Is Salary Negotiable?

by EngineerSalary Staff

Yes. Everything is negotiable, we’re told. The fact is, not everything is totally negotiable.

Employers usually have more salary flexibility than they indicate in the interviewing process, but it can vary significantly based on their industry economics and the structured salary guidelines within the company.

Keep in mind that no company will invite you to interview, and say “our salary for this position is between $72,000 and $100,000. How do you feel about that?” It’s not going to happen. They want to know how you are compensated, but will not discuss what they intend to pay until an offer is prepared. This applies to 99.5% of U.S. companies.

If they can't afford to compete with your current salary, they will not invite you to interview.

Once you receive the offer, it is reasonable to ask the employer, "How much flexibility do you have on salary?" if you feel the offer is low (your perception, not theirs). You may be satisfied with the offer as presented, but have questions about other items that normally are negotiable. These usually consist of start date, sign-on or year-end bonus, vacation, benefits package, relocation allowance, house hunting trips and temporary living expenses.

For positions under $69,000, 12 percent is likely as high as you can go (based on a national average of 1,226 medium and large companies). Some companies may have less flexibility than others. Some hide behind salary parity to justify low offers. When negotiating a more senior position, the company can usually sweeten the deal… if not with dollars; they may be able to add perqs that will bump up the initial offer. (Note: Some companies rather front load higher compensation into an increased first year sign-on bonus than show it as salary. This does not roll over in the following years. If your objective is a higher starting salary, don't accept it in the form of a sign-on bonus.)

Employers will be far more flexible on salary with experienced and well qualified engineers, because they are difficult to find. If the position has been open for a few months, they will be extremely motivated to offer a number that gets accepted. Many times, they have already been turned down by others – and understand they must increase what they feel is equitable, because there are just no takers at the current salary level.

If an employer offers you a salary slightly lower than your expectations, you owe it to yourself to evaluate the entire offer before making a final decision. If you decide to negotiate the offer, you must provide supporting evidence to make a case for why you are worth more. For example:

"As a Software Engineer for Company X, I initiated a methodology and procedures that saved over $200,000... and delivered a completed product, accepted by the customer, under budget and on time. I have proven my skills and capabilities… and feel particularly well prepared to be successful in contributing to Project Y immediately. I have the experience gained at Company X to make a significant impact on Project Y.

I’m ready to accept the offer if we can modify it to be acceptable to both of us."

The key is: “I’m ready to accept”. When the company believes you are ready to accept their offer with some reasonable adjustments, it is likely that the hiring manager will go to bat for you… because you are qualified, liked, motivated and available. Managers want to fill positions, and usually have the authority to modify company policy. If you work with the hiring manager, chances are you can reach a mutually acceptable number that he/she can authorize (or push through HR resulting in a revised offer).

Engage in negotiations on issues that are important to you.

Now is not the time to "nickel and dime" the potential employer just because your salary expectations were not met initially. This tactic won’t work. Identify the few key items you wish to negotiate; once the points are resolved, make your decision. Don't try to enter into additional negotiations for other items after your key issues are successfully addressed -- to your satisfaction. This is bad form, and the company could withdraw the offer (and probably should). They want closure, you want a decent compensation and benefits package.

If the company feels they have presented a fair offer (and you don’t), ask them how they came to the final amount. It’s an acceptable question, and will help you to better understand their reasoning. It’s doubtful, but they may have overlooked something relative to your previous experience, they may not be aware that competitors are being more aggressive, the market in general is demanding higher compensation -- or they are just not industry competitive.

Understanding their process will help you make an informed decision, and fine tune the negotiating process.

Some of the other factors to consider (which may already be a part of the benefits package, and may be negotiable) are: stock options (if any), sign-on bonus, tuition reimbursement, relocation assistance, temporary living expenses, performance review frequency and additional vacation. Finding a company that meets your preference in geographic location is always a huge plus when weighing an offer. Many times, the best position will come with some minor tradeoffs.

If the company is located in a high cost of living area, and their offer translates to less disposable income than you have now, make sure they understand this (they should know it already). Make it clear that you can't accept an offer that would negatively impact your family's current standard of living. They should adjust the offer to overcome this (it should have been done in the initial offer package). Cite examples that you have identified through work with local realtors and online research. Make their job easier by applying justification for an enhanced offer. Help them understand how you arrived at the revised salary requirements by providing documentation from sources they can check. Walk them through your investigative process, so that understand that your demands are not arbitrary.

Don't be afraid to walk away from a mediocre offer. "I would like to accept your offer, because the position is exactly what I'm looking for. Unfortunately, the salary precludes me from accepting. I know I would be successful, but unless we can overcome this salary impediment, I can't justify the move." This is a professional, to the point statement that can be used as the final negotiating volley. If you feel you have exhausted all of your options (negotiations are ended), pull out the stops... they don't want to lose you.

If you decline an offer, leave the door open (if you are still interested). Many companies will quickly rethink their decision if you are the best candidate.

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