Advice for negotiating new hire compensation

Most organizations in the U.S. today have stringent pay ranges or guidelines for negotiating salaries. In many cases, these strict criteria stem from limited financial resources (often experienced by small businesses). They can also be found within government entities, where pay scales are determined by level and job grade.

Since an employee’s starting wage will be the foundation for pay increases and raises throughout the new hire’s employment at the organization, it’s no surprise that it is often one of the most crucial pieces of a candidate’s decision to accept a job offer. And with less frequent opportunities for pay increases during an employee’s tenure, negotiating an agreeable starting salary is becoming even more common and important.

Due to economic conditions and changes in company spending and revenue, many employers that previously automatically awarded hefty pay raises to new employees that demonstrated their competency are no longer doing so.

In fact, most companies do not offer merit increases. Instead they favor annual increases or nominal raises based on cost of living, the company’s financial performance, or internal expenses such as rising health costs. When an existing employee does land a merit-based pay increase, it is in smaller increments than workers once received.

Chances for large pay increases typically only come with promotional opportunities where the candidate is given a new job at a higher level with more advanced responsibilities. These raises are calculated as a percentage of an employee’s base salary. As a result, employees at smaller organizations with more condensed chains of command typically have fewer growth opportunities and often find themselves in a job lock.

In today’s business environment, negotiating a higher salary in a new position is an employee’s best shot at maximizing his or her earning potential. Here are three ways to get the salary you deserve before you start.

  1. Know your value and do your homework. What are competitors paying equally qualified workers in similar roles? Consider the size of the company, the number of employees, and the industry. Use salary data resources, such as Job Search Intelligence, that have free and accurate salary calculators.

  2. Don’t be the first to disclose a number. Professional recruiters are usually very comfortable discussing salary and will likely be the first to broach the topic. If you are not ready to discuss compensation, tell the recruiter that you would like to know more about the position or ask what he or she thinks the position is worth. If you are not comfortable delaying your response, provide a range. That way you can answer the recruiter’s question while also leaving room for adjustments as you learn more about the role.

  3. Prepare a counter offer. Determine the salary that you are willing to accept and do not accept the first offer if it doesn’t meet your requirements. Many times employers will have pockets of negotiating dollars available that give them the financial ability to attract the best talent. Do not assume that the first offer is their best offer and be prepared to counter with what you feel is reasonable and within your salary goals.


This post was written by Jessica Bacher. With extensive experience as a recruiting operations manager, Jessica has provided strategic planning and consultation to leading health care, call center, retail, telecommunications and government clients worldwide, and has led complex initiatives for Fortune 500 organizations. In 2010 and 2011, the Electronic Recruiting Exchange, the largest recruiting intelligence community, recognized her branding and digital solutions work, and Jessica was awarded the Creative Excellence Award for her work in employment branding for Latin America. Learn more about Jessica.

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