retract any offer before it was too late, and consider myself as having dodged a bullet. Really.
+1. I actually did this about 2yrs ago. Young man accepted an offer and then called a few days later saying he wanted more money. I rescinded the offer. He eventually posted bad reviews all over the internet about our company, mostly saying he was lied to during the interview process. Can't imagine how he would have responded at the first sign of hardship on the job.

I suppose it depends on how much they want you and how easily replaceable you are, but I wouldn't even consider attempting to negotiate anything but salary, bonus, and flexibility to work remotely.
I come at this from two angles. Prior to accepting an offer is about the only legitimate time where an employee can get meaningful concessions from an employer. After the relationship begins, it's difficult for an employee to adjust his or her package. So I don't think it's inappropriate to feel like negotiations for an offer are germane during that "here's our offer, what do you think of it?" phase, and I wouldn't automatically withdraw an offer because someone wanted to probe a bit and see where the financial boundaries were.

BUT - and this is a BIG BUT

1) a 55% raise is a strong offer and when someone comes at you and makes a strong offer, they're sending a strong signal that we don't want to waste time with a back and forth; we like you and we want to make it worth your while to join us so please accept this big offer. When you get strong offers, you should just. take. them.

2) it's really poor form to accept an offer and then come back later before you start and say, "nope, never mind, need more money." I wouldn't blame anyone for rescinding an offer at that point.

and

3) for f***'s sake don't get twisted into discussions about a $50/mo cell reimbursement.
Last edited by 8foot7 on Tue Dec 04, 2018 10:47 am, edited 1 time in total.

cherijoh
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Re: What to negotiate in offers

Post by cherijoh » Tue Dec 04, 2018 10:46 am

HardHitter wrote:
Tue Dec 04, 2018 7:55 am
StopIroningShirts wrote:
Tue Dec 04, 2018 7:17 am
I work as a hiring manager for professionals..

When I see a nearly 50% base pay increase, my initial thought is to be cautious about how you ask about a lot of other things. If there's no equity at either company, this makes the decision easier.

Vacation/Paid Time Off should be outlined in the offer letter. Usually candidates negotiate base, bonus, and vacation in that order, then rarely ask about the other stuff.

When you go to ask about the "other stuff" (401k, insurance costs, access to a deferred comp plan), you usually want to be near done with the first negotiations. You want to say to the hiring manager "This is really good and I'm looking forward to coming on board. Can you send me the details on XYZ benefits so I can look those over?"

Depending on the income level, I would ask if they offer a deferred compensation / supplemental executive retirement plan. That has done wonders our ability to put money away
I think the key thing in this they do not know current salary, nor will it be disclosed. They may know ball park range, but they are in the dark on this.

To be honest, I don't really think there is much to ask for, I'm just asking if there is anything important I'm missing. In my eyes, I'm happy with the only thing we've verbally agreed to which is base comp. The offer letter will spell out the bonus structure, but I'm 90% sure it'll be better than current company.

Now as you mentioned, the "other stuff" is what I'm focusing on. If I'm going to be losing out on $5-$10K of 401K match, to me, isn't that material enough to raise for further discussions? Some thing with benefit costs. If the plans are not as strong AND I'm paying more, I would think that would be a discussion point as well. What is typically the solution to these situations when the issue is raised?

Lastly, you mentioned deferred compensation/supplemental executive retirement plan. I haven't heard of these before, are you able to elaborate?
Were you grossly underpaid in your old role? Does the new job include a significant increase in responsibility (e.g., going from individual contributor to manager)? Are you relocating to a higher cost of living area? Unless you answer yes to at least one of these questions, you should seriously consider that the current offer on the table already takes into account any deficiencies in the total compensation package like an inferior 401k match. That is why posters are mentioning the huge increase in base pay. It is far more common to see salary bumps of about half what you have been offered when you switch jobs. Where does this offer fall in terms of a fair market offer?

Negotiations with a future employer should always be win-win. It isn't the same as negotiating for a new car where you never have to deal with the salesman again! The hiring manager may have another candidate in the wings who has almost the same qualifications as you. He/she could decide that you are too "high maintenance" and withdrawal the original offer. Or you could get what you ask for and then see limited or no raises in the future. Larger corporations generally have pay bands and when you get to a high point in range, you will likely see a deceleration in raises until you can get promoted to the next pay band.

LiterallyIronic
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Re: What to negotiate in offers

Post by LiterallyIronic » Tue Dec 04, 2018 11:02 am

There was a person on /r/jobs recently who got a job offer for $80k and was told that was higher than they planned, but they were willing to do it for them.

This person went back with an e-mail asking for $85k, asking about signing bonus, annual raises/bonuses, and a huge laundry list of 17 other items, including asking if they had a mentor program, asking if they covered Weight Watchers, asking if they covered gym membership, and so on.

The offer was rescinded two hours later.

Pigs get fat; hogs get slaughtered. You're getting a massive raise and then you want to know if they'll pay for your $20 cell phone bill? Don't do it.

CFOKevin
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Re: What to negotiate in offers

Post by CFOKevin » Tue Dec 04, 2018 11:04 am

HardHitter,

Congrats on the job offer and I trust they know little about how their total comp compares to your current comp. I've hired hundreds of people and been hired 7-8 times myself and have always enjoyed a bit of good natured negotiation. Usually, there is at least some room to improve an offer and I'd suggest the following:

Let them know how excited you are about the role, Company, opportunity, etc. Then, let them know it is a solid offer. But, your current employers retirement benefits (pension plus better 401K match) allow you to realize $X thousands more than you'll get at Newco. You know they can't change their plans, but would appreciate additional compensation to make up for that. Then, stop talking (often the hardest part in any negotiation).

See what they come back with (I can't imagine them pulling your offer) and plan to accept with appreciation. My guess is that you'll get an extra 5% or so in total target comp, maybe a bit more.

Good Luck,

Kevin

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TomatoTomahto
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Re: What to negotiate in offers

Post by TomatoTomahto » Tue Dec 04, 2018 11:21 am

CFOKevin wrote:
Tue Dec 04, 2018 11:04 am
HardHitter,

Congrats on the job offer and I trust they know little about how their total comp compares to your current comp. I've hired hundreds of people and been hired 7-8 times myself and have always enjoyed a bit of good natured negotiation. Usually, there is at least some room to improve an offer and I'd suggest the following:

Let them know how excited you are about the role, Company, opportunity, etc. Then, let them know it is a solid offer. But, your current employers retirement benefits (pension plus better 401K match) allow you to realize $X thousands more than you'll get at Newco. You know they can't change their plans, but would appreciate additional compensation to make up for that. Then, stop talking (often the hardest part in any negotiation).

See what they come back with (I can't imagine them pulling your offer) and plan to accept with appreciation. My guess is that you'll get an extra 5% or so in total target comp, maybe a bit more.

Good Luck,

Kevin
That might work, and they are unlikely to pull the offer due to a carefully worded request.

Re "Usually, there is at least some room to improve an offer": I think that's true if they don't know how large an increase they offered OP. He didn't disclose compensation, but sometimes . . .

HEDGEFUNDIE
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Re: What to negotiate in offers

Post by HEDGEFUNDIE » Tue Dec 04, 2018 11:25 am

LiterallyIronic wrote:
Tue Dec 04, 2018 11:02 am
There was a person on /r/jobs recently who got a job offer for $80k and was told that was higher than they planned, but they were willing to do it for them.

This person went back with an e-mail asking for $85k, asking about signing bonus, annual raises/bonuses, and a huge laundry list of 17 other items, including asking if they had a mentor program, asking if they covered Weight Watchers, asking if they covered gym membership, and so on.

The offer was rescinded two hours later.

Pigs get fat; hogs get slaughtered. You're getting a massive raise and then you want to know if they'll pay for your $20 cell phone bill? Don't do it.
This person did it wrong. First, you never negotiate via email. Second, you never bring in ancillary benefits that amount to pennies. Third, she/he should have asked for 20% more total recurring comp, and let the company figure out how to make it work.

HardHitter
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Re: What to negotiate in offers

Post by HardHitter » Tue Dec 04, 2018 11:45 am

Appreciate all the feedback guys.

Here are the details:

- Salary is 12% less than the company salary average for my position based upon their own market research and salary bands provided to employees at year end
- Received less than a 2% raise at year end which triggered the search
- New job will be a significant jump in responsibility moving from a mid-level to now company leadership position
- Position is remote but likely will involve some travel (only difference vs current job is I need to be in office days I'm not traveling)

If comparing apple to apple companies, current base salary offer would fall about $30K short of the starting salary band for the level. New company is a much smaller company, which may explain the salary restrictions. Hiring manager has communicated I am $10K short of the max salary band they are budgeting for.

I'm in the dilemma of going after that money or not because I've already received a large jump from current salary but still for the new position be considered below market.

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greg24
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Re: What to negotiate in offers

Post by greg24 » Tue Dec 04, 2018 12:05 pm

LiterallyIronic wrote:
Tue Dec 04, 2018 11:02 am
There was a person on /r/jobs recently who got a job offer for $80k and was told that was higher than they planned, but they were willing to do it for them.
Here is the thread, with the original post intact. I had to use google caching as the OP deleted their OP.

https://webcache.googleusercontent.com/ ... clnk&gl=us

Dottie57
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Re: What to negotiate in offer

Post by Dottie57 » Tue Dec 04, 2018 12:40 pm

My advise is to not ask for more. You are in a new role. The new company is taking a risk on you as a candidate without experience in the role. Keep track of your successes and failures. Be able to brag when bonus and raise time comes.

This sounds very good for you. Don’t get greedy.

You know all I said above.

HEDGEFUNDIE
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Re: What to negotiate in offers

Post by HEDGEFUNDIE » Tue Dec 04, 2018 12:49 pm

DW & I just went through two job offer negotiations. Here are some negotiable elements which might be overlooked:

1. Forfeited annual bonus. Most companies only pay annual bonus once per year, if you quit 11 months in, you lose the bonus that you earned for those months. This can be negotiated with the new company in the form of a signing bonus.
2. Forfeited 401k match. Same concept as above, if your company gives your match in an annual lump sum which you stand to forfeit.
3. Forfeited RSUs.
4. Old company signing bonus repayment. I was 1.5 years into my old job which had a two year clock on repaying the signing bonus. So that repayment was negotiated into a signing bonus with the new company.

Point
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Re: What to negotiate in offers

Post by Point » Tue Dec 04, 2018 12:53 pm

A stipend is taxable. A reimbursement is not.

You have to look st the big picture.

drk
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Re: What to negotiate in offers

Post by drk » Tue Dec 04, 2018 1:17 pm

TomatoTomahto wrote:
Tue Dec 04, 2018 7:57 am
If someone, after a 55% increase (!), came to me with penny ante nonsense, I’d retract any offer before it was too late, and consider myself as having dodged a bullet. Really.
This is exactly why job-seekers should not disclose their current compensation.

pdavi21
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Re: What to negotiate in offers

Post by pdavi21 » Tue Dec 04, 2018 1:22 pm

The most important thing to negotiate is base salary...it's also the hardest to increase.
The least important thing to negotiate is sign on bonus...it's also the easiest to increase.

Benefits can come and go...base pay is usually more important as everything calcs off it.

oilrig
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Re: What to negotiate in offers

Post by oilrig » Tue Dec 04, 2018 2:13 pm

If I were in your shoes I would ask if there's anyway they can do a sign-on bonus to make up for the loss of pension and 401k match that you currently receive. If you are already receiving a sign-on bonus then shut up and accept it!

willyd123
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Re: What to negotiate in offers

Post by willyd123 » Tue Dec 04, 2018 2:49 pm

My job for the last 20 years is the person who negotiates on behalf of the company and I can tell you that if we knew we were increasing your cash compensation by 50%-55% we would not negotiate with you on any of the other components except maybe PTO but in that case, you say they are matching your current arrangement.

ThrustVectoring
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Re: What to negotiate in offers

Post by ThrustVectoring » Tue Dec 04, 2018 3:52 pm

You basically take whatever is standard for the position, especially when it's a significant pay bump for you that you don't expect other places to match. My standard advice on negotiating, in order:
  • Ask for more time to consider the offer - you generally want at least two weeks, especially if you're interviewing at multiple places simultaneously (you want to have multiple offers to play off each other, generally). It's a big decision, and you want to have time to make sure you make the right choice. If they play hardball on exploding offer timelines under a week in length, that's a pretty big red flag about the company culture anyhow, so I'd feel happy passing if this is a deal-breaker.
  • Top-line salary. Generally you want them to name a number first, and then you'll probably ask for 5-10% more money on top of that, and then they either say yes or no. Again, blowing up negotiations because you tried to negotiate is a red flag. Typically, places will price their initial offer to have room to negotiate up, so it's basically a bullshit game that few people tell you about that gives you really easy money if you play.
  • Signing bonus or relocation. This step is optional, but again it's often free money if you merely ask for it. Sometimes if they can't make a concession on salary they'll offer a signing bonus in lieu, especially if you applied directly rather than going through a recruiter.
All the other incidentals are going to be pretty much standard for your role in the company, unless you're like, really senior (you probably aren't, this is your first job hop). It's not worth it for their HR to negotiate exceptions, since it makes administering things much more complicated and you honestly aren't that important. And anyways, any negotiating room you have should be spent on top-line salary. It's relatively cheap personally for your negotiating partner to cede (it's the company's money, and it's a one-and-done deal), and you care a lot about it compared to PTO etc.

tl;dr - if you can negotiate on PTO, you could've negotiated harder on salary, and it's far better for you to spend the effort on salary negotiations. Don't bother with basically anything other than negotiating on salary, with possibly taking care of negotiating process stuff first and a signing bonus in lieu of salary concessions.
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N10sive
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Re: What to negotiate in offers

Post by N10sive » Tue Dec 04, 2018 3:56 pm

The only real leverage I think you have is the pension. Depending on that you could negotiate a sign on bonus or perhaps the 10k bump in salary. That would be the only thing Id tried to negotiate.

OTOH maybe this company pays higher salary in lieu of worse benefits? While it sounds like a no brainer to switch because of the cash compensation increase, it is good you are looking at everything albeit most of the responses on this thread.

BeneIRA
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Re: What to negotiate in offers

Post by BeneIRA » Tue Dec 04, 2018 4:22 pm

CFOKevin wrote:
Tue Dec 04, 2018 11:04 am
HardHitter,

Congrats on the job offer and I trust they know little about how their total comp compares to your current comp. I've hired hundreds of people and been hired 7-8 times myself and have always enjoyed a bit of good natured negotiation. Usually, there is at least some room to improve an offer and I'd suggest the following:

Let them know how excited you are about the role, Company, opportunity, etc. Then, let them know it is a solid offer. But, your current employers retirement benefits (pension plus better 401K match) allow you to realize $X thousands more than you'll get at Newco. You know they can't change their plans, but would appreciate additional compensation to make up for that. Then, stop talking (often the hardest part in any negotiation).

See what they come back with (I can't imagine them pulling your offer) and plan to accept with appreciation. My guess is that you'll get an extra 5% or so in total target comp, maybe a bit more.

Good Luck,

Kevin
This is great advice. Keep it simple, say how excited you are about the opportunity, and you can say something like this reply has or "based on other offers I am looking at" or something to that effect, then say you want 7%-10% more than they offered. They will probably give you the 5% raise and then move on. Don't focus on any of this small stuff. Just wrap it all up in a bow. Based on the total compensation, I would like to counter at "7-10% more". Don't get in the weeds.

The one thing I haven't seen brought up is that I believe in the past the OP has mentioned he is in sales. In my experience, it is poor form for a salesman to accept the first job offer they receive and some negotiation is expected. As the saying goes, if someone accepts the first offer and doesn't counter, then no one is happy. The person making the offer wonders if you would have taken less and you wonder if you would have gotten more.

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Re: What to negotiate in offers

Post by HEDGEFUNDIE » Tue Dec 04, 2018 4:25 pm

willyd123 wrote:
Tue Dec 04, 2018 2:49 pm
My job for the last 20 years is the person who negotiates on behalf of the company and I can tell you that if we knew we were increasing your cash compensation by 50%-55% we would not negotiate with you on any of the other components except maybe PTO but in that case, you say they are matching your current arrangement.
But if you were willing to offer that much money, surely that means that's how much the candidate is worth in the marketplace, and how much he/she could make at one of your competitors?

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Re: What to negotiate in offers

Post by MindBogler » Tue Dec 04, 2018 4:26 pm

A 50% pay bump is not something to scoff at and it will improve your financial situation dramatically. Tread very carefully in asking for more. Even when compensation has not been disclosed explicitly, do not be surprised if your new employer has some idea of what you currently make. Unless you are in largely commission-based position, this information is readily available by industry and geography in common tools like ADP. Your employer can discern a ballpark idea of what you currently make if they were inclined to do a little research. Don't make them curious.

For what it is worth, I recently received a similar increase in base compensation plus additional bonuses and incentives. And, while I think there could be some money left on the table, due to changing roles and responsibilities, I was inclined to accept and instead prove myself as a star performer for the company and then revisit with management in a year. This strategy has worked well for me in both of my previous roles where I've received 10-15% increases in each after the first year. In both cases the manager rewarded the raise without my asking.

Bruce T
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Re: What to negotiate in offers

Post by Bruce T » Tue Dec 04, 2018 6:01 pm

In above thread I have not seen references to negotiating on non-personal/non-compensation issues ... when I headed into a new leadership (C-Level) role in a relatively small company, I was as concerned about factors that related to alignment between personal abilities and interests and organizational success... and seeking both clarity and some flexibility in my area of responsibility. Not knowing your role, I can only guess that this might include clarity on P&L, staffing, area specific KPIs, etc. While much of this may not be the stuff of most employment offer letters, they are not at all uncommon to cover on appropriate topics in either a position description or even employment contract... you can presumably sort that based on the organization and your role-to-be in it... that' possibly more a discussion w/ the hiring manager than w/ HR.

Other factors that might make sense to include are performance/comp review intervals, an initial guaranteed period of employment (especially if a relo is involved), and other factors that don't cost the company cash but do contribute to some greater alignment of purpose. Similarly, if you have ambitions for further education, you might want to get clarity on tuition reimbursement ... and perhaps as important... time allowances ... to to pursue that.

It's possible that the company's employee handbook covers much of the more general expectations ... if you have not seen that, I think there is no harm in asking to see it or any other material you might be asked to execute/agree with as part of the employment process (e.g. if the company wants to put in a non-compete element, but you are not presently aware of that, such a process could flush that out as part of the total package rather than after you have made the leap to join them)... not all of us are fortunate to work in the California employee-friendly legal environment.

Best of luck!
Bruce

PS - based on the thread content above, I agree w/ most of the other posts to not get to nickle and diming (e.g. cell phone) on what sounds like a great offer... although if the role needs significant use of a car, that's a non-comp expense that they could use to sweeten things (if justified) without breaking their salary bands... be aware though that sometimes that comes at the cost of not being able to claim actual mileage, so a car allowance can put you in the red if inadequate vs. the actual driving needs... for reference, I had a 10K/year car allowance and probably only drove 1500 miles per year... so it was great for me.

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Re: What to negotiate in offers

Post by core4portfolio » Tue Dec 04, 2018 6:05 pm

Most of the checklist you have mentioned are designed at company level and not at employee level.
So I doubt they are negotiable at any companies. At the max, you can ask for sign on bonus if job allowed that.....
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HardHitter
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Re: What to negotiate in offers

Post by HardHitter » Thu Dec 06, 2018 8:34 am

Received the official offer and everything seems pretty standard but I did raise a few areas of which I thought was material to warrant a discussion with the recruiter to help guide me what I should take back to the company. I haven't made any proposals for solutions, but after reviewing below, what would you negotiate?

1. Company offers 25 PTO days. I currently receive 30 but have no write off from year-to-year and can continue to accrue until I reach accrual cap of 45 days.

2. Company offers 3 medical plans which consist of 2 HMO and 1 PPO. The PPO plan they offer is equivalent to current company plan however is $11K more annually. HMO plans would require a change of all our doctors as they are not covered. To me this is important as we just had our first kid and really like our pediatrician.

3. I didn't see anything offered from a pension perspective which I would be giving up annual interest (minimum of 5% on the cash in pension) + growing service contributions which currently is my salary * 3.25% (% increases with each tier based upon age + years at company. For example, my next % range is going to be 4.25% and will max out at 11.50%). These contributions are paid into the account in April.

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Re: What to negotiate in offers

Post by StopIroningShirts » Thu Dec 06, 2018 8:38 am

Thanks for posting the actual offer.

I'd go back to them about #2 - I would directly tell them you didn't expect the health insurance cost to be $11,000 higher than your current employer and that's a significant discount to the base you were being offered. Can they increase your offer by that amount to offest it?

PTO of 25 is generous, many places cap at 20.

Pensions are a dying breed in the private sector, not too much you can do there.

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Re: What to negotiate in offers

Post by HEDGEFUNDIE » Thu Dec 06, 2018 10:00 am

StopIroningShirts wrote:
Thu Dec 06, 2018 8:38 am
Thanks for posting the actual offer.

I'd go back to them about #2 - I would directly tell them you didn't expect the health insurance cost to be $11,000 higher than your current employer and that's a significant discount to the base you were being offered. Can they increase your offer by that amount to offest it?

PTO of 25 is generous, many places cap at 20.

Pensions are a dying breed in the private sector, not too much you can do there.
They can’t give you a pension but they can make it up in salary.

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Re: What to negotiate in offers

Post by HardHitter » Thu Dec 06, 2018 12:19 pm

HEDGEFUNDIE wrote:
Thu Dec 06, 2018 10:00 am
StopIroningShirts wrote:
Thu Dec 06, 2018 8:38 am
Thanks for posting the actual offer.

I'd go back to them about #2 - I would directly tell them you didn't expect the health insurance cost to be $11,000 higher than your current employer and that's a significant discount to the base you were being offered. Can they increase your offer by that amount to offest it?

PTO of 25 is generous, many places cap at 20.

Pensions are a dying breed in the private sector, not too much you can do there.
They can’t give you a pension but they can make it up in salary.
Exactly. The thing with the pension is that the amount contributed to it will continue to grow each year vs when I request them to make a salary adjustment, its a one time thing to make up what would be many more years at my current company. It'll be hard to determine a number on this but I think between the unexpected additional medical cost, PTO and pension loss, it is a reasonable request to ask for an adjustment.

Thoughts?

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Re: What to negotiate in offers

Post by CFOKevin » Thu Dec 06, 2018 4:58 pm

Leave out the PTO (seems minor) and put a monetary value on the pension loss (use 5% of your current salary), add in the health insurance premium difference (but double check as that seems VERY high for a difference for established companies).

Let them know that between those two factors, they are $XX thousands below your current situation.

Also, you mentioned there's a recruiter involved. Keep in mind they are working for Newco. If you've told the recruiter about your current comp, Newco knows it, too. If that's the case, just pick a number and give it to the recruiter to go after. say something like "tell them I'll accept an offer that is $X higher in base salary" and let them have the conversation for you.

Good Luck,

Kevin

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Re: What to negotiate in offers

Post by N10sive » Thu Dec 06, 2018 6:27 pm

HardHitter wrote:
Thu Dec 06, 2018 8:34 am
2. Company offers 3 medical plans which consist of 2 HMO and 1 PPO. The PPO plan they offer is equivalent to current company plan however is $11K more annually. HMO plans would require a change of all our doctors as they are not covered. To me this is important as we just had our first kid and really like our pediatrician.

3. I didn't see anything offered from a pension perspective which I would be giving up annual interest (minimum of 5% on the cash in pension) + growing service contributions which currently is my salary * 3.25% (% increases with each tier based upon age + years at company. For example, my next % range is going to be 4.25% and will max out at 11.50%). These contributions are paid into the account in April.
I think these two points you only have a place to argue, the PTO is quite generous in my opinion. My question would be your offer, how much does it align with current market salary? Have you done that research? As I pointed out in my first post, perhaps they have a higher salary base (than you are currently seeing, but I know you said it was a step up in position) because the benefits were poorer. 11k family health insurance is steep in my opinion.

The pension is a lot harder to account for. Since you know all the details I would look at how much you can contribute to your own retirement savings with this increase in salary(It was 48% without knowing bonuses, what is it now with bonus structure and taking into the 11k health payments). If you can save a lot more per year you can still end up better in the long run.

HardHitter
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Re: What to negotiate in offers

Post by HardHitter » Thu Dec 06, 2018 9:25 pm

CFOKevin wrote:
Thu Dec 06, 2018 4:58 pm
Leave out the PTO (seems minor) and put a monetary value on the pension loss (use 5% of your current salary), add in the health insurance premium difference (but double check as that seems VERY high for a difference for established companies).

Let them know that between those two factors, they are $XX thousands below your current situation.

Also, you mentioned there's a recruiter involved. Keep in mind they are working for Newco. If you've told the recruiter about your current comp, Newco knows it, too. If that's the case, just pick a number and give it to the recruiter to go after. say something like "tell them I'll accept an offer that is $X higher in base salary" and let them have the conversation for you.

Good Luck,

Kevin
I've made mention to the PTO, but just more as a general observation as there are some state laws around carry-over and accrual caps.

The key items are the medical and the pension. For the medical, I feel as though that should be matched to cover the costs, no negotiation. It is material enough to cut into the overall offer. I was surprised by the additional cost as well, so I've double checked my math and ran it by the recruiter [(newco cost - curco cost) * 26 paychecks a year] = $11K

For the pension, I've given them the details in how contributions are calculated, it is fairly significant as one of the contributions is a % of my compensation, peaking at 11%. At a couple hundred thousand dollar salary, it is material.

It is against state law to ask current salary and I have no reason to disclose it but I'm sure they have a general sense of where I am through market research.

HardHitter
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Re: What to negotiate in offers

Post by HardHitter » Thu Dec 06, 2018 9:31 pm

N10sive wrote:
Thu Dec 06, 2018 6:27 pm
HardHitter wrote:
Thu Dec 06, 2018 8:34 am
2. Company offers 3 medical plans which consist of 2 HMO and 1 PPO. The PPO plan they offer is equivalent to current company plan however is $11K more annually. HMO plans would require a change of all our doctors as they are not covered. To me this is important as we just had our first kid and really like our pediatrician.

3. I didn't see anything offered from a pension perspective which I would be giving up annual interest (minimum of 5% on the cash in pension) + growing service contributions which currently is my salary * 3.25% (% increases with each tier based upon age + years at company. For example, my next % range is going to be 4.25% and will max out at 11.50%). These contributions are paid into the account in April.
I think these two points you only have a place to argue, the PTO is quite generous in my opinion. My question would be your offer, how much does it align with current market salary? Have you done that research? As I pointed out in my first post, perhaps they have a higher salary base (than you are currently seeing, but I know you said it was a step up in position) because the benefits were poorer. 11k family health insurance is steep in my opinion.

The pension is a lot harder to account for. Since you know all the details I would look at how much you can contribute to your own retirement savings with this increase in salary(It was 48% without knowing bonuses, what is it now with bonus structure and taking into the 11k health payments). If you can save a lot more per year you can still end up better in the long run.
From my research, their offer is about $50K below the start of the current market salary band. Only reason I can see for this is due to comparing a megacorp vs small company and the upside of career progression here vs megacorp.

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Re: What to negotiate in offers

Post by HardHitter » Fri Dec 14, 2018 5:44 am

Bringing this thread to closure. I accepted the job and negotiated an additional $30K from initial offer and have increased my base salary by 59% from current. I have a nice bonus multiplier which can drastically increase total compensation even further based upon performance. Appreciate everyone's tips/feedback!

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Re: What to negotiate in offers

Post by jharkin » Fri Dec 14, 2018 8:53 am

8foot7 wrote:
Tue Dec 04, 2018 8:12 am
Pigs get fat. Hogs get slaughtered. You’re looking at a 55% raise. Take it and be grateful, or reject it. You don’t need a checklist man.
+1

I just made a big mid career (20 years in) change to a lateral but related role. I got a whopping 10% pay raise + double the 401k match I had previously and better fringe benefits. I think I would have fainted on the phone if they offered me 50%.

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