A few of my friends have had recent job transitions, and more than one has asked me “Should I negotiate?”

I’m shocked that people are still asking me this.

Yes. You should negotiate.

The actual question is in how to negotiate in an effective way. There’s a lot of wisdom on negotiation theory. For me, it’s been hard to apply that theory when it doesn’t seem applicable to an actual job offer.

This is the practical side of how I negotiate. It’s how I suggest my friends negotiate. I’m sure there are gaps — so comments and improvements are welcome!

1) Prepare.

You should already have a good idea what you want out of your offer before the offer’s on the table. You don’t need to know during phone call #1. You might make adjustments as you learn things about the company. By the time you’ve gotten to an all-day interview you should know what you’re looking for.

Some things to consider: Base Salary, Equity, Benefits (Health, Dental, Vision), Relocation Stipend, Signing Bonus, Flexible Hours/Work From Home Time, Vacation Time, Sick Time, Transit Benefits, Conference Travel, Educational Stipend.

The first few are the most important. Do your research. Especially if you’re switching disciplines. I’ve seen too many friends move into a technical roles with no understanding of market salary for developers.

The easiest way is to ask a friend who would know what’s reasonable for the field. “Hey, what do you think a junior operations associate should be making in NYC?” I try to ask a friend who is a hiring manager. “Hey, if you were hiring a PM (industry shorthand for Product Manager) into your team with about four years of experience, what do you think would be fair salary wise?”

If you don’t have a friend that you could ask, try other methods. Glassdoor has some salary information. If you’re in tech, AngelList has a tool to see a wide range of job offers. Fred Wilson has a nice post on employee equity expectations for startups.

Past that, I’d figure out which pieces are important to you and go from there. If you aren’t relocating, you won’t need a relocation bonus. Other benefits may just depend on the company. I’d never pick an offer based on if it paid for my subway fare or not. It’s just something to keep in mind.

Remember that benefits aren’t just about the dollar value. Kickstarter had a smaller educational stipend than Microsoft, but I got more value out of it because it was so easy to use.

Make sure you have an idea of what you’re looking for. Write it down for yourself. When you get an offer, you’ll already have a concrete idea of what you want to get out of your negotiation.

2) Do it in writing.

Negotiations make me nervous. Even when I prepare, I hate feeling like I need to make all my decisions on the spot. It’s also hard because it’s a pretty emotional thing — the company is putting a financial value on you!

I have pretty visceral reactions in compensation negotiations. I’d rather sit down and think them through when I don’t have all that adrenaline.

Your original offer might come over the phone. “So, Ellen, we’re going to make you an offer of $X and X shares. How does that sound?”

I push back on this to give myself time to think and look at my notes on my expectations. “Thanks for getting back to me! I’m excited for the chance to work at X. I’ll take a look through the paperwork when you send it over and let you know if I have any questions!”

This buys you the ability to go through the paperwork and start the negotiation on your own time. There’s no reason you should feel obligated to say “that sounds great!” or “ack that’s not what I expected!” immediately. Practice saying something neutral before you get on the phone to receive the offer.

(Some people might not struggle with this — if you’re great at negotiating on the spot, by all means, go for it! But this can make it a lot less intimidating, especially if it’s the first time you’re negotiating.)

3) Negotiate one piece at a time.

Once you have everything in writing, you can compare the package to what you need.

I negotiate in stages: base compensation, equity, everything else.

First, I look at base compensation. You should already have an idea of what you expect based on your research.

If it’s aligned with that, that’s great. Some people will say that you should still negotiate at that point — others say that if it’s fair you shouldn’t. That can go either way. If it’s a company that keeps salary tightly banded, and moves more on equity, then this can be okay to not negotiate.

If it’s not aligned with your needs, you should propose an alternative number. I always try to explain my rationale along with my ask. You don’t want to sound like you’re just asking for money for the sake of asking for it — you should have reasons.

A few I like:

- I was making X at my last role
- I was willing to take a bit less salary at my last role because <X> but for my next role I’m looking for <X>
- I will be making X after September in my current role
- The city I’d need to move to is X% more expensive

It’s not likely they’ll offer you exactly what you ask for. Instead, you’ll come to a figure somewhere between the two. Wait until you resolve the salary question before moving onto the next piece.

For equity & stock, I think Fred’s post is a good starting place for what to expect in a smaller company. In a larger company there tends to be a decent amount of leeway.

If you compromised substantially on base salary, Equity is a great place to see if the company has more flexibility. Since most equity vests over 4-5 years, it also shows more commitment to staying with the new role. You can even be honest about that — “since I came down with my salary expectations, would you be willing to give a bit more equity?”

After I’ve settled the first two, I move into everything else.

With my Microsoft offer, there wasn’t much leeway on salary or equity. The offer is (normally) the same for every college hire in the Office group. My hiring manager and I worked out a different compromise — the team sent me to a couple big industry conferences before I started. It was great for both of us — they had a more informed employee, and I felt cared about.

Don’t force a stepped negotiation on every single issue. That’s just obnoxious. Pick the pieces that matter most to you, and work around those.

4) Be thankful every step of the way.

You wouldn’t waste the time negotiating if the job isn’t a serious option for you. If it’s a serious option, you should be excited about the role!

You don’t want to jeopardize your relationship with your would-be future employer. The negotiation should come to the right place for you, and for the company. If you think you’re drastically underpaid, you’re more likely to be resentful. That’s not good for anyone. Both of you want an offer that you’ll be happy with.

A common fear I’ve heard is that negotiation could result in the offer being retracted. I honestly think that’s unlikely to happen as long as you’re polite and open to the discussion. (I’ve never heard of it happening, other than this WSJ article).

Still, the best way to avoid that is to make sure you’re thankful every step of the way. You never want to seem ungrateful. You’re trying to figure out something that works well for you and for the company! Be honest about what you need, and figure out a way to mutually get there.

Good luck!