How to Negotiate Salary, According to HR Insiders

Negotiating a compensation package with a potential employer is a game-changer for many people. When the right opportunity comes along, it can result in the pay and benefits that truly make the time and energy you put into your livelihood worthwhile. But do workers still have leverage?

The job market influences employee-employer power dynamics. Less demand for labor typically means workers don't have the upper hand. However, as Gen Z overtakes Baby Boomers in the workplace, employees still hold more power than in past years, thanks to widespread information access, pay transparency, wage inflation, and other factors.

It's not just on an organization's HR leaders to know what today's top talent wants—it's also on you to learn how to ask for it. From negotiating better starting pay to requesting a raise, job seekers and employees alike should know how to approach the subject pragmatically and facilitate an outcome where everybody wins.

BambooHR® Total Rewards makes it easy for businesses to share insights about their compensation strategy with their employees. In this article, we'll review the best practices for negotiating a salary in the hiring phase and how to ask your employer for a raise.

How to Navigate Salary Negotiations

Knowing how to negotiate a job offer is a skill that can benefit you throughout your career, whether you're the job candidate or the hiring manager. If you're new to the process and it feels a bit tricky, a little preparation can help you feel more comfortable in the moment. Think of the initial offer as a framework you can use to get the conversation rolling.

Salary Negotiation Tips for Job Candidates

Good employers want to pay you what you deserve to keep you with them long-term, so they need to know what you expect. Keep these tips in mind before negotiating with a potential employer:

• Do your homework. Use websites like Payscale, Glassdoor, and the US Bureau of Labor Statistics (BLS) to get an idea of how much other people in your position earn annually and start building your case.
• Find a salary range. Giving a salary range between 10% and 20% creates more flexibility on both sides of the table.
• Gather your bargaining chips. Total compensation is more than a dollar figure—it's PTO, remote work options, and other benefits. If you don't reach your top salary, consider what else might make a lower figure worth it (within reason).
• Take a practice run. Once you have everything you need, practice talking it out with a friend who's done this before. This step can help you sound and feel more confident during the actual conversation.
• Go in with a positive mindset. Negotiation doesn't mean conflict—it means communicating your needs. Try to keep a calm, professional attitude and an open mind throughout the process.

Salary Negotiation Tips for Recruiters and HR Professionals

The end goal of a successful salary negotiation is to clarify expectations, so the job candidate can make a fully informed decision. Transparency on your end goes a long way, but you’ll also need information from them to inform your side of the conversation. Here are a few key salary negotiation tips for recruiters and HR professionals:

• Get to know the candidate. Not every pay rate or perk suits every person. Learn a little about their intent to create a high-value compensation package that appeals to this candidate.
• Don’t be pushy. Convincing someone to take an offer they won’t be happy with won’t create a positive long-term solution for the company or the employee.
• Communicate as clearly as possible: Knowing your constraints and communicating them upfront can help you both navigate the process successfully.
• Keep the “human” in human resources. Be honest and empathetic during salary negotiations. Even if a candidate walks away from a job offer, they’ll remember how your company handled the conversation.

How to Ask for a Higher Starting Salary

A potential employer may disclose the starting salary for a position at different times during the hiring process. You could learn about it from the job posting, during the screening interview with a recruiter, or in the job offer itself. Before jumping right into negotiation mode, think about your timing—is it appropriate to ask for a higher starting salary during the interview or after you're offered the job?

In most cases, the interviewer will ask about your salary expectations, inviting you to share your perspective. Come prepared with a realistic salary range backed by market research. This data should represent your value to their company and support your lifestyle.

If the interviewer doesn't bring it up, feel free to do so yourself. Waiting until the end of your first or second interview gives you time to gather the insights you need for this discussion (e.g., job responsibilities, potential challenges, fringe benefits, upward mobility). Simply ask about their approved starting salary range for the position and go from there. Most employers have a general idea of how much they're willing to pay for any given role, which provides a basis for negotiation.

Once you receive a job offer, take a couple of days to review it. Learning more about the total compensation package can help you determine if their offer is worth it. If it doesn't match your experience or isn't on par with the market average for your field, make a higher salary counteroffer. For example, you could say something like:

"Thank you for considering me for this position. I'm really excited about the possibility of joining your team and the work we can do together, but I'm wondering if we can explore a slightly higher starting salary. My research shows that the average pay range for similar positions in this area is between $85,000 and $90,000. Based on our discussion about the role, I think my experience and skills in X, Y, and Z exceed those required for the position."

Here are a few things to keep in mind when asking for higher starting pay:

• Assess your value. Think about what makes you stand out above other job candidates and how your expertise can benefit their organization in the long term.
• Aim slightly higher. Suggest figures that are a little higher than your goal. That way, your starting pay will be more likely to meet your expectations.
• Put it in writing. Even if you're discussing your offer with a recruiter in person, be sure to bring a counteroffer letter for them to review later.
• Consolidate your counteroffer. If you're planning to ask for more money and benefits, lump everything into a single counteroffer. That way, the hiring manager can evaluate your total request.
• Be professional. Present your case logically and professionally, while expressing gratitude for the opportunity.
• Prepare for all outcomes. Many employers can compromise on compensation, while others can't. Prepare to respond respectfully, even if it means trading a higher starting salary for a possible raise later or turning down this job for one that pays better.

How to Negotiate Hourly Pay

Hourly employees typically discuss compensation in terms of how much they make for each hour worked. The base pay rate is governed by the Fair Labor Standards Act (FLSA) and state minimum wage laws. Many employers pay above the minimum, but, just like a yearly salary, hourly wages depend on several factors, such as:

• Position within the company
• Employee education and experience
• Industry rates in your area
• Company pay scale

Also, your income may fluctuate depending on how much you work each week. So, you should take this, along with opportunities for overtime pay, into consideration during hourly rate negotiations with a potential employer. This helps you gain a realistic understanding of how well your estimated yearly income will meet your needs.

How to Negotiate a Raise

Do you think you should be making more money in your current role? Many people don’t know how their salary compares to their colleagues’ earnings. Pay transparency laws are designed to help level the playing field for employees across demographics, but it's hard to know what your coworkers are making without asking directly.

Instead of switching companies, consider negotiating a raise with your boss using the same salary negotiation tactics as job seekers. For instance, you should still research what other people are making in your position, come up with a flexible range (e.g., 3.5% to 4%), and prepare a few talking points about your value.

This is another instance where your timing could work in your favor. According to Glassdoor, the best times to ask for a raise are:

• During your annual performance review
• After successfully completing an important project
• When business is good and your manager is happy

Your organization may have strict budget constraints salary-wise, but the hiring team wants to do everything they can to keep you! Even if you don't get the bump you were hoping for, you might gain PTO or telecommuting options that make staying with your company worthwhile. Plus, HR supports you by developing programs and benefits tailored to specific employee needs, helping your organization stay ahead of competitors for top talent.