How to Make Effective Employment Counteroffers
Updated November 18, 2022
One of the last stages in a job search involves a company sending you a job offer when they're interested in hiring you. You don't need to accept the offer right away, and you can present a counteroffer. Understanding what this type of offer is and how to negotiate during the process can help you earn your desired salary and employment terms. In this article, we discuss the definition of this type of offer, explain how the process works, and share 11 steps to make an effective employment counter during your negotiations.
What are counteroffers?
Counteroffers, or counterproposals, are a response to an initial offer. A counteroffer signifies the rejection of the original proposal and outlines the new proposed terms and conditions of the interaction. Many situations require these offers, including business deals, real estate transactions and employment opportunities. For example, you would counter with an offer when a company has presented you with an employment contract specific to a job offer and you wish to negotiate the terms of the position, such as salary, benefits or work environment. You may present your offer verbally or through written means, such as a letter or email.
How does the process work?
When a company is interested in hiring you, they present you with a job offer. Typically, the offer comes as an email or a letter. The company outlines the terms and conditions of employment within the proposal, including salary, employment benefits, vacation time and working hours. Once you have reviewed the job offer, you then have three choices. You can accept the offer as it is, reject it altogether or present a counter to the employer.
The counteroffer expresses your interest in the position and thanks the company for its offer. You then outline your request with justification or supporting evidence. The company then reviews your counter and can accept, decline or continue to negotiate employment terms until you reach a mutual agreement.
How to make employment counteroffers
When making a counterproposal on the terms of a job opportunity, follow these steps to ensure you take careful consideration during your negotiations:
1. Ask for time to review the offer and make your decision
When receiving a job offer from a potential employer, you will first want to express your gratitude and excitement for the opportunity. Sharing your enthusiasm sets the tone for the rest of the negotiation process, letting the company know you are interested in the position. Then, you'll want to ask them for time to review the offer and make your decision. Often, the organization will provide you with a timeline for your decision. If not, you'll want to respect their time and get back to them within two to three days. During this time, you will review the offer, conduct research and prepare your counterproposal.
Related: All About Job Offer Letters
2. Read through the employment offer
Once you've requested time to review the offer and make your decision, the next step is to read through the employment offer in its entirety. To properly evaluate the terms and conditions of the job, you need to understand what the company is presenting. Take time when you can focus your attention on the offer and read through the entire document. Highlight any areas you are unsure about and jot down questions you have.
3. Complete research on comparable jobs and industry standards
If you've decided to present a counteroffer to the employer, you now need to research the salary range of comparable jobs within your industry. First, you'll want to determine a basic salary range and other employment terms you feel comfortable with, such as standards of employee benefits, vacation and personal time off and working conditions. When researching comparable salaries, you can ask reliable connections in the industry for their insights or use a resource like Indeed's Salary Calculator to find current information. Other things to consider when researching comparable salary expectations are your geographic location, education and work experience and your area's cost of living.
4. Assess your expertise and qualifications
Now that you clearly understand the industry standards and average salary range, it's time to assess your expertise and qualifications. Beyond the national average salary, you can show why your unique skills and experience require a specific wage. Consider what makes you stand out as an employee and the value you bring to the organization. You can outline how your knowledge and experience will benefit the company compared to other candidates. After completing your research, you also understand the cost of living and industry averages in your geographic location to help your counter further.
Related: How to Perform a Self-Assessment
5. Evaluate the initial offer
You've done your research and understand the industry standards for your position. Next, it's time to evaluate the company's initial employment offer. If the salary offer isn't within your desired range, be sure to review the employee benefits package and other perks. Sometimes, you may find that a company compensates for a lower salary by offering hefty benefits. If both the compensation and benefits are less than hoped for compared to your industry research, you can choose to negotiate for either or both.
Related: Assessing a Job Offer
6. Prepare specifics to negotiate
When preparing your counterproposal, provide a specific salary amount rather than a range. You can counter with an amount slightly higher than your desired outcome. This can help you achieve your desired salary and allow some downward movement if the employer negotiates based on your counter. Use your industry research and the assessment of your qualifications to determine a reasonable salary or benefits request. You have the advantage of knowing the hiring manager is interested in you by presenting you with an initial offer.
7. Present your counteroffer
Depending on the situation, you can submit it verbally by meeting with the hiring manager in person or through a videoconference. Alternatively, you can submit it in writing, either through an email or a formal letter.
Begin your counterproposal by reiterating your interest in the company and position. Then, highlight your unique expertise and qualifications, providing insight into the value you bring to the job. Show your professionalism by thanking them for their offer and that you respectfully believe your desired salary or benefits package is a better match based on your specific reasons. Finally, this is your opportunity to state your case, citing your research as evidence to back up your counter.
8. Prepare for the employer's response
Once you have submitted your counter to the original offer, you can begin preparing for the employer's response. You'll have time to plan your next steps if you are negotiating through email while they read and think about your request. If you are presenting your offer in person or verbally, you may need to prepare for their response before the meeting, as the hiring manager may continue to negotiate during the interaction. Preparing for the employer's response means identifying what you want to accept, what you plan to negotiate and when you will decline the opportunity.
For example, a company may not move on salary but can negotiate on better employee benefits. Another potential outcome is that the company is unwilling to negotiate and that their initial offer stands. Your response varies depending on your situation at the time. For example, if you're currently unemployed, you may choose to take the position, knowing that the salary and benefits are less than ideal. Alternatively, if you're currently employed, you may take more risks regarding negotiation. Think about all most likely outcomes and prepare as best you can for the next steps.
9. Continue to negotiate as needed
If the hiring manager negotiates with your counter-proposal, you'll need to continue negotiations back and forth until you reach a mutual agreement. During this process, you want to provide evidence to justify your specific requests. For example, you can show research suggesting that the salary presented in the initial offer is well below the industry average. You'll also want to continue highlighting your expertise and qualifications and the value you bring to the position.
10. Be willing to compromise
During the negotiation process, you want to remain firm but flexible about your requests. For example, if the company cannot meet your desired salary, you may ask if they can offer additional benefits, such as extra vacation time or personal time off days. You can also consider asking for alternative compensation methods, such as quarterly bonuses based on performance or stock options. Your professionalism and respect during the negotiation process provide insight into your character and what it's like to work with you. Regardless of the outcome, be sure to maintain a positive relationship with the company and hiring manager.
11. Make your final decision on the offer
Once you come to the end of the negotiation process, you must decide on the job offer. This means either accepting or declining the position. If you have come to a mutually beneficial agreement, this makes the decision easier. However, if the final counteroffer is less than your desired terms and conditions, you must decide whether to take the position or walk away.
Whether you accept or decline the last offer, ensure you remain professional, courteous and respectful, as you never know when your paths may cross again in the future.
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