Many times, a layoff means that larger companies will allow employees to apply for other roles. Some employees will find ways to stay at the company, avoiding the chaos of job loss. For some, that also sparks the fear of loss of negotiating power as one of our members saw:
So here’s my situation, my company laid off a large number of people including myself. In the same breath, they invited us to apply for any open positions, which I did. They made me an offer yesterday. Here are my questions for the group:
1) Have I lost a lot of negotiating power since they essentially know that if I don’t accept their offer, I will be unemployed? Although they don’t know what other opportunities I have in the works.
2) When they made the offer, they told me they couldn’t offer me more because I currently make more than the incumbent. I’m not sure if they meant the other candidate or someone else in the same role who is already with the company.
This seems weird that they would use this as their reason. I’m confused because how is someone else’s worth dictating mine and why would they tell me that? I know behind the scenes they may consider that, but seems odd to tell the candidate that. I would love to hear opinions on their rationale for not coming in higher and what, if anything, I should do next. I don’t want to push too hard since I am interested in the position, and hope things work out so I can accept.
Negotiation is a wary area for many professionals and garners numerous opinions, as this thread did.
Some urged caution and provided the potential that another offer could provide:
Internal parity is a real thing for some companies, i.e. if someone has been in the role for 10 years and they are making $50k, the company isn’t going to risk offering a new person more or much more than that because eventually talk happens and the incumbent will become dissatisfied when they learn they are underpaid. Usually this means the company is okay with paying its employees lower than market rate, which in my opinion is a bad practice (but of course not all companies have abundant resources to pay above market). You may be able to negotiate with using another offer, or if you don’t have anything lined up, it may be worth it to take it and then keep looking for a new job.
Others saw the job offer as a way for the company to buy more time:
It is the company’s way of buying more time. Take the severance and get another job. If they did not consider keeping you on board this time round, what is the guarantee that they will next time.
Another member felt like opportunities could be found in other parts of the offer, including benefits:
I would say that it would be good for you to ask some clarifying questions / get more info as to what is possible on the employer’s end. Sounds like they’re trying to pay lower than market rate, which, if so, you’ll have to think about should you really want the job. I always say that there is room for negotiation. So try to find out what that room looks like. Even if it’s not monetary, see if there are other things (more vacation / sick time, 401k, etc.) that you can obtain.
One of our career coaches felt like being at the upper bounds of the budget was reason enough not to budge:
They essentially told you that you are already above their normal budget. Unless you are OK with them potentially pulling the offer, I wouldn’t try to negotiate in this situation. I’m professionally trained in negotiating and have been a hiring manager for several large teams. I’m a big believer in always negotiating, but not in your case due to the details you described.
The Albert’s List Take
When it comes to the topic of negotiation, we often defer to our experts in the area, and our thoughts lie with them here:
- See what you can do to negotiate for benefits if salary is no longer an option.
- If you feel like salary is no longer an area to work with and the company wants you, take the offer (or keep looking).
In all, our original poster took our advice to heart and made it clear what she wanted. She’ll let us know what happens.
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