How much higher % to counter on job offer?

[Schfifty Five]

From my experience.
Year one bonus was nice and they kept their word. Year 2 and 3 it was much smaller because of excuses. So keep that in mind. It took me 5 years to get back to what I made in year one after the bonus.
In hindsight I should never have taken the position.
Oh and I believe bonuses are taxed at a higher rate than your salary.

I'm not sure about state tax laws, but I'm pretty sure at the federal level, bonuses are still treated the same as any other income. I think it defaults at being taxed at 25% (in my experience here in TX), but you literally could change your W-4 withholdings right before the bonus and have $0 taxes taken out if you wanted.

 

[Schfifty Five]

I guess it all comes down to if my current salary is inflated or average relative to what other people in my profession with my experience make.

I think I am going to push back on it a little bit and ask them how much the typical range for the yearly bonus is. If I could find a place to live that's closer to that $200 more expensive per month than what I pay now, I think getting an extra 2% of out of them on my base could be sufficient to not cut my cashflow.

Honestly, you shouldn't really matter. That's what you earn, period. It's not like you get are paid $100K but it's really only worth $80K. $100K is $100K (arbitrary number, don't know what you make).

So stick to that and be confident about what you want in your salary.

Regarding them saying "well the bonus makes up for it...", did you get a bonus at your current company? If you do, then what they say is completely moot. You should shoot back with, ok well my current salary plus bonus is $XXXXXXX, and I want a 17% raise from that amount.

 

[dank69]

The biggest issue with my current job is intangible. It's such a specific niche industry that the longer I stay here, the harder it is to ever leave. This new company would have me doing much more of a "generic" thing, so if I wanted to move again in a few years, I personally think it would be much easier.

I want to trust this company. I tend to naturally be an a person who does not trust executive people easily. The president of the company told me that in his entire 25 years at this place, only 2 people have ever left (other than retirement). The Exec. VP told me in his 14 years there, they haven't missed a bonus once.... Again, how much this is apparently depends on performance, etc.

I'd hate to miss a good opportunity because of a few grand, but I also don't want to substantially cut my cash flow. With out the bonus of any type, it's looking like my monthly cashflow (assuming I had a roommate) would go down by about $100-200, mainly due to higher rent.

Based on the fact that you don't need this job, I wouldn't accept anything lower than your original asking price. Politely decline.

 

[skimple]

It is reasonable to ask for a written offer which specifies exactly how much you will receive at year-end, assuming that you still work there. Then it becomes a "signing bonus", which isn't payable until you've been there 9 months.

I recently took a position that was lower salary with a "promise" that they would get me back to my normal salary within two years. I negotiated that they would give me a signing bonus the first year that would make up the difference between what I was making and what they offered. They split the bonus into three payments (25% in first check, 25% after 3 months, 50% after 1 year).

I think you can be firm that you can't make a decision if you don't know exactly what the financial impact will be.

 

[gorcorps]

I guess it all comes down to if my current salary is inflated or average relative to what other people in my profession with my experience make.

I think I am going to push back on it a little bit and ask them how much the typical range for the yearly bonus is. If I could find a place to live that's closer to that $200 more expensive per month than what I pay now, I think getting an extra 2% of out of them on my base could be sufficient to not cut my cashflow.

Honestly, you shouldn't really matter. That's what you earn, period. It's not like you get are paid $100K but it's really only worth $80K. $100K is $100K (arbitrary number, don't know what you make).

So stick to that and be confident about what you want in your salary.

Regarding them saying "well the bonus makes up for it...", did you get a bonus at your current company? If you do, then what they say is completely moot. You should shoot back with, ok well my current salary plus bonus is $XXXXXXX, and I want a 17% raise from that amount.

Agreed, it doesn't matter if your current salary is higher than average. If it's important that you have the same take home money, then that needs to be pointed out. It's up to them if they can swing it or not.

 

[z1ggy]

So I received my written offer. Just to maybe makes things easier so everybody understands my POV and the companies POV, I am just going to list out the numbers. I wanted to avoid it due to people flaming, but whatever.

I currently make $81,500 and usually get a 4% raise each July, in addition to a 750-1500 dollar bonus each December. I asked this company for $95,000 base due to higher cost of living, the anticipation of a 6% (higher than normal) raise, and then an additional few thousand on top of that all.

They came back with $83,000 base and a $12,000 guaranteed bonus, but prorated assuming a May 1 start date of $8,100. So basically they tried to prove to me they'd be willing to pay me $95k a year, but that basically 15% of it would be due to bonus, and not base pay. Additionally, for years 2 and beyond, that $12k bonus is not guaranteed, but they do give year raises to the base pay.

I personally was looking for advice as to if it was reasonable to ask for more money considering this state is actually on the whole 5-8% more expensive to live in, and that base of $83k is only 3% higher. I'd much rather make as high of a base as possible with no bonus, but apparently that's not how they operate.

 

[TheGardener]

Any differences in benefits? Have you checked out their 401k plan and compared it to your current employer? How much do they contribute toward medical? Etc.

 

[purbeast0]

What city/state is it?

When I was long in SD the salaries on glass door and salaries.com didn't match most ranges I was finding, which surprised me. Even had some companies flat out say they don't pay as much because SD is so nice and the desire to move there is high.

Edit:

And no based on those numbers it is not unreasonable to ask for more. That is a lowball offer like shit imo.

 

[Subyman]

I'd be a bit worried about the "bonus." Seems like it isn't set in stone. A new company could look to cut costs at the end of the year if they aren't hitting projections and the first thing to go are expectations not put in writing. It would be more acceptable if they guaranteed the bonus.

EDIT: I see you said it was a guaranteed bonus only for the first year. Ugh. Sounds sketchy IMO.

 

[dr150]

Look at websites like Glassdoor (the best) or Salary.com.

They do a pretty good job in nailing down what the "going rate" for salaries will be in your chosen field and region (i.e. Dallas won't pay the same as SF, for instance).

Look at competing companies salaries as well to get a flavor of the "salary bandwidth."

There should be absolutely no shame in negotiating at the very, very high end of that bandwidth and then settling for something lower. Go for high and negotiate down. Don't start mid and then lower, b/c it'll always settle lower. It's like a court case....ask for a billion and settle for $5 million.

Also if you had RSUs at your old job, ask for that to be matched as well, apples to apples.

And always propagandize by talking highly of your desire to work there. Always pet the dog until the dog wags its tail. Negotiation is human emotion and them liking you a lot can get you that extra $5k or whatever in salary.

 

[KIAman]

So I received my written offer. Just to maybe makes things easier so everybody understands my POV and the companies POV, I am just going to list out the numbers. I wanted to avoid it due to people flaming, but whatever.

I currently make $81,500 and usually get a 4% raise each July, in addition to a 750-1500 dollar bonus each December. I asked this company for $95,000 base due to higher cost of living, the anticipation of a 6% (higher than normal) raise, and then an additional few thousand on top of that all.

They came back with $83,000 base and a $12,000 guaranteed bonus, but prorated assuming a May 1 start date of $8,100. So basically they tried to prove to me they'd be willing to pay me $95k a year, but that basically 15% of it would be due to bonus, and not base pay. Additionally, for years 2 and beyond, that $12k bonus is not guaranteed, but they do give year raises to the base pay.

I personally was looking for advice as to if it was reasonable to ask for more money considering this state is actually on the whole 5-8% more expensive to live in, and that base of $83k is only 3% higher. I'd much rather make as high of a base as possible with no bonus, but apparently that's not how they operate.

I'm assuming you are still very actively looking for a new job and that you still have feelers out there and putting in a decent amount of daily time to that effort. I'm also assuming you've including benefits into this equation (insurance cost, 401k matching, vacation days other perks like education, health). Final assumption is that you looked at the city and not just the state for the COLA calculations.

With that said, I'd turn down this job based on this information for several reasons.

1. You are currently working, even though it's a shit job (your words), it is low risk and stable until you find something better.

2. This isn't the only opportunity that will come your way. Don't act like this is a once in a lifetime opportunity. If you are going with my assumptions, there will always be somebody out there looking for somebody like you.

3. You have to move for this job? Yeah, I'd factor in the cost, risk and pain-in-the-ass of moving even higher on the required compensation to make it worthwhile.

4. If you told them everything in the quote and they came back with their numbers, they either simply don't see your value or don't see the value in the position itself. Assuming you are a stellar employee with an amazing work ethic, they simply cannot see that or the position itself just doesn't need someone amazing, just someone ok.

5. If it's the fact they don't value their position they are hiring that high, convince them of your value and get them to offer you a higher level position instead. Persuade them that having you on board is very valuable to their company and your level of productivity will pay off.

6. When declining their offer, make it gracious and professional, never burn bridges. "I've strongly considered your offer and I am very grateful for your time. I must turn it down as it does not meet my minimum salary requirements. If at any time in the future you should reconsider the offer or a position with the required salary comes, I would be more than happy to consider it once more.

 

[Scarpozzi]

Bonuses are never guaranteed. My wife was promised a 10% bonus when she started and by the second or third year with maternity leave, she ended up getting shorted significantly... Like, rather than a 10% bonus, she was given a 3% bonus for missing a month of work. This past year, she got a 20% bonus though...so sometimes it works out if the employer wants to retain you.

Now...for the salary vs bonus pay structure, they are either doing that to hold the bonus over your head for performance or they are doing it to keep your salary in check with the other employees in your job level/role. It looks like they're working with you, but like I said....it depends on how much trust you have in them to treat you well in the future. "Guaranteed bonus" language, to me, seems to contradict itself by logic. The bonus is a tool used by managers to increase performance and HR to deflate their yearly minimum salary payments. Bonuses go away quickly when a business needs cash quick.

 

[Naeeldar]

Numbers make it easier. Sounds like the counterpoint is to ask for a base of $88k. 10% is typically what you look for when switching jobs. Bonus is somewhat irrelevant and an extra $5k shouldn't really scare them off that much.

 

[Schfifty Five]

What city/state is it?

When I was long in SD the salaries on glass door and salaries.com didn't match most ranges I was finding, which surprised me. Even had some companies flat out say they don't pay as much because SD is so nice and the desire to move there is high.

Edit:

And no based on those numbers it is not reasonable to ask for more. That is a lowball offer like shit imo.

It's not reasonable? Or not UNreasonable?

To me, it's more than reasonable for him to ask for more money.

 

[Schfifty Five]

So I received my written offer. Just to maybe makes things easier so everybody understands my POV and the companies POV, I am just going to list out the numbers. I wanted to avoid it due to people flaming, but whatever.

I currently make $81,500 and usually get a 4% raise each July, in addition to a 750-1500 dollar bonus each December. I asked this company for $95,000 base due to higher cost of living, the anticipation of a 6% (higher than normal) raise, and then an additional few thousand on top of that all.

They came back with $83,000 base and a $12,000 guaranteed bonus, but prorated assuming a May 1 start date of $8,100. So basically they tried to prove to me they'd be willing to pay me $95k a year, but that basically 15% of it would be due to bonus, and not base pay. Additionally, for years 2 and beyond, that $12k bonus is not guaranteed, but they do give year raises to the base pay.

I personally was looking for advice as to if it was reasonable to ask for more money considering this state is actually on the whole 5-8% more expensive to live in, and that base of $83k is only 3% higher. I'd much rather make as high of a base as possible with no bonus, but apparently that's not how they operate.

Ziggy, it sounds like you are nervous or scared about asking for more money. What's the worse that could happen? They can say no, sorry this is all we can offer, and then you decide if you want the job or not. Sure they can rescind the offer, but that would be highly unlikely if the reason they rescind is b/c you countered.

Stop selling yourself short and just be confident in what you want. Don't justify that their offer is ok b/c they give you a $12K (albeit prorated) bonus.

Bonuses are nice, but like others said not guaranteed (year 1 for you yes, but after, cna't rely on it). If you feel you should get $95K base + bonus, then counter with that.

It really sounds like you're just trying to convince yourself to settle with this offer in order to not have to deal with counter offering.

 

[purbeast0]

It's not reasonable? Or not UNreasonable?

To me, it's more than reasonable for him to ask for more money.

definitely meant "not unreasonable".

 

[MixMasterTang]

Did they provide you any specifics around the bonus? Like the company must meet it's financial goals of $x millions of revenue, "You must bill out 80% of your time" or "If your projects are completed on time you will receive X"? From what I've noticed from companies that tout bonuses most people are unlikely to reach the max amount if any at all. I usually tell people if I wanted a decent percentage of my salary to be in bonus form I would go into sales and work on commission (which I don't want to do).

 

[z1ggy]

There's been quite a few replies since I last checked the thread. Thank you all. I've elected to respond to the most critical ones since I last responded.

What city/state is it?

When I was long in SD the salaries on glass door and salaries.com didn't match most ranges I was finding, which surprised me. Even had some companies flat out say they don't pay as much because SD is so nice and the desire to move there is high.

Edit:

And no based on those numbers it is not unreasonable to ask for more. That is a lowball offer like shit imo.

It's in NJ, near Newark.

Like I said, based on what I make and where I currently live, $88k is the adjusted salary based on https://www.nerdwallet.com/cost-of-living-calculator/compare/hartford-vs-newark-elizabeth .So essentially, $88k is really the bare minimum I should take.

Look at websites like Glassdoor (the best) or Salary.com.

They do a pretty good job in nailing down what the "going rate" for salaries will be in your chosen field and region (i.e. Dallas won't pay the same as SF, for instance).

Look at competing companies salaries as well to get a flavor of the "salary bandwidth."

There should be absolutely no shame in negotiating at the very, very high end of that bandwidth and then settling for something lower. Go for high and negotiate down. Don't start mid and then lower, b/c it'll always settle lower. It's like a court case....ask for a billion and settle for $5 million.

Also if you had RSUs at your old job, ask for that to be matched as well, apples to apples.

And always propagandize by talking highly of your desire to work there. Always pet the dog until the dog wags its tail. Negotiation is human emotion and them liking you a lot can get you that extra $5k or whatever in salary.

So this company is extremely small, I'm not sure if they are on Glassdoor, I will have to look. I also don't think this job title matches what industry typically associates the title with. It's for Application Engineer, which has nothing to do with computer applications... So finding comparable salaries in the state/nation has been hard.

I'm assuming you are still very actively looking for a new job and that you still have feelers out there and putting in a decent amount of daily time to that effort. I'm also assuming you've including benefits into this equation (insurance cost, 401k matching, vacation days other perks like education, health). Final assumption is that you looked at the city and not just the state for the COLA calculations.

With that said, I'd turn down this job based on this information for several reasons.

1. You are currently working, even though it's a shit job (your words), it is low risk and stable until you find something better.

2. This isn't the only opportunity that will come your way. Don't act like this is a once in a lifetime opportunity. If you are going with my assumptions, there will always be somebody out there looking for somebody like you.

3. You have to move for this job? Yeah, I'd factor in the cost, risk and pain-in-the-ass of moving even higher on the required compensation to make it worthwhile.

4. If you told them everything in the quote and they came back with their numbers, they either simply don't see your value or don't see the value in the position itself. Assuming you are a stellar employee with an amazing work ethic, they simply cannot see that or the position itself just doesn't need someone amazing, just someone ok.

5. If it's the fact they don't value their position they are hiring that high, convince them of your value and get them to offer you a higher level position instead. Persuade them that having you on board is very valuable to their company and your level of productivity will pay off.

6. When declining their offer, make it gracious and professional, never burn bridges. "I've strongly considered your offer and I am very grateful for your time. I must turn it down as it does not meet my minimum salary requirements. If at any time in the future you should reconsider the offer or a position with the required salary comes, I would be more than happy to consider it once more.

1) I agree. Problem is the reason it's shitty is not only because of shit management but because it's so niche and it literally makes you obsolete to industry if you stay here long enough. The longer I stay, IMO, the harder it will be for me to leave. Just sayin'.

2) One other factor I consider is that this job is close to my g/f. We broke up a little while back due to distance issues (She is three hours away right now) so the longer we stay apart, the harder it is on us. I totally agree with your statement though, there are plenty of other jobs out there.

3) Moving should be minimal. I'm planning on selling/donating/trashing all my stuff because I would be moving in with my g/f.

4) Basically their statement was, "We understand and respect your number. the $83k +12k bonus will get you to your $95k per year number. We just offer lower base pay and bonuses at the end of the year." However, I tecccchhhnically might not make $95k between this May and next May. I might only get ~93k since I won't be getting the full $12k bonus.

5) I think I did that in my interview. I'm not totally sure what else I can say that I didn't before... I'll have to think on this one.

6) Absolutely. Even at this job, there's a few people I hate working with. I'd never bad mouth them when I leave because who knows, I could come back at some point for any number of reasons.

 

[jlee]

Heh, I moved to NJ 6 months ago for a job and was in a similar situation, except my previous salary (and cost of living) was lower. I was offered a base salary plus a $10k bonus for the first year. We settled at their initial offer plus $10k, but no signing bonus. It was the same initial outlay for them, but a guaranteed +$10k/yr down the road for me.

If this is an "everybody gets an annual bonus" situation you may not be able to negotiate it, but I would argue for a $95k base with no bonus for the first year.

Keep in mind that, while a bonus may give you your total annual number, your 401k match (and raises) are likely going to be based off of your base salary. Having a higher base with a lower bonus is generally superior.

 

[z1ggy]

Heh, I moved to NJ 6 months ago for a job and was in a similar situation, except my previous salary (and cost of living) was lower. I was offered a base salary plus a $10k bonus for the first year. We settled at their initial offer plus $10k, but no signing bonus. It was the same initial outlay for them, but a guaranteed +$10k/yr down the road for me.

If this is an "everybody gets an annual bonus" situation you may not be able to negotiate it, but I would argue for a $95k base with no bonus for the first year.

Keep in mind that, while a bonus may give you your total annual number, your 401k match (and raises) are likely going to be based off of your base salary. Having a higher base with a lower bonus is generally superior.

Agreed.

Been thinking about it and I think I'm going to counter back with $88k base and 4.1k total bonus guaranteed in December. It's the exact same amount paid to me over the 8 months I'd work there in 2016, but I'd benefit more on the higher base. I'm also going to ask for 8 days of vacation instead of their shitty 5 days that were offered.

I know a lot of you guys said I shouldn't budge and I should keep on my $95k base and I see your point of view. However, I do really want out of this job badly, it's a trap. I will stand my ground at $88 though seeing as that's simply just recouping my COL upper.

 

[purbeast0]

if it were me, i would not just take $88k base. like you said, that's basically a lateral move. they are giving you absolutely 0 incentive to switch positions.

you are coming off as being a bit desperate though, which may have showed through to the company interviewing you, so they may know that you will accept a lowball offer. as mentioned earlier, you have to go in with the mindset that you are the one doing the company a favor for working there, not the other way around. you sound like they are doing you a big favor for making you a lowball offer.

when switching jobs, as long as you aren't just job jumping every few months, you should expect at least a 10% increase in pay. at least at the range you are at, maybe not when you get into the upper 100's though since that 10% can become quite a bit more.

 

[jlee]

Agreed.

Been thinking about it and I think I'm going to counter back with $88k base and 4.1k total bonus guaranteed in December. It's the exact same amount paid to me over the 8 months I'd work there in 2016, but I'd benefit more on the higher base. I'm also going to ask for 8 days of vacation instead of their shitty 5 days that were offered.

I know a lot of you guys said I shouldn't budge and I should keep on my $95k base and I see your point of view. However, I do really want out of this job badly, it's a trap. I will stand my ground at $88 though seeing as that's simply just recouping my COL upper.

Ouch, only one week PTO? Based on that and their low offer, I'd be shopping for other opportunities! At least tell them you want two (if not three or four) weeks of PTO. One is absurd.

 

[CuriousMike]

Your work performance and motivation needs to be tied to the job at hand, not bonuses and salary. Bonuses ( and their promise ) are short-term sticks that never actually lead to improved quality/productivity.

It's important that whatever salary you agree to, that you internally agree to.

You don't want to start the new job and have salary on your mind.

That's really been my only go to strategy when I've talked salary; "At this number $X, I'll be happy and feel fairly compensated. Less than $x, and I can't make it work. It will be unfair to you because if I take $x-1, it could impact my overall happiness at work and that will inevitably impact my performance."

 

[purbeast0]

Ouch, only one week PTO? Based on that and their low offer, I'd be shopping for other opportunities! At least tell them you want two (if not three or four) weeks of PTO. One is absurd.

LOL holy shit i did not even see that. that right there would 100% be the deal breaker. i'll never work somewhere that gives less than 4 weeks of pto. right now i have 27 days but i know that's not normal so i have to be realistic if i do find a new gig.

 

[Schfifty Five]

Ouch, only one week PTO? Based on that and their low offer, I'd be shopping for other opportunities! At least tell them you want two (if not three or four) weeks of PTO. One is absurd.

Your work performance and motivation needs to be tied to the job at hand, not bonuses and salary. Bonuses ( and their promise ) are short-term sticks that never actually lead to improved quality/productivity.

It's important that whatever salary you agree to, that you internally agree to.

You don't want to start the new job and have salary on your mind.

That's really been my only go to strategy when I've talked salary; "At this number $X, I'll be happy and feel fairly compensated. Less than $x, and I can't make it work. It will be unfair to you because if I take $x-1, it could impact my overall happiness at work and that will inevitably impact my performance."

LOL holy shit i did not even see that. that right there would 100% be the deal breaker. i'll never work somewhere that gives less than 4 weeks of pto. right now i have 27 days but i know that's not normal so i have to be realistic if i do find a new gig.

Ziggy, listen to these posts. You really sound like you are just settling or selling yourself short. Probably/mainly due to you hating your current gig.

Even though you've ask for our opinion, and ultimately the decision is yours, it sounds like you already made up your mind coming in here (which again is your decision to make). But you owe it to yourself to make sure you are happy with the compensation. Compensation that's fair according to your standards, not theirs.