Salary negotiation

What is salary negotiation?

A salary negotiation is a conversation between you and your current or potential employer regarding the salary (or rate of pay) for a specific job. The ideal outcome of this conversation is an agreement that both parties feel is fair. Salary negotiation is an agreement that considers the employee’s qualifications, experience and value to the organization. The employer considers many factors, including budgetary considerations and alignment with their compensation structure.

The employer’s priority is to hire and retain qualified staff without unreasonable cost to the organization, and your role is to emphasize your skills and experience and to demonstrate that your value to the organization is reflected in the compensation you’re asking for and aligned with industry standards.

It’s not just about the money

Salary negotiation is only one element of negotiating a job offer. In addition to salary, a company’s compensation structure may include other benefits (e.g., health insurance) and perks (e.g., flexible working hours). Sometimes, you may wish to negotiate other benefits like these (e.g. vacation days, remote work flexibility, or a signing bonus) to offset a salary that’s less than what you’re hoping for.

Why negotiate?

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Negotiation can benefit you long term

Negotiating a fair salary before accepting a job offer can set you up for success in the long term because your future performance or cost-of-living based salary increases often build on your initial salary. By deciding not to negotiate an initial job offer, employees can end up being under-compensated by approximately 10 to 20 per cent (Back & Laschever, 2003). In many organizations, salary increases/raises are calculated from an employee’s base salary, which means that negotiating at the time of a job offer can significantly increase earning potential over a lifetime.

Negotiating increases job satisfaction and communicates confidence

Beyond the financial benefits, negotiating is important to establish your sense of worth to yourself, the employer and the work you do. Being fairly compensated has been linked to higher rates of job satisfaction and productivity (Sitorus & Hidayat, 2023). So, it’s in the interest of an employer to ensure their employees are being compensated fairly. In many industries, salary negotiation is an accepted practice/expected and an employer may become concerned if a candidate does not negotiate. For example, the employer may be concerned that you lack confidence in your own abilities or are unaware of industry practices. Preparation, research and practice can help you build your confidence to negotiate.

Negotiating can help combat systemic pay inequities

There are laws that govern pay equity in Canada including the federal Pay Equity Act and provincial pay equity acts such as the Ontario Pay Equity Act. Pay equity means equal pay for work of equal value and is a complex and long-standing issue in Canada. Employers have obligations to institute pay equity, but it can still be beneficial to advocate for yourself by researching typical compensation for the roles you’re applying for and asking for what you believe is fair. Racialized individuals may encounter lower salary offers compared to their non-racialized counterparts, perpetuating wage gaps (Statistics Canada, 2023). Racial biases may also influence how recruiters and hiring managers evaluate the qualifications and potential of racialized candidates, which can lead to unfair treatment in job offers.

Key negotiating principles

Research your industry and establish your fair salary range
Research the organization, whether or not they have a standard practice for salary negotiation and how pay increases are determined at the organization
Consider non-salary compensation (e.g., vacation time, health insurance, tuition reimbursement, working from home, pension and more)
The best time to negotiate salary is after an offer has been made or during an annual review process
Practice your response if the employer wants you to name a figure first, or seems unreceptive to negotiating
Practice explaining why the skills and experience you would bring to the position are worth what you are asking for

Step 1: Determine your fair salary range

Salaries vary depending on what (if any) other benefits are part of the overall compensation package, for example:

Local cost of living
Availability of talented workers
The size and financial success of the organization
The job itself including your level of experience

This means that salary ranges, range! Typically, when it comes to salary negotiations a fair range includes a gap between the low end and the high end of between $5,000-$10,000 depending on the scenario (Kaplan, 2024) For example, if based on your research you’re expecting to earn $55,000 per year in salary, a fair range might be between $50,000 - $60,000.

How far you are willing to move from the high end of your range may depend on what other forms of compensation are being offered by the employer.

When and how to establish your fair salary range

It’s recommended that you establish your fair salary range at the beginning of your job search. Doing so will help you focus the job search on suitable positions and to be prepared to discuss salary if it comes up early on in the application/hiring process.

If you’re planning to negotiate your salary with your current employer, you may already know what a fair range is for the position based on the organization’s internal salary scale, industry standards or other sources. If not, you will want to conduct some research and establish a rationale for why you deserve an increase in your salary. Your rationale may be based on factors such as:

Industry standards
Pay equity
Years of experience
Skillset
Enhanced education
A combination of factors

Resources to establish your fair salary range

Industry/trade journals may devote an entire issue to salaries.
Salary surveys can be based on broad research but sometimes draw on salary information from only a few people – make sure you use surveys in which you can see that a reasonable number of people were surveyed, and that the information applies to the geographic area in which you are seeking employment (e.g., manufacturing salary survey Toronto, Ontario).
Professional association websites may offer free information about salary ranges, or you may need to be an association member or know a member who could provide this information to you.
Company/organization websites sometimes publish salary scales (e.g., Canadian public service pay rates).
Information interviews: people already working within your field may be open to sharing a fair salary range for someone with your level of experience.
Networking: ask people you know —friends, family, professors, alumni, present and past coworkers — about fair salary ranges (avoid directly asking about what they themselves earn).
Direct requests: people in similar jobs or the same job at a similar organization may be willing to share information about salary ranges – again, ask about the fair range rather than about their own earnings.
Union representatives (e.g., Union representatives/staff).
Faculty associations (e.g., a committee or council representative).
Staff associations (e.g., a director or staff representative).
Recruiters and employment agencies: recruiting or employment companies often have current salary information, they are more likely to help out with your request if you are registered with them.
Human Resources departments: keep in mind that the goal of HR departments within an organization are typically to recruit workers at a favourable cost to the organization, so unless they’re in an organization with set salary ranges, it may not be in their best interest to share salary ranges with you.

Not sure where to start? Check out the following salary resources:

Step 2: Establish your “non-negotiables”

After determining your fair salary range, it’s time to think about what you’re not willing to compromise or concede on during negotiations – these are your “non-negotiables”. Depending on where you’re at in your life and career journey, what you need from a job can vary greatly.

You can start by considering the lowest salary you can or will accept – this may be the number at the low end of the fair salary range you’ve already established. Next, think about perks and benefits – what’s acceptable and what is “non-negotiable” for you based on your needs at this point in your career and life journey?

Here are some common scenarios and examples of non-negotiables:

Scenario: You will have to relocate in order to accept a job and are unable to afford moving expenses.
- Non-negotiable: Support with the costs of re-locating such as a moving service or first month’s rent.
Scenario: You share elder care responsibilities with a sibling, and you need to be flexible in order to occasionally provide support during working hours.
- Non-negotiable: Flexible working hours that will allow you to shift hours and make up for missed time.
Scenario: Your partner is currently unemployed and you have set monthly expenses.
- Non-negotiable: A net salary that will allow you to cover your monthly household expenses.

Establish where you’re willing/able to be flexible

You may receive everything you ask for during a salary negotiation, but it’s common that this won’t happen. For this reason, it’s important to consider where you’re willing to be flexible regarding the compensation you’re asking for.

Tip: Consider making a list of your desired compensation and benefits and rank the items by how important they are to you. You can use this list during negotiations to ensure you’re prepared and representing your needs effectively.

Step 3: Determine the appropriate time to negotiate

As a jobseeker you may be asked to provide your compensation and benefits expectations to an employer in the job application, before the interview, during the interview or as part of a job offer. This question marks the very beginning of the negotiation process, and it’s why you need to be aware of your desired compensation and non-negotiables as early into your job search as possible.

You may also be looking to negotiate additional compensation, benefits or perks while you are currently working in a job. This may be part of a standard, recurring performance/salary evaluation process with your employer or you may be looking for an ad hoc pay increase.

Most salary negotiations take place in-person or over phone/video call. However, it’s becoming increasingly more common for salary negotiations for new job offers to take place over email. Approach salary negotiation with the same strategy through email as you would in person.

In any scenario, the most important thing for you to remember is to be prepared before engaging in any conversation about salary, benefits or any other aspect of compensation.

Considerations for negotiating co-op job or work-integrated learning (WIL) experience offers

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Co-op/WIL job postings

Though it’s not a requirement, employers submitting co-op/WIL job postings are encouraged to include information about the compensation and benefits they offer in their postings so that University of Waterloo students are able to make informed decisions when choosing where to apply. The information provided in the posting may answer all the questions you had about the compensation. If not, consider asking about compensation during the interview.

In co-op, due to the fast-paced nature of the rank/match process, there is not a chance to discuss the salary after the employer offers a position and before the student accepts it. This is why discussing salary in an interview is recommended. When interviewing with an employer outside of the rank/match process, the standard procedure is to discuss the details of the job offer, including salary, after the offer has been made.

How to ask about salary

If the employer has not already mentioned salary in their posting and/or by the end of the interview, it’s okay to ask about it. Asking about salary will allow you to make an informed decision and will help you determine whether you’re able to accept the offer based on your budget, living expenses or other factors.

If you decide to ask about salary in the interview, it’s best to ask it towards the end of the interview. Usually, following the interview questions the interviewer(s) will ask you directly if you have any questions for them. This is your opportunity to ask any questions you have about the position, the employer and the salary. If the interviewer(s) do not provide you with an opportunity to ask questions towards the end of the interview, you can decide what you would like to do next. If you’re comfortable with it and salary is important to you, ask the employer if it’s okay to ask a question. Use this opportunity to ask about salary, and if appropriate, any other questions you might have. If you are uncomfortable doing so and/or the salary is not a major determining factor in terms of whether you accept the job offer or not, you may choose not to ask about salary.

Here is one example of how you might phrase your question:

“In order to help me arrange my budget for next term, could you please tell me the expected salary for this position?”

How to negotiate salary

Asking about salary is not the same as trying to negotiate a higher salary. Students can negotiate co-op or WIL salaries after a job offer or match, but it’s important to note that negotiating involves some risk. Some employers may not expect salary negotiations when hiring for co-op jobs since the pay rate is already in the job posting. Typically, co-op/WIL employers have a set amount they pay students and most are unable to adjust this amount. It is possible that some employers may rescind offers based on negotiations that they feel are demanding or unrealistic based on the company’s salary structure.

Tip: If you plan to negotiate your salary for a co-op or WIL opportunity, reach out to your co-op advisor for guidance.

Step 4: Defer! (as much as possible…)

Generally, you should try to hold off on negotiating salary until an official job offer is made. This tends to be the best time to negotiate because the employer has chosen you as a preferred candidate, which gives you leverage. Waiting to negotiate until a job offer is received also buys you time to do your research. You’ll have more lead time to gather information about the industry, employer and position and make an informed decision about your salary expectations. Deferring a salary negotiation may be easier than you expect.

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What if I’m asked to provide my salary expectations on a job application?

If a job application includes a field that asking about salary expectations, there are a few options. Ideally, the application field is open and allows you to control the input.

Here are some examples of how you might fill in an open text field about salary expectations:

“Open”
“Flexible”
“Willing to negotiate”
“Negotiable”
“A fair range based on the skills and experience I will bring to the position”

In some cases, the form field may require you to input numbers before continuing in the application. If this happens, you will need to decide whether or not you will continue the application process and input the salary range that you feel is fair.

What if I’m asked to provide my salary expectations before a job offer?

If an employer wants to discuss salary at the interview or before making an offer, always try to have them share their offer or range first. If you share your specific figures first, you may give up some negotiating power.

Some employers will use salary expectations to sort out candidates, especially if they have received many applications for the position. For example, if you ask for a salary they consider too high or beyond their budget, an employer may decide that they’re not able to afford to hire you and thus not offer you the position. If you ask for too low of a salary, an employer may worry that you lack the experience to succeed in the job. A fair and accurate salary range can show an employer that you have done your research.

It’s a good idea to wait until after you receive a job offer to negotiate salary. Once an employer is convinced that you will be an asset, they may be much more willing to negotiate compensation.

If asked before a job offer, here are some possible responses to the question:

“What are your salary expectations?”
“What is the average salary range for this position at the firm? My expectations are flexible, and I’d like to consider those rates before deciding on an exact range.”
“I would like to learn more about the position and what I can bring to it before I’m comfortable sharing my salary expectations.”
“Regarding my salary expectations, I would hope to be paid the market value of [JOB TITLE] job with [NUMBER] years of experience. I would be happy to discuss this with you in an interview.”
“I would be happy to discuss salary information in an interview. Please be assured that this level of responsibility looks appropriate to me and I do not think there will be any problem with salary.”
“Once we are both confident that I’m the right candidate for the job, I would be more than happy to discuss compensation.”
“I’m sure we can come to an agreement that’s fair to both of us, based on the market value of this position, and the skills, knowledge and experience that I will bring to the role. What salary range are you currently thinking of?”
“My exact salary expectation will depend on the specific level of responsibility of the position and the total compensation package.”

When not to defer salary negotiation

You’re overqualified for the job.

There are situations when you may benefit from discussing salary early in the hiring process. If you’re applying for a job that you’re overqualified for, an employer may fear that your salary range will not be within their budget. You can be proactive in addressing any concerns by explaining that you’re familiar with the fair salary range for the job and that you’re excited about the work itself and have no concerns about the compensation. If the job is a significant step down in salary or responsibility, you may want to reference the salary range in your cover letter, so that the employer knows you are fully aware of the potential drop in salary.

The employer insists on discussing salary early in the process.

Deferring salary discussions can be advantageous to you, but not always possible. Some employers are insistent on discussing salary early in the hiring process. If you have tried to defer but feel that you may be ruled out for not providing your salary expectations, you might choose to share your fair range with the employer. You can also add that the exact salary (within your fair range) would depend on the specific level of responsibility and the total compensation package offered.

If the employer asks you to agree on a salary range early on, try your best to leave the conversation open for further discussion.

You can use a response such as:

“If [the salary range] is fair, of course it’s acceptable. But could we please wait to discuss compensation until we’re both clear on what the job entails and what I can bring to the company?”.

Step 5: Negotiate other compensation, perks and/or benefits

In addition to the salary, consider what other benefits are most important to you, acknowledging that not all organizations will offer every benefit.

Possible benefits you could ask about:

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Equipment

Equipment such as laptop, tablet or cellphone

Family/Wellness

Daycare
Employee assistance program
Health club/fitness centre membership
Personal days

Financial

Commission
Commuting discounts or a company vehicle (depending on the travel required for work)
Expense reimbursement/account
Insurance (medical, dental, life)
- Insurance is costly, so coverage can add significantly to your overall compensation package. Find out the details of coverage and of the employer’s and employee’s contributions to insurance plans.
Overtime pay
Parking
Pension plans
Performance bonus, profit sharing
Product/service discount
Public transit pass
Relocation expenses
Signing bonus
Stock options or matched savings
Tuition reimbursement

Professional development

Performance reviews
- While all employers should conduct some form of performance review, if the salary offered is lower than you had hoped, you could ask to set a date for an early performance review, with the option of a raise upon good performance.
Professional development opportunities (e.g., courses, conferences, workshops)
Professional memberships
Sabbaticals

Working hours

Flexible work schedule
Lieu time
Remote work
Vacation time

Step 6: Make your decision

The last step of the salary negotiation process is for you to decide whether you will accept what’s being offered to you. Depending on the employer’s hiring process or the individual hiring manager, you may need to decide at different stages of the process – before or during the interview, before receiving a job offer or at the time of a job offer. If you have followed the previous five steps of successful salary negotiation, hopefully you are feeling confident in making your decision on whether to continue in the hiring process or accept a job offer.

Remember – there’s no “one-size-fits-all” when it comes to salary negotiation.

Just as each job seeker is unique, each salary negotiation experience is likely to be unique. There are many factors you might base your negotiation and decision-making process on, and these factors will change throughout the course of your career journey.

Do the best you can to honour your wants during salary negotiations and make a decision that feels right for you.

Common tricky scenarios:

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Pressure to accept an offer immediately

Sometimes an employer will make an offer and ask you to sign a contract or verbally agree to an offer immediately. If this happens, express your gratitude for the offer, your interest in the job and your desire to make important life decisions carefully. Ask the employer if they will allow you time to make an informed decision. Typically, the employer will give you a timeframe (e.g., 48 hours). If not, you can suggest one – be conservative and ask only for the time you think you will need to come to a decision. Make sure to stick to whatever timeline you have agreed to.

More than one offer

If you have more than one offer, it’s important to respect each employer, even while you decide on what’s best for you. You may find yourself with an offer from your second choice (“Company B”) while still waiting on an offer from your first choice (“Company A”). In this scenario, when you receive the offer from Company B, you could ask for some time (e.g., a few days) to consider the offer, express your gratitude for the offer and interest in the role and let Company B know that you want to ensure you’re making the right decision.

Next, you can let Company A know you’ve received another offer. You can also state that you hope to work for their company, as they’re your preferred employer but that you need to respect the timelines you agreed to with Company B. Close by asking if Company A can accelerate their decision-making process.

This approach will usually go one of two ways…

You are the preferred candidate of Company A, and it’s in their best interest to speed up the process to make you an offer ahead of the deadline you have established with Company B.
Company A may not be able to speed up their hiring process. Like you, they want to ensure they’re making a carefully considered decision. This doesn’t mean that you’re not their preferred candidate.

If you decide to accept an offer from Company B (or even another employer), recognize and celebrate that you have made a favourable impression on both organizations. At this point you have expressed your interest in a potential future employer, shown them you’re a desirable candidate and engaged respectfully with your new employer by honouring the timelines you agreed to. You never know how or when you might cross paths with Company A again in the future.
If you decide to turn down the offer from Company B in hopes of receiving an offer from Company A (or another organization) or because you decided that Company B isn’t the right fit for you at this time, do so within the timeframe you agreed to. Close by expressing your appreciation for the opportunity. Just as you want to be treated respectfully and honestly throughout the hiring process, so do employers.

Limited related experience/new to the field

If you’re relatively early in your career, you may feel you have little leverage in negotiations. It’s true that a more experienced candidate can bring unique value to an employer, but remember – the employer is interested in you, so remind the employer of the value you would bring to the position and the organization. Also, consider negotiating for benefits that can help you advance your career, such as training and mentorship opportunities.

If the employer cannot offer a higher salary, you can say that the salary is below your expectations, and that you would be happy to discuss an offer that is fair to both of you in terms of bonuses, increased commission (if applicable), vacation or professional development time or other benefits.

Even if you are tempted to say no immediately, say that you need time to think about the offer, and agree on a date by which you will get back to the employer. This will give you and the employer time to think. Be sure to follow-up with the employer when you say you will. If you must turn down the offer, state that you regret it and that you hope to encounter the employer in the future.

If possible, try to avoid:

Viewing the discussion as a confrontation
Entering a discussion without knowing a fair salary range
Focusing on personal reasons for negotiation (e.g., student debt); instead, focus on demonstrating your value to the employer such as your educational background and previous work experience
Accepting any offer immediately
Disclosing your fair salary range before an offer
Disclosing a specific dollar figure instead of a range
Supplying information about your past salary history – it may be much lower than what the employer is willing to offer you

Explore: Success at work

References

Back, L. & Laschever., S. (2003). Women don’t ask: Negotiation and the gender divide. Princeton, NJ: Princeton University Press.

Dodge, Matt. (2019, June 20). The average Canadian salary in 2019. Jobillico. https://www.jobillico.com/blog/en/average-canadian-salary/

Kaplan, Z. (2024). How to Negotiate Salary for Beginners (With Examples). Forage.

Sitorus, S. L., & Hidayat, A. (2023). The Effect of Compensation and Job Satisfaction on Employee Productivity. Journal of International Conference Proceedings, 6(4), 12–24. https://www.researchgate.net/publication/375103517_The_Effect_of_Compensation_and_Job_Satisfaction_on_Employee_Productivity

Smith, Jacquelyn. (2013, April 17). 7 things you probably didn’t know about your job search. Forbes. https://www.forbes.com/sites/jacquelynsmith/2013/04/17/7-things-you-probably-didnt-know-about-your-job-search/