To Be Or Not To Be by Frank M. Jay

Note:  This is the second in a series of articles regarding the negotiating of an employment offer.

You have just received an employment offer from a potential employer. 

After an extensive interview process, they have called to let you know that they have chosen you as the candidate that they would like to hire.  After calling and discussing their offer with you by phone, they have followed up by sending you a formal offer letter by email and they have asked that you confirm your acceptance or rejection of their offer by calling them on the following workday at 10:00 AM.  Since they have made their offer on Friday afternoon, your response to them by phone will be due on the following Monday morning.  That will give you time to discuss the details of the offer with your family before responding.

In general, you like the offer.  But, there are several issues that concern you and they are:

1). Even though the position offered is a definite increase in responsibility and title, the salary offered is only 20% higher than your current salary.  Such an increase might be reasonable if all other factors were equal but you will be moving to a city with a higher cost of living…which will eat up approximately half of the proposed salary increase.  That means that you will only “net” a 10% increase in salary and that seems like a lower amount than you should receive.

2). Your future employer has offered compensation for relocation by providing a “lump sum signing bonus” that is meant to compensate you for movement of your household goods and furnishing, “in transit” expense for you and your family, and temporary living expenses for ninety days.  The problem is that you will be moving half way across the country and you have confirmed that moving costs will be 25% more than the “relo” package provides in reimbursement.  Additionally, you know that the lump sum bonus will have to be taxed as gross income which means that the amount provided to you will be considerably reduced in total net payment.

3). You have been with your current employer for ten years and you now receive four weeks of vacation.  Your future employer knows this and has taken a step to meet your needs by initially providing three weeks of vacation even though their formal policy is two weeks after the first year of employment.

4). Regarding health care insurance coverage, your new employer requires a “waiting period” of sixty days before a new employee can start “coverage”.  That means you must pay for “COBRA” coverage via your current employer (which is expensive) or forego healthcare coverage for your family during that time.

5). Your new employer wants you to give notice and start work two weeks thereafter.  Your concern is that you are right in the middle of a project and you believe that you should give your current employer six weeks notice.

These are all important issues in your opinion.  Accordingly, you discuss them with your family and you spend a good deal of time considering the offer in detail and in general.  Your family is receptive to the move in general and they weigh in regarding your concerns.  After providing input, your family leaves the decision in your hands.  Its up to you to decide how to proceed in regard to each issue and to determine the order of priority.  After much consideration, you propose the following changes to the offer and in the following order:

      1). Salary increase should be 30% instead of 20% above current salary.

      2). Relocation reimbursement should be increased by 25%.

      3). Vacation time offered should be increased to four weeks.

      4). Waiting period for healthcare coverage should be waived or COBRA costs should bepaid.

      5). You request that you be allowed to give six weeks notice to your current employer.

On Monday morning, at 10:00 AM, you phone your potential employer to state your requests and to discuss them.  Discussion leads to an immediate counter.  They respond to your demands regarding salary by offering a second signing bonus equal to an additional 15% annual increase in salary…and, while they won’t increase the relocation reimbursement, they say that they will “gross” up the relocation reimbursement payment…which means they will increase the amount to cover what you will have to pay in taxes.  Regarding vacation time, they say that their company policy will not allow that much vacation initially for your position level and they are sticking with three weeks.  Regarding healthcare coverage, they say that they will “waive” the waiting period.  Finally, they say that they are desperate to fill this position and that they have to stick with two weeks notice.  They ask you to consider their counter and get back to them no later than the next morning…again at 10:00 AM.

After discussing the potential employer’s counter offer with your family, you decide that the second signing bonus meets your need for improvement from the salary standpoint, that the “gross up” on the relocation reimbursement should give you “coverage” on your moving expenses, and that you can forego the fourth week of vacation. Since they have waived the waiting period regarding the start of health insurance coverage, your only problem left is the formal start date.  After some deliberation, you decide to propose a start date that will allow not six weeks notice, not two weeks notice…but (30) days notice…and you pick up the phone to call your future employer to discuss your counter proposal.

In our August newsletter article, we will confirm whether the future employer accepts or rejects the offer…or counters the offer again.  Also, we will analyze the negotiation process and the results.