Alert Message
Thanks for signing up! We hope you enjoy our newsletter, The Teller.
negotiating job offer

This Is Why Negotiating Your Job Offer Is Good For You

Negotiating can be tough. But not doing it could be tougher—on your finances.

A 2011 academic study showed that people who successfully negotiated a starting salary increased their pay by an average of $5,000 per year. Over a lifetime of earnings, that could add up to more than $600,000 in additional pay—simply by negotiating for $5,000 additional compensation at age 25 on an initial offer of $50,000.

But fewer than half of job seekers are negotiating their job offer, according to a recent survey conducted by Earnest. The survey included more than 1,000 people between ages 18 and 44 across the United States.

The survey also revealed striking differences by age and gender when it comes to negotiating a job offer, underscoring bigger workplace conversations around pay equity, compensation, and employer flexibility.

Overall, young adults negotiated the least of any age group. The Earnest survey, based on thousands of student loan refinance applicants, showed that young men report negotiating more often than young women—42% of young men negotiate a job offer compared to 26% of young women.

Read more: How to Negotiate a Job Offer


Yet while young men were negotiating more often, they were not necessarily successful. Only 21% of young male negotiators were successful, while 16% of young women who negotiated were successful (defined as getting some or all of what they asked for in the negotiation.)

One reason early-career negotiation is important is that it sets the level of pay for a worker. Past research has shown that women overall are less likely to enter salary negotiations compared to men and that may be a contributing factor to the pay gap between men and women.  

In the Earnest survey, both young men and women were less successful in getting what they wanted as compared to older age groups of both genders. That said, an unsuccessful negotiation isn’t necessarily a waste, especially for young workers who are gaining early experience, and it could play a role in becoming an effective negotiator down the road.

Another factor in negotiating—regardless of success and outcome of negotiation—is the role it plays in worker happiness. The survey also showed that people who were happiest with their jobs were those who did negotiate—75% of people who did successfully negotiate their last job said they were happy with their job. Among those who did not negotiate, people who said they forgot to do it were the least happy with their job.

Read more How to Have a Happy Career

Bar graph showing that people who negotiate their job offer, or didn't negotiate because they were happy with their offer, are much more likely to be happy with the resulting job than people who simply forgot to negotiate.

There is no magical formula for successful negotiating—but there are some general guidelines that can help position you for success. One suggestion from career expert Bobbi Thomason, senior fellow and lecturer at The Wharton School of the University of Pennsylvania, is to consider the whole package of things being offered (salary, equity, vacation, training, etc.,) before you ask to amend the offer.

“Take time to think about all of your interests,” Thomason says. “You could get compensation through a bonus or equity, but you also might care about the projects you’re assigned.”

Disclaimer: This blog post provides personal finance educational information, and it is not intended to provide legal, financial, or tax advice.