Is it possible to make a counter offer to an employer that is too low?

Question

I gave a target figure for my salary during a call (say $X) and the company comes back with $Y (5~10% less than $X) plus a small bonus and stock options. When adding the bonus to $Y, it actually comes to be about $X; although the bonus is an "up to so and so percent of salary" so while there's no way to know for sure, it would probably come to about $X if we assume the bonus to be the higher end of that range. When I originally gave my target salary figure, I was taking things like stock options and other benefits into account; obviously I could only estimate what my benefits would be since I didn't know beforehand but I tried best to think of the whole package I would get when coming up with the $X.

Now that I have more details on what the entire package is going to be and having done rough calculations on my expenses against it, I'm hoping that I can negotiate about an extra 3%~5% from the salary they offered me. My concern is though, that by making a counter offer, I may seem greedy (maybe the employer thinks "the salary we offered plus the bonus is about as much or even slightly more than the figure you gave us. plus there's stocks too. so why are you asking for more now?"). And additionally, by making a counteroffer that isn't very high in amount, I'm afraid that it may give the impression I'm trying milk the cow as much as I can, just to see if I can score some extra cash. While I don't want to jeopardize this offer, I also want to avoid the regret of not having negotiated at all. Is there such a thing as a candidate responding with a counter offer that is too low?

p.s. if it does seem like I'm trying to milk the cash, please do be direct and point it out. I'm still learning the various etiquettes involved in an employer-employee relationship so perhaps I'm asking a question whose answer is obvious to everyone.

Answer 1

Now that I have more details on what the entire package is going to be and having done rough calculations on my expenses against it, I'm hoping that I can negotiate about an extra 3%~5% from the salary they offered me. ... While I don't want to jeopardize this offer, I also want to avoid the regret of not having negotiated at all. Is there such a thing as a candidate responding with a counter offer that is too low?

It can be problematic to have too many back-and-forth rounds of negotiation during the interviewing process. You could come across as flighty, someone who doesn't know what he wants, or greedy. At some point, the company will either just say "No" or could even decide to move on to other candidates. Use your remaining round(s) wisely.

Although we can't advise you on the specific numbers, here's one approach you can take.

You need to determine up front what you want, and what you need. Knowing those two numbers puts you in the best negotiation position.

The first number is what you'd realistically like to get. While we'd all like to get "as much as possible", there's no real way to determine every possibility. And while we'd all like to get "a billion dollars", for most of us that's not realistic. Instead, think of this number as an achievable amount that, if received, would make you feel comfortable about the compensation.

The second number is what you need to get to consider accepting the position. It should cover your financial situation, such that you can afford to stay at this company.

The thinking here is that you cannot accept any job which doesn't offer what you need, and that you shoot for what you'd like.

If the current offer is below what you need, then you might put some effort into additional negotiating, or you might just decide that you need to move on to other companies and opportunities.

If the current offer is more than you need, but not as close to what you would like as you think is realistic, then you should counter-offer something close to (or at) the number you would like.

If the current offer is more than you need, and close to what you would like, then you might indeed be over-negotiating. You might want to consider accepting the offer, feeling good about it, and moving on with your life.

If the current offer is at (or over) what you would like, then you should consider just accepting.

No matter how this works out, once you accept an offer you need to try and stop over-thinking it. Be happy with what you have. Spend your time and energy on the job, executing and learning - that's your best path to raises, promotions, and continued financial rewards.

Some folks continue to dwell on "I could have squeezed a few dollars more out of that negotiation." I don't think that's a healthy attitude. Don't be that person. Accept and move on. Be happy with what you got and where you are.

Answer 2

I think you rolled too much into your '$X'. In the future I'd recommend that if you're going to volunteer a dollar amount to a potential employer (which in and of itself is not necessarily the best idea; the first person to give a number loses), you do it in the context of 'this is how much cash I expect to receive, regardless of what benefits, performance bonuses, stock options, and other incentives are in play'. You can't pay your mortgage in stock, healthcare, and free catered lunches, so there's no reason to try to include those things in your $X. But that's somewhat tangential.

With respect to your current dilemma, I very seriously doubt that anyone would consider asking for an extra 3-5% "greedy". That's quite a modest request, in fact (and too modest, in my opinion). There are a number of ways to 'justify' the request, if you feel you need to, such as saying that you took a closer look at your monthly expenses/the local cost of living and found that you'd need slightly more in terms of salary than you asked for. Or that you had a look around on glassdoor, and feel that their offer is a bit below the market rate. Or that when you said $X, you were actually referring only to the cash component of your compensation, and not the whole package. And so on.

Or if it's just the salary component of the offer that's too low, a very safe counter-offer would be to ask them to increase the salary component by whatever amount by deducting a comparable amount from the stock/equity component. But you have to decide if the offer is really "too low" or if what you really want is to not lose it. It can't be both at the same time (an offer that's legitimately too low would never be accepted, so there's no reason to worry about losing it; and an offer that you're unwilling to pass up can't be "too low", by definition).

Anyhow, requesting more money is a normal part of the negotiation process. As long as you do it tactfully you really don't need to worry so much about how the negotiating will make you look to the prospective employer. You'll just look the same as any competent employee who knows what they're actually worth.

Answer 3

Don't be rude of course, but don't let your need to feel like you're being tactful lead you to dancing around the point you're trying to make. Talking about compensation packages is a perfectly normal part of the day to a hiring manager/HR person and regardless of whether or not they agree to your requests a normal, well balanced HR person working for a normal, well balanced company is not going to think anything bad about you for countering their offer.

I think therefore that the answer is to be straightforward:

Thanks for your offer. I notice that your salary is only 95% of $x, which I had already identified as the salary I would be prepared to work for. If you can adjust the salary to be $x then I will be happy to agree to the rest of your offer.

You're just as entitled to negotiate salary as they are (and to be clear, that's precisely what they're doing right now by undercutting what you asked for). Don't allow them to sidetrack you with talk of bonuses or shares. These are an addition to salary, not an alternative to it.

You don't need to worry about justifying your request for more salary with reasons either, in fact I would suggest it's better that you don't. Simply put, your position should be that you are simply worth that $x and that therefore what you're asking for is perfectly reasonable (I'm assuming that industry scales and your career progress back that up of course).

The hiring process is a two way process and that includes the interview, contract and salary. You can negotiate anything you want... though of course they can walk away if they don't like what you ask for or how you ask for it. But then so can you if they act like jerks.

Answer 4

Say they offered you "$100,000 plus a b c benefits".

Simply reply,

Thanks for the fine offer of $100,000 plus the benefits mentioned. Based on the current market, I would feel more comfortable with $120,000 plus the the benefits mentioned. What do you think?"

It's that simple.

There's nothing more to it.

1. Do not AT ALL mention ANYTHING from previous discussions - AT ALL.

2. As a side note, note that "bonuses" are usually a fantasy. If the bonus was certain and locked in stone, it wouldn't be a bonus. They'd simply add it to the salary. Generally "Bonus" simply means "there's a small chance we will freely give away more money."