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Consider if I work in a city making X, and am offered a job in another city for also X. The new city has a cost of living that is almost double where I currently live, yet the offer is the same as what I make now. It is like taking a 50% cut as far as lifestyle is concerned.

I feel that I am worth more than they are offering, but I really do want to work at this company. How can I express my concern about the offer, without damaging my relationship with the company; or ruining my chances of getting the job?

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See also: How Can I Determine a Reasonable Salary to Ask For? as the first step. –  jcmeloni Feb 16 '13 at 14:54
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Is your currently salary inline with market norms? Or have you had the good fortune of getting into a very well-paid position at present which makes it difficult to find similarly well-paid alternatives? –  Carson63000 Feb 16 '13 at 21:22
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What is double living costs anyway? Moving to a large city, in my world, typically means choosing a smaller home. Other costs might not differ that much. But then I don't know your details –  Petter Feb 18 '13 at 5:42
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Also note that in general, no city is double the cost of living of another city. The states range from 90 to 115 with average being 100, which is a 27% increase in cost of living. Unless you're moving from Idaho to Manhattan without making any adjustments to lifestyle (which I sincerely doubt), then 'double' probably isn't realistic... –  jmac Aug 19 '13 at 0:40

3 Answers 3

up vote 14 down vote accepted

The first thing I would do is confirm that it is an actual low ball offer. Check with Glassdoor or Salary.com what the position you are applying for is worth there. Once that is established and you know for sure it is a true low ball offer (and if they did their research they also know it is a low ball offer) here is what I would do and I have done.

More than likely they know it is a low offer and they are expecting you to come back with a counter. If you have done your research then you know what you are likely worth and what the position is worth in the city. Do some basic calculations as to what you believe you can get, maybe slightly higher and start there. For me I would tend to go with my desired salary level in that region + 15%. In most cases this is what is expected candidates to do.

From there they will tend to counter or throw in some other spiff like maybe a signing bonus if they really want you badly. They know the average salary so you will likely get a counter of the average salary for your position in that city perhaps + 5%. Just work with them a little on this. It is normal.

In the end be humble in how you speak to them. Never push too hard if you want the position truly. Do be honest in your needs. It is OK to state that you really are hoping to work with them but it just isn't possible to accept their offer for (insert your various reasons) but you are hoping you can work it out. In your case, at double the cost of living it simply may not be possible unless they are typically paying double what they are offering you.

If the company is truly giving you a horrible offer and won't budge on it then are you sure this is the company for you? I have found great places to work that I have enjoyed never used this technique so extremely. Maybe at most 5-10% less than average salary for the region knowing that you are going to negotiate back and often good companies that really want you give you their best right up front.

(TL, DR)

  1. Think long an hard if this is where you want to be
  2. Be honest and courteous in your responses
  3. Know your position and salary in the region you are going into
  4. Negotiate fairly
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You have a job and their offer requires you to relocate, they need to realize they have to make a solid offer to a qualified candidate.

Make your counter-offer and explain your cost of living comparison. Have sources in case they want to claim you're incorrect. See if they even bothered to check some website to put your current salary on the same scale as their area.

Any company that is worth working for isn't going to hold any of this against you. Either they don't have the budget or they didn't do their homework; there should be nothing personal about it.

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The rule USED to be "Make a reasonable offer up-front." The candidate may accept it, reject it outright, or attempt to negotiate, but their initial offer will tell you a lot about how serious they are about hiring you.

This offer isn't reasonable. It isn't even close.

They KNOW what you're currently getting. They KNOW they're in an expensive area, and you currently aren't.

Companies that are really good to work for don't lowball their offers. Even the companies that are doing really cool stuff understand that they have to pay at least the going rates for their people, because their competition WILL pay going rates.

Also, recognize that, should you take this job, your raises will be based on your hiring salary.

Unless you are willing to accept continuing abject poverty as a condition of employment, this is one offer you should walk away from.


Enderland commented: "1) You have no idea if this is an offer which isn't reasonable, 2) wtf does "abject poverty" have anything to do with the situation, 3) how does the company offering KNOW what they currently make?, 4) how do you KNOW the asker is making market rate anyways?, and lastly, 5) they aren't asking "should I walk away" they are asking how to respond, so you completely miss the point of the question." His comment deserves a longer answer than I can make in a counter-comment.

To address his points in logical order, rather than physical:

3) Every hiring process I have ever seen or heard about in the last forty years or so included disclosure of the candidate's current salary and salary history. There are several reasons for this, the simplest being that it gives you an idea of whether the candidate is ROUGHLY qualified (you generally don't hire a $20K/year clerk for a $80K/year executive job). It also prevents you from unknowingly offering the candidate LESS than he is currently making, which would be a waste of time.

Obviously, the current salary is only valid in context of his current location. However, his current location was on his resume and his job application form. They know where he is now.

2) If he is reasonably compensated in his current town, and he moves to a town with DOUBLE the cost of living, he's going to be hurting come payday. Alternatively, it may be that he's "making out like a bandit" in his current job, and he would be then much closer to "just making ends meet" in the new town. Accounting 101: "Dollars in pocket = dollars in - dollars out." "Abject poverty" may have been an exaggeration, but there is such a thing as poetic license.

4) There are three possibilities: A. The original poster is currently underpaid. B. The original poster is currently paid market rate. C. The original poster is currently overpaid. I chose to assume that he was not overpaid. At that point, he is either underpaid or being paid market rate. If he's underpaid in his home town, the odds are that he will be REALLY underpaid in a more expensive market.

1) "Reasonable" is, of course, subjective. Every serious offer, where "serious" meant "we do want to hire this guy", that I have ever seen or heard of included at least a 5% "courtesy bump" in the salary, based on the candidate's current salary (see point 3, above). The offer on the table is an actual dollar match, not a bump, with a significant penalty baked in because of the cost-of-living disparity. Where I come from, this is a pay cut. Further, because of the SIGNIFICANT disparity in cost of living, this is effectively a LARGE pay cut. I see that as unreasonable.

To extend it a bit, for those who think he should counter-offer: Prospective employers do in fact have some amount of negotiating leeway, and, in SOME cases, will consider counteroffers. HOWEVER, they usually don't have 50% or more leeway. When they offer, say, $100,000/year, that usually doesn't mean they're easily willing to go as high as $150,000/year. In the case at hand, for the candidate to break even on cost of living, he needs a 50% bump on his current salary to go to TheirTown: anything less is an effective pay cut. To create negotiating room, he's going to have to ask for considerably more than 50%, to have a hope of them settling at what he needs. If he's currently getting, say $70K, and he needs at least $105K to break even on cost of living, he's going to have to counter with somewhere around $140K, and it is highly unlikely that they have THAT much negotiating leeway.

5) To clarify, my answer was that his response should be to decline the offer and walk away. I don't see any upside in attempting to negotiate a reasonable offer, given that they appear to be starting so far apart.

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1) You have no idea if this is an offer which isn't reasonable, 2) wtf does "abject poverty" have anything to do with the situation, 3) how does the company offering KNOW what they currently make?, 4) how do you KNOW the asker is making market rate anyways?, and lastly, 5) they aren't asking "should I walk away" they are asking how to respond, so you completely miss the point of the question –  enderland Feb 16 '13 at 18:48
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@DA That depends on if your definition of "a great place to work" includes "when you're not at work, you're eating Ramen noodles." –  Amy Blankenship Feb 17 '13 at 17:15
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@DA: Many years ago, I spent some time at General Dynamics Fort Worth Division. GD/FW was lower pay than some of the other firms in the area. They made up for it partly by being a REALLY good place to work, and partly by noticing that their people got to do things you just don't get to do very many places. (A buddy of mine was a test engineer. He'd been there a few years. Part of his regular job was to ride backseat in a two-seat F-16, and test IN THE AIR.) They still made reasonable offers up front. –  John R. Strohm Aug 17 '13 at 0:09

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