From a purely financial perspective, negotiating your initial offer is probably one of the most significant career moves you will ever make. Let’s say both you and Jane Doe have an initial offer of $50,000/yr. Let’s say you decide to just accept the offer, but Jane negotiates and gets her starting salary increased to $55,000/yr. Just a difference of $5,000 right? Think again.
Just for the sake of discussion, lets say everything else about the offers remains the same between the two of you. Also, to make it simple, lets say for the next 25 years Jane and you have exactly identical career paths. And keeping with the super-simplification, let’s ignore all the variables and just consider one factor – a 4% raise each year. At the end of 25 years Jane’s salary will be $140,981/yr and yours will be $128,165/yr. $12,000/yr is a much bigger number than $5,000/yr, and it stings a litte, right?
Now consider how much you have earned over the 25 years and how much Jane has. What if I were to tell you that the difference in earning over this period is a whopping $208,229? Yes, its true. Just plug in the number in an excel sheet and you will see for yourself. So, by just negotiating a simple $5,000 raise in starting salary, Jane could earn hundreds of thousands more than you!
Now imagine if we add in all the other perks of that initial offer….
Don’t be that person who kicks yourself 25 years down the line! Pick up some of the tricks from this series of articles, and you can ace the negotiation and get the top dollar offer. Knowing that you were not so naive as to jump on the first offer that came along and negotiated your way to a better offer will help you face other career decisions down the line a lot more confidently as well!
- Evaluating and Negotiating Job Offers Part 1 – The Base Salary
- Evaluating and Negotiating Job Offers Part 2 – Signing Bonus & Relocation Benefits
- Evaluating and Negotiating Job Offers Part 3 – Stock Options
- Evaluating and Negotiating Job Offers Part 4 – 401 K
- Evaluating and Negotiating Job Offers Part 5 – ESPP
- Evaluating and Negotiating Job Offers Part 6 – Other Perks
Yes – it is a shame companies are willing to overlook the long-term negative impacts of their lowball offers just for short-term quarterly repoting. Additionally, people are willing to overlook these as well because their focus may be on the short-term benefits (being employed vs unemployed).
Actually just this week I helped a friend negotiate a job offer. They ended up settling on a 20% increase from where he is currently and now he’s moving out to San Francisco!
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Woh, that puts things into BIG perspective.
For the longest time, because of my age, I’d just take what I could get but I don’t have to worry about it as much anymore since I’m freelancing but it really shows how much that extra bit of money truly matters.
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Everyone should negotiate their salary, but most people are under prepared in their line of work and lack that ace in the sleeve. They’re afraid they won’t get the job if they expect more money. And these days, they’re probably right.
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