How to negotiate an employment offer letter

How To
September 5, 2022
min

This post explores if, when, and how you can negotiate your next employment offer letter. Read on to find out more. Or, if you’re looking to create an offer letter, check out our free job offer letter template

Can you negotiate an employment offer letter?

Contrary to what many job applicants think, it is often possible to negotiate an employment offer letter. In fact, if the terms within the offer letter don’t meet your expectations, you’re encouraged to negotiate them. If companies are keen to sign the best talent, they will often take a flexible approach and revise the terms of the job offer letter. 

There will be some exceptions, though. Some employers may reject employment offer negotiations altogether. This often happens if there are limits due to their budget, or if the terms in the contract are standard ones. 

That said, it’s still worth asking to negotiate the offer to agree on terms that are more mutually beneficial. 

What can you negotiate within an employment offer letter?

Even if you are given the go-ahead to negotiate your job offer letter, there may still be some limits to this. Some employers will let you know which terms are non-negotiable, and if they use a contract automation platform like Juro, they’ll even be able to lock these terms and clauses to protect them from edits. 

However, there are a few elements of an offer letter that are negotiated most often. These include: 

  • Salary. You can often negotiate how much you’ll be paid and how frequently you’ll receive this payment. This is useful if you are looking to avoid a pay decrease when moving into a different role, or if you feel that the salary offered is below the standard salary for similar roles.
  • Working hours. Plenty of businesses embrace flexible working and will be more than happy to update your contract with hours that better suit your needs. This is a discussion you should have with the hiring manager early on to ensure both parties have the same expectations. 
  • Start date. It’s also common to negotiate the employment start date. While most employers want new employees to start as soon as possible, the new employees may have other commitments they need first. Some like to take a short break before moving into a new role, or they will need to give a certain amount of notice when they resign. 
  • Stock options. Some employers offer stock options to their employees, and the details of these options are usually drafted in an option agreement. This is something you can discuss and negotiate with the employer prior to accepting your employment offer. 

But these aren’t the only aspects of your job offer letter than can be negotiated. Some employers will allow you to negotiate all aspects of the offer letter that can be changed without breaking the law. 

How to negotiate salary within a job offer letter 

More often than not, it’s the salary that gets negotiated within an employment offer letter. Yet, salary negotiation remains a challenge for most professionals. In fact, only 37 per cent of millennials have ever asked for a salary increase, according to a survey by Payscale

There are plenty of reasons for this. Many people feel that they aren’t entitled to ask for more money when they’re offered a role. Others are worried about seeming greedy, or like they’re accepting the job for the wrong reasons. It’s also true that many employees don’t know what the average salary for roles like theirs looks like, so they’re unsure if they’re being underpaid in the first place. 

Whatever the reason, negotiating a salary that works for you is important, especially if you’re considering rejecting the employment offer altogether because of the salary expectations. 

Here are a few tips for negotiating your salary in an offer letter. 

🔍 Find out the average salaries in your industry

If you haven’t already, you’ll want to get a better idea of what the industry average salary is for someone in your role with your experience. There are plenty of resources that help with this, including Glassdoor, Salary.com, PayScale and Indeed

Once you know this, you’ll be able to roughly benchmark what you should be getting paid, and this information can be used during offer letter negotiations to ensure you’re being compensated fairly. 

🙏 Show gratitude for the original offer 

Even if the original salary offer within the offer letter wasn’t what you expected, it’s still important to show that you’re grateful to have received it. You should also continue to demonstrate your eagerness to do the role if you feel that it’s a good fit for you, with the exception of the salary. 

After all, certain employers could be hiring on a lower budget than some other businesses. It’s best to politely inform them that whilst you’re grateful for the offer, the salary doesn’t quite meet your expectations. This helps to preserve the relationship between yourself and the employer, which is useful if they can revise the salary or revisit it at a later date. 

💰 Emphasize the value you bring to the company

Next, you’ll need to convince the employer that the value you’ll bring to the role means you ought to be paid more for it. Ask yourself:

  • What unique and useful experience do you have that other candidates may not?
  • Which skills do you have that you believe overqualify you for that pay range?
  • Where have you added value to businesses in the past, and how can this be quantified?

It’s always useful to provide evidence of these claims, too. If you can provide specific examples of your success in the past, even better. 

🧠 Be open-minded about other forms of compensation

There are other ways you can be remunerated aside from your base salary, and this is important to consider when negotiating your offer letter. This could come in the form of bonuses, stocks or other incentives. 

It’s worth considering all of these since employers may propose them as an alternative to a salary increase. Understanding what they are and how they work will be critical when making an informed decision about whether or not to accept it.

However, many of these alternatives can be just as valuable as salary increases, so it’s good to maintain an open mind when discussing these options. 

👔 Be professional with your counter offer 

If you decide to propose a counter offer to the employer, make sure you do this in a professional manner. More on that now.

How to counter an employment offer letter 

We just mentioned how important it is to be professional when delivering a counter offer, but what does that actually mean? Well, one of the best ways to provide a counter offer to a job offer letter is to respond with a clear and detailed explanation of what you’re asking for and why you’re asking for it. 

If it’s salary, it’s useful to provide an alternative salary figure that you would be willing to accept, as well as why you think it’s reasonable to ask for this. This is where you should really draw upon your existing skills and experience, as well as the value you can confidently bring to that particular role and company. 

There are a few ways that you can deliver this counter offer. If the employer uses a contract management solution like Juro, you may be able to add redlines to the offer letter directly within the platform. This will flag to the employer that you’re not in agreement with that particular term and you can discuss it with them further. 

Alternatively, if the employer has sent the offer letter to you as a static PDF document via email, you can draft an email back to them with your counter offer. This should be addressed to the individual that sent you the offer letter and should include all of the information described above. 

Once the hiring manager has received the counter offer, they will either accept, reject or respond to it with their own counteroffer, which you can consider.

How to reject a job offer letter

But what if you’ve received an employment offer letter and you want to reject the offer? Well, you should still acknowledge that you’ve received the offer and let them know of your decision not to accept it. This can be done via email and ensures that the employer can continue with their hiring process without waiting on you for a response. 

It’s also good practice to thank the employer once again for their time and consideration at this stage, even if you reject their offer. 

Want to learn more about how to negotiate?

To find out more about how to negotiate effectively, check out these resources:

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