Just How Negotiable Is the Salary?

As a candidate you may wonder just what flexibility the company has in meeting your salary requirements. If the job and the company look great, but the salary is not quite what you’re looking for, what options do you have?

Some people believe that companies are generally out lowball you. That is, since your goal is to get the highest offer possible, their goal is conversely to offer the least money possible. That’s not exactly true. Factors such as prevailing pay levels within and outside the company play into the calculation, but mostly it’s a matter of how much money has been budgeted for the position.

Hence in most cases the company has a certain figure in mind they want to pay, and they may be unwilling to go above that amount. However, this does not preclude the possibility of negotiating a higher salary. If they like you as a candidate, chances are they can find some way to meet your requirements.

For one thing, the company may have determined the salary based on what the previous person in that position was making. Or if there was no previous person, they may have based it on an estimation of the market pay for the position. And in both cases they will generally undershoot the market, because the market price tends to run ahead of most internal pay structures. Hence when the company starts interviewing candidates and seeing that most of them have salary requirements above what they are expecting, they may come to their senses and be more flexible (though then again, they might not).

Regardless of the company’s attitudes towards market adjustments, they may still be willing to stretch for a great candidate. Sometimes the salary cap might be a soft one, requiring only senior management approval to exceed. In other cases they’ll leave a little bit of room below the ‘actual’ cap when making an offer, in anticipation of forthcoming negotiation.

Even with a hard salary cap the company might be able to reclassify the job req as a higher level one (e.g., from “Software Engineer” to “Senior Software Engineer”), with a commensurately higher pay cap. Also, if they have several job reqs open at once, as is typical at a larger company, it’s relatively easy to swap one job req for another. They may even be able to combine two low level job reqs into a single higher level one.

The point here is that you should not view the company’s offer as a take it or leave it proposition. In most cases there is room for negotiation, and if the company really wants you they can get creative in finding you more money.

However, one thing you should never do is to accept a mediocre salary with the promise of an early salary review to bring the pay back up. I’ve been told this story at least twice in my career, and the early reviews never materialized. People forget, or else they make these promises without the ability to fulfill them. So you know what they say about the bird in the hand…