The Cost of Negotiating

As an executive recruiter, I’ve been able to observe the many different ways candidates handle receiving job offers. As different as everyone’s reactions may be, I’ve recognized that deep down most candidates feel they should at least try to negotiate. I sense that most people want to avoid feeling like they left money on the table, and they feel that if they don’t try to get more money, they are foolish in some way. I wanted to share what I’ve learned about negotiations because I don’t want anyone to potentially lose more than they have the opportunity to gain. Yes, in regards to a job offer, there could be a very steep cost to negotiating.

Political Capital: The first idea I would like to share is something called political capital. By the time someone receives an offer, the new company loves them. In other words, their political capital is high, and there is a symbolic bank account with their name on it filled with this political capital. Every day someone takes to accept the offer, withdrawals of political capital are being made from that bank account. The same is true when we go back and ask for more money without easily verifiable reasons. Let’s say a candidate asks to increase the offer because…well, just because they feel like they need to negotiate…they are lighting their political capital on fire. They may gain a few thousand dollars, but it may cost them a fortune in political capital. What candidates don’t see is the company venting to me about their tinge of buyer’s remorse and their second-guessing if the candidate is the right person.

“Are you saying that I should never ask to increase my offer?”

No, that is not what I’m saying. Read on.

The Unacceptable Offer: Asking for an unjustifiable increase in the offer is when a candidate begins to bankrupt their political capital. Asking for an increase so that the offer is to a level of acceptability is appropriate, and both people are working toward the same goal. The bigger issue is this: Why did the company extend an unacceptable offer? Candidates should tell their recruiter long before the offer comes to them what will be acceptable or not. Let the recruiter professionally advise, not negotiate with, the company to what they should offer you. This begs the question, should the candidate be negotiating their job offer?

What is a Negotiation?: A negotiation takes place in one-time buying events, where you try to extract as many concessions from them, while also reducing concessions on your side. Does that sound like the right way to start off the relationship with your new employer? A job offer is not a buying situation comparable to buying a house. A job offer is closer to a marriage proposal. When I proposed to my wife, I hoped for a “Yes.” In fact, I hoped for a “Yes, of course!” I would have been shocked by a “Yes, but…” or a “Yes, if…”, and I would have been crushed by a “No.” When a company extends a job offer, they, too, are expecting a “Yes, of course!” The proposal is not time to negotiate the size of the ring.

Solution: As mentioned earlier, the solution is working closely with your recruiter with full transparency about all the moving parts that make up your employment package. Educate your recruiter so they can advise their client. Many low offers are due to the candidate not looking deeply into their employment package ahead of time. Let your recruiter burn up their political capital trying to raise the offer to an acceptable level, and keep the political capital that you’ve earned intact. If the company you want to work for offers you a job for an acceptable amount of money, say “Yes, of course!”

Here’s a script: “Mr. Manager, I am very grateful that I am the person you want to hire, and I am excited to be on the team. I can’t wait to get started on PROJECT-A and PROJECT-B. The only hesitation I have at this point is that the financial part of the offer was below what I was expecting, and at this level it isn’t acceptable. I wanted to say clearly what I would accept so that we can get started on these projects. I would, without hesitation, accept an offer of __________. The reason I think that is appropriate is___________. Do you think that is possible for XYZ to do?”

I hope this helps, and I hope I can help you receive your next offer!

One Strategic Partnership. Many Solutions.