Who Should Make the First Offer in a Negotiation?

If you are involved in a negotiation where money is involved, who should make the first offer?

The answer is that you 1) always want to get the other side to make the first offer and 2) you want to delay discussion of salary as long as possible.

1. You want to delay the discussion of salary as long as possible.

When you apply for a position, you are often asked a) the amount of your last salary and b) what salary you are requesting and/or a the amount of your last salary.

a) What is your salary of your last position?

Of course, you have to be honest and list your salary. However, you might want to give an explanation. For example, if your previous salary is more than what you are expecting in this new position, you may want to say that so you won’t be eliminated for consideration. I once accepted a much lower salary in a different location and explained that I was willing to take a pay cut because I knew the salaries were less in this geographic area. If your previous salary is much less than what you are expecting in this position, you might want to explain that as well. Maybe there are more duties in this new position.

b) What salary are you requesting?

This can be a double-edged sword. I often will answer “Salary is negotiable for the right position.” Otherwise you might price yourself out of a position you might have accepted. For example, you write that you want $100,000 although under the right circumstances you might accept $85,000. If you write $100,000, you may be eliminated in the first cut because your salary expectations are too high. If you wrote that you want $80,000, the new employer may use that number against you and not give you the other $5,000 that has been budgeted. It is a very delicate balancing act. I like to postpone these discussions as long as possible so that they already want me for the position and, therefore, might be more willing to negotiate with me. If you feel uncomfortable giving a specific salary, you may want to say, you are expecting the mid or high end of the range.

2. The other side should make the first offer.

Let’s say you are negotiating your salary with a new employer. You have decided you want to accept the position, but are trying to get the highest salary possible

You always want the employer to make the first offer. Otherwise, you may be negotiating against yourself. Let’s say again that you want $100,000. If the employer offers you $110,000, now you have at least $10,000 more than you were expecting. If the employer offers you $90,000, you now know the minimum and can try to negotiate something higher than that.

If you are forced to make the first offer, it can cost you money. Just be sure you say a high enough amount because you are unlikely to get more than this first salary request. When you say an amount first, you are usually in a position of weakness. If you say you will accept $100,000 and the employer says yes, then you may be wondering whether they would have gone higher.

3. Always get a counter-proposal

When someone makes an offer to you, never accept it right away. Think of this as a preliminary number. Always ask for a little more, even if it is more than you ever expected. Just say it with a straight face. If you are made an offer, take some time to think it over. This is the time to say you want to discuss it with your family and take at least one night to sleep on it.

If you make the first offer, and the employer says that they cannot pay that amount, always ask for a counter-proposal. Do not make another offer before you get a counter-offer. Otherwise, you will be negotiating against yourself. It is tempting to say another amount, especially if there is silence, but resist and wait for the employer to give you a counter-proposal. If they say that is the final amount offered, then you will have to decide whether to take it or make another counter-offer. Sometimes you can ask for things that do not represent money in the budget such as going to a training conference, more vacation, or a a better-sounding title.

Remember, anything is negotiable.