Salary negotiation

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

• Equipment such as laptop, tablet or cellphone

• Daycare

• Employee assistance program

• Health club/fitness centre membership

• Personal days

• 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

• 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

• Flexible work schedule

• Lieu time

• Remote work

• Vacation time

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.

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…

1. 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.

2. 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.

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.