How should I approach negotiating my Offer Letter?

We’re starting our new miniseries to mark our mission expansion from understanding contracts to negotiating contracts. Our last post skimmed the surface discussing approaches to negotiating your very first job offer out of college. Today, we’re going one step further and covering techniques on negotiating all offer letters. We recommend our “What should I look out for in my Offer Letter” post as a pre-read to to understand parsing the content as this post builds on its content with negotiation techniques.

1. Identify your leverage

   You’ve been extended an offer! Congratulations, that means this company wants you. Identifying your leverage means putting yourself in this company’s shoes and weighing how much they need you vs. how much you need them. Take a look at some example questions you might ask yourself:

   1. Do they have other options?

   2. Do I have other options?

   3. How well do I fit the role?

   4. How difficult is this role for them to fill?

   5. How time-sensitive is this role for them?

   For new grads, their prospective employer with a healthy pipeline across colleges each year may have many options that make it relatively easy to fill the role. As a result, new grads typically gain most of their leverage from #2 and #3, having multiple competing offers and being great at interviewing. For a seasoned executive, they may have very specific skillsets that are difficult to find, which means they may build leverage from all 5 questions. It’s part art and part science, but the important piece is putting yourself in the shoes of the other party and understanding where they stand.

   
   

2. Create time for negotiating

   Most Offer Letters will have an expiry date, the infamous “exploding offer”. This expiry date can feel too soon and is the first item to negotiate. Approaching the negotiation, similar to identifying your leverage, requires you to understand and articulate timelines from both sides. Understand the timelines your recruiter may be under and ask yourself how much time you need to fully consider the offer. Companies are more receptive if you have specific action items that help you have a higher chance of accepting their offers, such as:

   1. “Would you be open to giving me a few days to read all the referenced documents in the offer letter and then set up a follow-up call where we can review my questions?”

   2. “To fully consider this offer, I’d love to learn more about the team I’d be working with, could you please set up some time to speak with my potential manager and/or team mates?”

      
      

3. Value the total package

   Everyone is familiar with salary and the broader concept of total compensation. However, to quote Harvard Business Review, “negotiating a job offer” is not the same as “negotiating a salary”. Calculate and communicate to your prospective employer your understanding of the total package, both the areas that exceed your expectations and the areas that fall short. We've included the major categories with examples below:

   1. Cash - Base salary and applicable signing and performance-based bonuses

   2. Equity - Options, RSUs, RSAs, and more

   3. Growth Trajectory - Promotion schedule, internal mobility, project scope

   4. Healthcare - Coverage, who’s paying for the premium, and how dependents are handled

   5. Financial Planning - 401(k) support and matching percentage

   6. Paid Time Off - Personal, sick, bereavement, parental, sabbatical

   7. Stipends - Wellness, continued learning, commuting, remote work equipment

   8. Additional Benefits - Meals, discount programs, childcare

   9. Special Requirements - Business travel, evening and weekend work

      
      

4. Summarize and prioritize your points of negotiation

   It’s generally bad practice to negotiate one item and subsequently surprise a company with additional items. After taking time to review your entire offer letter, summarize the list of items you’d like changes to, why you have the leverage for those changes, and prioritize them:

   

   Be ready to adjust your requests as you learn about the incentives of who you’re speaking to and what they’re able to make decisions on. For example, your recruiter may not be able to adjust your salary, but a successful conversation with your potential manager might help them champion the bump you’re requesting. Speaking with HR’s Benefits Specialist may explain what’s up for discussion vs. a non-starter against company policy.

Negotiating has long been a critical yet difficult part of the human <> contract workflow, one with profound implications yet relatively murky steps to success. In this miniseries, we hope to break down each piece of paperwork you receive so that you not only understand what’s in it, but also how to approach changing what you’re signing up to benefit you, and ultimately benefit the work you’ll output for your prospective employer.

For advocacy and beyond!
The Ask Ginkgo Team