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How Employers Make Final Salary Negotiation Decisions
There are seven main variables that influence how employers make final salary negotiation decisions:
- The budget
- If the company has standardized compensation practices
- Your quantified proven track record of success
- How bad the company wants you
- If you come across likable
- How many people need to sign off on the final offer
- If you have competing offers and their value
Each of these variables influence the final salary negotiation offer you receive. Let’s dive into each one.
The Budget
Typically when an employee is hired they are offered a base salary plus benefits (e.g. health insurance, 401k, etc.), job perks (e.g. remote work stipend), and other financial perks such as stock options or profit sharing. When you are offered a job the cost to your employer is your base salary plus an average of 33%+ of your base salary to cover the cost of your benefits and perks. The size of the company that is hiring you plus the fluid budget they have for base salary offers will impact your final offer.
Standardized Processes
The size of a company will greatly determine if it has standardized compensation practices. For example, large publicly traded companies have well-defined compensation practices that tend to include capped salary ranges for each position regardless of experience and track record. New venture funded emerging startups are the opposite. They tend to have little to no standardized compensation practices and are encouraged by investors to “do what it takes” to attract and recruit top talent. Potential new hires have more wiggle room to negotiate with a fast growing startup than they do with an established company.
Quantified Track Record Of Success
How you present your quantified track record of success and relate that success to the duties and responsibilities to the person(s) you’re negotiating with will greatly influence the offer you receive.
An employer is willing to offer more to a person that can clearly communicate how their experience will immediately benefit the company and reduce costs. For example, for mid-level to senior positions it takes an average of nine months to fully onboard a new hire and costs up to three-fourths of the person’s salary to train them. If you can present examples that clearly communicate why you will not need the typical amount of training a new hire does in order to start producing outcomes for the company then you give yourself multiple points of leverage to negotiate higher pay.
How Bad the Company Wants You
Employers will pay more for top talent. They know great employees have options. To be attractive to the best potential hires they will pay more to have those skills and experiences on their team.
If You Come Across As Likable
Research has shown that people tend to find a message more appealing and persuasive when it is delivered by someone who is likable. How likable you are throughout the interview and negotiation process will impact how much the employer is willing to negotiate (in your favor).
How Many People Need to Sign Off On The Final Offer
The more people that have to sign off on a final offer the less favorable it will be to you. This is because the person writing the offer doesn’t want to have to explain, validate, and/or negotiate the offer they want to make with two, three, or four other people. When multiple people have to sign off on a final job offer it is likely to be middle of the road and less competitive.
If You Have Competing Offers
Employers will be influenced to make a competitive job offer when you present competing job offers. In order to attract and hire you they know they have to “out bid” the competitor. If the company has the budget they will do this. If they don’t they will let you know and present their best offer.
Salary Negotiation Waiting Game
Now that you have insight on variables that contribute to how an employer develops their offer let’s dive into the salary negotiation waiting game.
How many rounds of salary negotiation?
The average salary negotiation has one to three rounds of negotiation but keep in mind there is no limit to the number of salary negotiation rounds there can be. There is however a standard timeframe to open and conclude a salary negotiation. On average successful salary negotiations take one to two weeks. Salary negotiations that last longer than two weeks can indicate that the candidate is asking for too much based on their skills and experience, the company doesn’t have the budget, the company doesn’t have the budget but is developing creative non-monetary alternatives, and/or the company has realized that the person does not fit the profile of an employee they would like to hire.
What makes a salary negotiation take long?
A salary negotiation can be drawn out by negotiating over email. When you negotiate over email you’ll likely experience:
- HR not responding after salary negotiation
- Silence after salary negotiation
These things can be very frustrating and nerve-racking. Unfortunately, they are part of the process. When you feel like you’re getting the silent treatment it’s important not to rush the process no matter how uncomfortable you may feel. Rushing the process can result in negotiating against yourself.
One of the best things you can do to navigate the salary negotiation waiting game is prepare yourself to be comfortable with being uncomfortable.
HR Not Responding After Salary Negotiation
It can take several business days to receive a response after a salary negotiation. If you experience HR not responding 10 business days after a salary negotiation it can signal that the salary negotiation is not going to be successful. Before you worry and jump to the conclusion that the silence after salary negotiation is a sign your negotiation is failing it’s important to understand that salary negotiations can take long because employers:
- Want to ensure they are making a fair offer and that the salary meets the budget,
- May be waiting on responses from other candidates,
- Are developing a creative compensation offer and want to see if you’ll be willing to negotiate other benefits, such as vacation days or flexible work arrangements.
Salary Negotiation Waiting Game (FAQs)
How long should you wait to negotiate salary?
During the interview process there is a right time and wrong time to negotiate salary. You want to wait to negotiate salary after you’ve learned the ins and outs of the job’s duties and responsibilities and had an opportunity to research what the market is paying for the job title, the same duties and responsibilities, and for someone with your skills and experience. It is only when you are properly informed and at the right stage of the interview process that you should negotiate salary.
Will negotiating salary backfire?
Negotiating salary will not backfire if you present yourself as likable and use data to support your salary negotiations. A salary negotiation can backfire if you are demanding, rude, entitled, and ask for more than your skills and experience in your job market/ location warrant.
What happens if you ask for too much salary?
When you ask for too much salary you will receive a counter offer or have an offer rescinded because the employer is concerned that you will be unhappy if you accept an offer much lower than your ask. To avoid asking for too much salary make sure to research what the market is paying for the job title, the duties and responsibilities, and for someone in your location with your skills, experience, and track record of proven success.
How long to negotiate job offer?
The typical salary negotiation will take 5 – 10 business days (approximately 2 weeks). Variables that play into how long a salary negotiation takes include: how much you ask for, the company’s budget, if the company has standardized compensation practices, your quantified proven track record of success, how bad the company wants you, if you come across as likable and how much the hiring manager is willing to work with you, how many people need to sign off on the final offer, and if you have competing offers.
How long does it take to hear back from salary negotiation?
You will typically hear back about your salary negotiation within 10 business days or less. The amount of time it takes to hear back will be influenced by how busy the person you are negotiating with is as well as how many people need to sign off on the final offer.
Conclusion
The salary negotiation waiting game can be a long and frustrating process. By understanding the variables that contribute to an employer’s offer, you can put yourself in a better position to negotiate a competitive salary. Keep in mind that most salary negotiations will go for one to three rounds, so use your personal track record of success and market data to ask for what you want.
If negotiations go silent after your initial offer, don’t worry. Wait for a response. The employer has invested time and money into recruiting you. You’ll hear from them when they’ve run their process.
Do you have any questions about the salary negotiation waiting game that aren’t covered in this article? Drop them in the comments!
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