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Monday, August 25, 2014

Advice: Negotiate Your Starting Salary - Part 3

Monday, August 25, 2014 Posted by Unknown , No comments

First of all, if you've made it this far and have read the other two posts about calculating your total compensation and how to negotiate rationally, then thanks for reading, and I hope you found those two posts helpful!

With the last post in this series, I want to address the final question that comes up after you've heard their first offer, you've presented your reasoning for a bigger starting salary, and they've come back to you with an updated number. That question is of course:

When do I accept and when do I reject?

Unlike the other two posts, I won't be able to give you a best practice for when you should accept and when you should reject an offer. Reason being, every situation, every company, and every person is unique. However, here are a few things I always tell people to consider when debating this really important question:
  1. Will your life significantly change if you accept the new salary? Looking at the example of Jack, if his potential new employer came back with a salary of $65k + 500 shares of restricted stock valued at $100/share that would vest over 4 years, then that would be an offer of roughly $70k in his first year not counting for any other perks the new company might have to offer. If money is the only thing that informs Jack's decision, then a 32% increase from his old salary of $52.9k is probably a big enough jump that I would recommend taking the offer. 
  2. Will your life significantly change if you work for the new company? However, what if Jack's new company is in a huge transition period and will require him to work 10-12 hours days for the next 6 months. In that case, you have to do the math to determine if the sacrifice in work-life balance is worth the large increase in salary. If you're a person that likes to get in at 9:30 and leave at 5 every day, then maybe a 30% bump in salary isn't enough. For this person, it might make sense to turn down the offer. In contrast, if you're a person that loves to work and you're already working 10-12 hour days, then it becomes very easy to accept the offer.
  3. Most importantly, will your opportunity for growth significantly change if you work for the new company? After you've received your final offer, this is the most important thing to consider because, if your current company offers more opportunities for growth, then I would advise against taking a new job. Reason being, our careers are for our development and growth. We should invest time in our jobs not only to pay our rent but also to learn new skills and grows as people. Whether that growth potential comes from an especially challenging job or a group of incredibly intelligent coworkers, you should ALWAYS consider the growth potential at a new company when deciding whether or not to take an offer. If you don't, you may end up making a lot more money but feel drained or bored every day you go to work, which usually means you'll be looking for another job in no time at all.
In the end, only you will be able to know when a new job offer is financially, emotionally, and mentally satisfactory, and it's very rare to find a company or job that fulfills all three of these in abundance. However, if you can find a company that can give you two out of three, then I would say that's a company worth considering.


Best of luck in your negotiations and job hunts, and if you have any questions feel free to leave me a comment in any of the posts or reach out to me using the Contact page.