Carnegie Mellon

Negotiating a Job Offer

STEP 1 : PREPARATION

1. Before you can assess a job offer, you must make sure you have information about the market. Important research you should do:
   • Identify salary averages for your field and in your geographic area of interest.
   • Know what average salaries your peers received (i.e. those of Carnegie Mellon graduates with similar experiences).
   • Identify norms in your field as far as which things you can negotiate, and which things are non-negotiable such as health insurance or location.
   Where can you find this information?: See the end of this career brief for resources. You can also network with your Career Consultant, faculty, internship supervisors, mentors, etc.
2. Identify and rank your value issues. This will help you remember that an offer is not just about salary, but it is also about what you value in a position. Issues may include:
   • Benefits
   • Challenge
   • Competition
   • Flexibility
   • Helping Others
   • Independence
   • Location
   • Low Stress Level
   • Making Decisions
   • Mental Stimulation
   • Personal Growth
   • Physical Work Environment
   • Prestige
   • Public Contact
   • Recognition
   • Responsibility
   • Salary
   • Stability
   • Supervisory Style
   • Teamwork
   • Variety
3. Decide on the minimum amount of compensation that will make you satisfied - make it realistic with the type of job offered. Establish a budget and don't neglect to account for taxes taken out of your pay. There is no point in accepting an offer if you think you'll be unsatisfied and want to look for another job in the near future. If an employer refuses to meet or exceed this amount, it is to your advantage to keep looking.

STEP TWO: KNOW THE EMPLOYER'S COMPENSATION GUIDELINES

How does a job offer process develop? Although there are many ways that employers decide on the initial offer, they are typically presented from one of three different viewpoints. Companies fall into one of these three categories depending upon their attitude about salary and negotiation. Here are those various philosophies and what the difference might mean to you:

1. Fixed Offer: This type of company will tell you that they carefully research the job market and they make a very fair and firm offer. You can negotiate all you want, but it won't do you any good. They operate on a take it or leave it basis so you may not want to waste your time negotiating.
2. Pay-Grade System: This is a system in which a salary range has been set and you will be paid within this range based on your experience and the duties associated with the job. However, you can often negotiate within the salary range. The pay-grade system is the most common compensation system encountered.
3. The Negotiator: This type of system is rare because most organizations work within a structure. In this framework, the employer will have the authority to raise or lower your salary without going through bureaucratic red tape. You can definitely negotiate with this type of organization.

STEP THREE: SALARY AND BENEFIT NEGOTIATION

If an employer makes an offer that is below your expectation, you don't want to offend them so you might start the conversation by asking what the benefits include. To proceed, you might want to use one of the following approaches to begin the negotiation process:

Approach 1: "I am very interested in the position, but I would like to discuss the salary you are offering."

Approach 2: "I am very interested in your company. Thank you for the job offer. I wanted to know if the salary is negotiable?"

When using either approach, be certain to support your case by stating your skills, the average salary range for your level of experience in your field, and the average salaries for Carnegie Mellon graduates in your field. It is best to let the employer respond and then continue the discussion from his/her lead.

Based on an employer's compensation guidelines, you may not be able to negotiate a higher salary. However, you may be able to increase your compensation in benefits. Negotiable areas often include: vacation time (it's often increased for more senior employees), educational reimbursement, and salary review (you might negotiate a salary review after three months rather than six months or a year). Remember, you may be negotiating with the person who will be your supervisor. Stay polite. Try to make it a win-win situation.

STEP FOUR: ASSESSING THE JOB OFFER

Consider the pros and the cons of the offer. It may help to create a chart. A chart may also be helpful if you have had more than one offer and you want to compare and contrast the merits of each offer.

Here is a sample:

FACTOR	OFFER A	OFFER B	OFFER C
Company Reputation/Stability
Co-workers
Health Insurance
Job Responsibilities
Location
Overtime
Paid Vacation
Pension/Retirement
Salary
Signing Bonus
Stock Options
Supervisor
Training/Professional Development
Travel
Tuition Reimbursement

STEP FIVE: GET IT IN WRITING!

It would be nice if everything discussed would actually occur, but unfortunately it doesn't always happen that way. To avoid problems in the future, ask for a letter of employment which states all the employment conditions agreed upon, (i.e. salary and benefits as well as a thorough job description). This way, if there is confusion at a later date, you will have a written document to refer to stating the conditions under which you were hired. This document is especially important if the conditions of your employment differ from normal company policies.

A FINAL WORD

Keep in mind that if you decide to negotiate, your job offer will not be rescinded by the employer - even if the employer decides not to negotiate. Also, if a position is acceptable to you as it is offered, you should not feel like you must negotiate.

SALARY NEGOTIATION STRATEGIES WEBSITES

Carnegie Mellon Salary Survey - includes maximum, minimum, mean and median salary information from Carnegie Mellon graduates, listed by major and degree
http://www.studentaffairs.cmu.edu/career/student/salary.html

Occupational Outlook Handbook - provides career and salary information for approximately 250 occupations
http://www.bls.gov/oco/

Salaries and Profiles - includes an industry-by-industry look at salaries from the National Business Employment Weekly - register and search for the page of your choice
http://public.wsj.com/

Areas Include:

Accountants Advertising Attorneys Banking Brokers College Administrators Computer Industry Consultants Engineers Entertainment Industry Finance Executives

Health-Care Industry Hospitality Managers Human Resources Insurance Professionals Internet Professionals Librarians Logistics Professionals Managers Marketing Mutual-Fund Professionals Non-Profits

Plant and Facilities Engineers Public Relations Real Estate Retail Executives Sales Service Industries Senior Executives Supermarket Industry Telecommunications Telemarketing Professionals Utilities

Quintessential Careers - provides a variety of resources and links for job seekers including resources on the web about salary negotiation
http://www.quintcareers.com/salary_negotiation.html

JobSmart - provides links to over 300 salary surveys and tips on salary negotiation
http://jobsmart.org/tools/salary/index.htm

Areas Include:

Accounting Advertising Computer Fields Consulting/Contracting Economics Education Engineering Entertainment Finance

Government Graphic Art Health-Care Human Resources Insurance Management Marketing & Sales Mathematics Media

Non-Profit Printing Psychology Public Relations Science & Biotechnology Social Work Technical Writers Telecommunications Training

Career Zone - salary negotiation resources
http://ww1.joboptions.com/careertools/salary_info.jsp?session>id=0&app_id=0

Job Smart Salary Negotiation Strategies - lists web sources and books on salary negotiation; includes links to articles and a salary relocation calculator
http://www.jobsmart.org/tools/salary/index.htm

The Wall Street Journal Interactive Edition - salary negotiation tips; click on "Salary and Hiring Info"
http://careers.wsj.com