Question
I interviewed for a position at a manufacturing plant and had an excellent rapport with the CEO who interviewed me. The location of the company is not exactly what I’m looking for. The area is quite depressed but the job is just what I’m looking for. In terms of sales and size of staff, it would be a next step in my career. But I need help with a low salary offer.
The salary is 20% less than my last position. I have been unemployed for two weeks, am in my early 50’s, and did not complete my degree. This has not been a problem for me in previous positions.
The CEO asked me to think about it over the weekend and call him next week if I have any ideas that could bring us closer to an agreement as salary is the only barrier to a job offer. He asked that I don’t accept the position unless I could be happy for the long haul.
I really would appreciate your advice. Forget to mention that I work in finance and the position is for a plant controller.
Nick’s Reply
You’re dealing with a smart CEO. He sounds open to discussing what kind of terms (other than salary) you’re going to be happy with.
First you have to decide whether the location is a deal-breaker for you. Don’t let that come back to plague you as you negotiate other aspects of this deal.
Talk about a low salary offer in person
Regarding the money, I’d open a discussion with him. Don’t play a negotiating game, sea-sawing between his number and yours. Be honest and direct. But here’s what I think is crucial: do it in person, not on the phone. This is important, and you’ll have more bargaining power if you’re sitting with him. Your physical presence will remind him of the commitment he’s already made to you and it will reveal how serious you are about wanting the job if the terms can be worked out.
Let him know the comp is 20% lower than you’ve been making. Also let him know that you respect limits he’s got in his budget, and that otherwise this is a dream job for you.
Can you compensate for low salary?
This is where you need to start a dialogue about the terms. Find out how he might make up part of the 20% salary difference with a starting bonus, performance bonus, profit-sharing, stock, extra PTO and vacation time, flex hours or remote work, commuter benefits, gym memberships, and other perks.
Also discuss how long down the road you might be able to get back up to par, assuming you weren’t “overpaid” at your last job.
Justify higher pay
If you want to try to boost the salary, don’t just ask for more! Justify what you’re asking for.
Base your discussion of compensation over the long term on how you think you can contribute to the company’s profitability. (He’ll love your concern for his success.) Show the CEO how you’re going to pay for your own raise though your productivity. Talk dollars — and talk about the measurable differences you can make to the business.
This will take some figuring on your part, but I’ll bet if you can help analyze the bottom-line improvement you’ll be able to make over, say, a year or two, he might be willing to build some performance incentives or guaranteed salary increases into your comp package.
Don’t take a stand; discuss options
Don’t “make a counter-offer.” Have a back-and-forth. For example, “What are some performance milestones for the job? How do you view bonuses based on meeting targets?” and “Would you consider an accelerated performance review schedule?” Make it clear you’re hoping to fashion a custom deal that will pay off for both you and the company.
One caution: there’s a difference between getting a higher salary and getting incentives. One affects your base and one doesn’t. Salary affects other things, like life insurance benefits, pension contributions, etc. If you work out a “future increase” deal, make sure the criteria are simple, clear, easy to measure objectively, and in writing.
Get past a low salary offer and get to a win-win
I think you have someone here who’s willing to play ball, if you do the work to come up with some options that are honestly good for both of you. You may even get him to a higher salary! But realize that he really may face limits on what he can spend and that you probably won’t be able to get much more salary. But his indication that your long-term happiness is important suggests he sees you there for the long term. So think and plan for the long term, and help him do so, too.
Negotiating a low salary offer doesn’t have to be done across an adversarial table. You can sit down and hash through a deal like partners, with the objective a win for both of you. “We’re going to be married, essentially, if I take this job. So let’s sit down like a married couple and work out a budget — my salary and your profitability — that we’re both going to be happy with years down the road.” That might sound overly candid, but I don’t think there’s enough friendly candor in the world of business. If you can turn the “negotiation” into a discussion, you’ll change the interview into a working meeting.
Use your best judgment, but work with the CEO on this. Learn what he needs and help him to work with you by justifying the compensation package you’re discussing. I wish you the best!
See also Can’t negotiate a higher salary? Ask for more money.
Can this job opportunity be salvaged? How have you dealt with a low job offer? Is there a difference between “negotiating” salary and candidly discussing options? What would you do in this situation?
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Low salary offers can be due to budget constraints (only so much money in the pot) or it could be “can we get you as cheaply as possible and work you to death.” I’ve seen it both ways. I think Nick’s advice is good—talk shop, how you can help and see what happens. I know what it’s like to be unemployed and needing to find a job, but don’t let the first job train that rambles down the track entice you if it won’t be a good fit for you and the company the long run.