It’s the moment you have been waiting for. A call from the company you have been interviewing with, and you hear the voice on the other end tell you they want to offer you the position. It’s a great feeling getting a job offer but the anticipation hasn’t subsided yet as you prepare yourself to hear what the compensation package being offered is.

Hopefully, there have been conversations about pay leading up to this with you and the company understanding at least a ballpark figure that would be acceptable. Still, as you hear it you can’t help but feel a little disappointed and wonder if you should counteroffer.

Maybe you thought they liked you so much that they would come in higher on the range you said you were comfortable with or perhaps you played it safe when you shared your salary expectations. So, now what?

First, let’s talk about the elephant in the room during the offer process because that darn elephant creates an impasse in communication far too often. Talking about compensation doesn’t come easy to many job seekers and it can be just as difficult, if not harder, for recruitment. There are several reasons for this.

On the job seeker side, the communication barrier is more obvious. As a candidate, with a job already, in the application process, you likely want to see some kind of increase from your current job, but you also want to be cautious of not asking for too much and immediately removing yourself from consideration.

With several states now passing pay transparency legislation, employers may be required to disclose pay upfront whether it be on the job posting or by request. Unless an employer is required to include pay on the job posting, there is a level of ambiguity, and it can be a tricky situation to navigate for the job applicant until and if they are selected for a pre-screen with a recruiter. Even then, there is a dance that often occurs between both parties around compensation expectations.

Things only get more complicated when the recruiter can only speak to a general pay range because there are likely several factors that go into how the pay rate is calculated. These factors can include years of experience, type of experience, and equity amongst the existing team of employees. Usually, a recruiter will not know on the front-end of the application process the exact pay a candidate would be offered and they will be intentionally vague to avoid having an upset candidate on the backend at offer. The last thing a recruiter wants to do is overpromise and underdeliver.

To add to these complexities, pay ranges typically have a built-in top-of-scale, especially at the individual contributor pay grade. This means employees can top out in a role and while there may be policies in place to guarantee those individuals still receive an annual merit increase it may be in the form of a lump sum payment and not a base pay adjustment. Recruiters are trained to be able to identify if a candidate would potentially be close to the top of the pay range with limited ability to grow within it. Unless the job candidate understands this and asks, they may not realize they are being offered close to or at the top of the pay range. Of course, a savvy recruiter will be honest about this offer and highlight the full benefits package and growth opportunities as well.

According to the Society of Human Resources Management (SHRM), the average time to fill positions in 2023 was 42 days. In the grand scheme of things, that doesn’t feel like a long time especially considering the pre-hire onboarding process; however, it speaks to the time investment recruitment puts into the hiring process for just one open position. As such, recruitment doesn’t want to lose a strong candidate that they have worked hard to take from the initial application to the offer stage.

The Counteroffer

On the one hand, you’re excited that your interviewers liked you enough to offer you the role but, on the other hand, the pay just isn’t what you were hoping for. What do you do now? Make sure to thank the recruiter or hiring manager and ask if they can send you information on benefits while you take some time to consider. You can always take time to consider but be respectful with a timeline for following backup.

You’ve been offered the role and salary expectations were discussed upfront, so the compensation package should be within your comfort zone even if on the low end of that zone – if not, you may need to walk away but keep in mind there’s no incentive for the employer to low-ball the offer after all the time and energy spent getting to that point. A low-ball offer is exceedingly rare, especially in a highly competitive job market. Now it’s time to determine how much you should counter for.

Whether you’re being offered a job that is a lateral move or promotion, you should always do your research to understand what the going rate is. Don’t just rely on your current salary to determine what you feel you should be compensated for. Once you know the average salary range for the role, you can better estimate how near or far the company is from that average. Always be sure to have data to support your request.

For a lateral move, your current salary is a good gauge to understand how close to the average market rate you are being paid and will guide you in making adjustments to your counteroffer. For instance, if you know you are currently paid in the low range for similar positions, it might be reasonable to request 10-20% higher.

If this is a promotion opportunity, there are several factors to consider in making a counteroffer. Your current experience is likely directly related to the role but there may be an aspect to the role that you have not experienced before such as having direct reports or leading a team. This may dictate how much you counter for but be willing to compromise as there could be additional perks in the total benefits package.

If you are moving from an individual contributor to a leadership role, it’s not unrealistic to expect between a 10-15% salary increase or more. Even then, if you are landing in the middle of the average range, requesting 5-7% in a counteroffer is reasonable.

Entry-level roles typically start closer to the low end of the range, so we recommend being more conservative with any counteroffer without any experience to leverage. You can quickly gain experience and move toward a mid-level role once you get your foot in the door. However, this is a great time to consider the overall benefits package the company offers and growth opportunities.

Whenever you are considering a counteroffer, it is important to do your research, be reasonable and willing to compromise, write down your non-negotiables, and be confident with your experience, knowledge, skills, and abilities. Be sure to be respectful and courteous throughout the process. By using this approach and following these principles you can create a lasting impression and one where all parties are happy with the outcome.