How to negotiate for better pay, perks when the job offer lands
Sabrina Hill knew this email was the final straw.
By the end of 2021, the message from her human resources department informed her, she would be required to return to her office full time. No exceptions.
It was late August, and Hill, who lives in Seattle, was newly divorced and had primary custody of two children still attending school virtually. The flexibility of remote work had become a pandemic lifeline that she wasn't willing to give up.
“I never wanted to go back to being bound to having to be in an office, especially as a data professional, where all my work is on the computer,” said Hill, 47, who was a hospital data analyst at the time. “It was illogical,” she said of the return-to-office rule, “but they were just so rigid about it.”
She began her job search that same week, determined to find a company willing to give her both the freedom to control her own schedule — and a significant pay increase. Within a month, she secured a fully remote job as a senior data analyst with $20,000 more in base salary, unlimited paid time off plus stock options.
Her timing couldn't have been better. Companies advertising remote work opportunities shot up a staggering 357% on LinkedIn from May 2020 to May 2021, as employers shifted to attract job seekers who were just as interested in perks like remote work privileges and unlimited paid time off as they were in a good paycheck. In a recent Linked-In survey, job seekers ranked work-life balance above compensation as their top priority.
Employers across multiple industries need to fill roles quickly, drawing from a shallow applicant pool that doesn't always meet that demand. For workers savvy enough to recognize their leverage, it has never been a better time to negotiate a generous compensation offer.
Job postings that advertised incentives like signing bonuses doubled from July 2020 to July 2021, according to Indeed.com. And these juicy incentives aren't just for Silicon Valley engineers and NFL stars anymore. FedEx and Papa John's are offering $500 to $1,000 bonuses for delivery drivers.
As a career and money coach, I have seen clients successfully negotiate offers that include substantial salary increases and signing bonuses. The most costly mistake that workers can make these days is leaving the bargaining table without asking for more.
Here are some strategies.
• Make a realistic request for a signon bonus. Companies are often more willing to offer bonuses to job candidates than ratchet up their base salary because they have to cover the cost only once. The key when asking for a bonus is to make a realistic request.
I advise my clients to start with any amount of money they are leaving on the table at their current employer. That can include unvested equity grants, stock options and unvested 401(k) contributions.
Job seekers who aren't necessarily leaving money behind can start by posing the simple question: “Is a signon bonus available?” Let the employer name a number first. If it presses you for specifics, a good starting place is to ask for 10%-15% of your base salary.
• Line up multiple interviews. Even if you have your eye on one employer, having competing offers from multiple employers gives you extra bargaining power. Plus, it demonstrates to prospective employers just how in demand you are.
For Hill, this strategy came in handy. She received an attractive offer from her top choice but asked for a week to decide as she was waiting on an offer from a competitor. During that time, she asked for additional perks she had never considered in previous job negotiations, like restricted stock units (shares in the company that would vest over time).
Ultimately, her top-choice company, the clinical software company AdaptX, offered her $15,400 worth of restricted stock units and promised her she could be as flexible with her schedule as she needed to be.
• Ask for additional equity. If a company offers equity (such as restricted stock units or stock options) as an incentive for new hires, you can always ask for more than the initial offer. Similar to those one-time cash sign-on bonuses, companies are much more likely to sweeten an equity offer than increase your base salary.
• Ask for paid time off upfront. After two years grinding away in her health care analytics role in the middle of a pandemic, Hill was thrilled to find a new job opportunity that paid competitively.
But she was still burned out and craved time off to recuperate before starting her new venture. Rather than ask for a later start date and use her savings to cover her expenses in the meantime, she asked her new company to allow her to start the job but immediately take a paid vacation.
“I was able to quit my job early and take about three weeks to reset, and I was paid for that,” Hill said. “I thought, `Oh, wow.' ”
•Read the fine print carefully. Perks like sign-on bonuses and equity often come with strings attached.
With sign-on bonuses in particular, watch out for clauses that require you to stay employed with the company for a certain period or else have to repay the cash.
And restricted stock units are called “restricted” for a reason. They typically are doled out (or “vest”) in batches over several years, and employees can cash them out only during certain periods throughout the year. If you're granted stock options, which give you the option to buy company shares at a discount, you can't exercise them until you reach your vesting date.