Don't Blow It: How to Handle a Salary Counteroffer

MarketsMotley Fool

You're in the home stretch. You have an offer on the table from a potential employer (or even your current employer) and you are at a three-way crossroads between accepting an offer, declining, or submitting a counteroffer. Anxiety builds, doubt may creep in, and palms get sweaty. "Just don't blow it" comes to mind, flashing like a giant neon sign.

Breathe. Keep calm. Don't panic.

Continue Reading Below

Negotiating a salary or compensation package is a stress you can manage. It's like an intricate dance learned over time: take one step forward, two steps to the side, spin, then come together. Keep in mind, however, negotiations are no spin on the Dancing With the Stars ballroom floor -- no extravagant or wild displays, no improv. Simply stick to the steps.

To teach us the negotiation dance, we turned to Deepak Malhotra, the Eli Goldston professor of business administration at Harvard Business School and the author of Negotiating the Impossible. Not only does he teach MBA students the 15 rules of negotiation, he also warns of the pitfalls that we all may face as we seek to get an ideal package from employers. And one point he is sure to make is that salary negotiations are about more than just base pay or the zeros on a check. They're about the whole package.

"At many companies, compensation increasingly comes in the form of stock, options, and bonuses linked to both personal and group performance," said Malhotra. These factors plus benefits, time off, location (such as working from home) and title are all on the table during negotiations. And now, perhaps more than ever before, in many industries negotiating the finer details is par for the course.

He continued, "Job market complexity creates opportunities for people who can skillfully negotiate the terms and conditions of employment. After all, negotiation matters most when there is a broad range of possible outcomes."

Now that you have an offer in hand, it may be time to negotiate. Malhotra shares his best advice for how to handle a salary counteroffer like a pro.

1. Be firm and persuasive

"Don't just state your desire (a 15% higher salary, say, or permission to work from home one day a week); explain precisely why it's justified (the reasons you deserve more money than others they may have hired, or that your children come home from school early on Fridays). If you have no justification for a demand, it may be unwise to make it."

2. Be serious

"If you intend to negotiate for a better package, make it clear that you're serious about working for this employer."

3. Consider both sides

Malhotra said:

4. Be honest

"My advice is to never lie in a negotiation. It frequently comes back to harm you, but even if it doesn't, it's unethical."

5. Think beyond the cash

"Don't get fixated on money. Focus on the value of the entire deal: responsibilities, location, travel, flexibility in work hours, opportunities for growth and promotion, perks, support for continued education, and so forth."

6. Submit your counter all at once, not piecemeal

Malhotra continued:

7. Remember this is not reality television -- you are not on The Apprentice

"Resist the temptation to prove that you are a great negotiator. Fighting to get just a bit more can rub people the wrong way -- and can limit your ability to negotiate with the company later in your career, when it may matter more."

8. Avoid giving ultimatums

Malhotra said:

This article originally appeared on Glassdoor.com.

The $16,122 Social Security bonus most retirees completely overlook If you're like most Americans, you're a few years (or more) behind on your retirement savings. But a handful of little-known "Social Security secrets" could help ensure a boost in your retirement income. For example: one easy trick could pay you as much as $16,122 more... each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we're all after. Simply click here to discover how to learn more about these strategies.

The Motley Fool has a disclosure policy.