How to Review, Negotiate, and Evaluate a Job Offer

Whether you’ve received your first job offer after graduating from college or you’re at the pinnacle of your career, navigating an offer letter can be confusing. While it may be tempting to accept the offer as soon as it lands in your inbox, taking the time to review it carefully is essential. If you make a hasty, uninformed decision, you may quickly come to regret it, so it’s worth it to invest a bit of time to truly understand what the employer is offering. Learning how to read and negotiate an offer of employment will put you in a much better position to get the job of your dreams.

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Anatomy of a job offer letter

Although your job offer letter may have a different number of components or appear in a slightly different format, the list below outlines elements commonly contained in such letters. 

Job description, title, location, start date, and supervisory structure

This section should cover all the basics, including your official title and role within the organization. It should specify whether the position is permanent, part-time, contracted, etc. This part of the letter may include information identical to that provided in the job listing or in the materials you received during the interview process. It should feature your immediate supervisor’s name and title in addition to other relevant information about the company’s supervisory structure and your place within the hierarchy. You’ll also find the date you’re expected to begin work and the location of your job site in case you’re required to work on premises. If the position is temporary, an end date may also appear in this section. 

It’s important to read through this portion of the letter carefully to make sure there are no surprises. If anything doesn’t line up with your expectations or the information therein differs substantially from what was in the job posting, discuss it with the employer before accepting the offer. Be sure to pay close attention to the section outlining work hours and any travel you may be expected to do. 

Can you negotiate? Possibly. It’s unlikely that you’ll be able to make major changes to the requirements of your position or your title (smaller companies may be more flexible on these things). You may be able to make minor requests, like being assigned to a project you’re interested in. If you discussed tweaks to the stated responsibilities in your interview, now is the time to make sure those are reflected in the written offer. 

With regard to the starting date, your new employer shouldn’t expect you to begin for at least two weeks after you accept the offer. Consider it a red flag if they don’t allow you to give your current employer sufficient notice—that’s a sign that you may not be treated very well at this company. The start date may or may not be flexible depending on the specifics of the position and company needs; if you were hired to oversee a project with a rigid start date, for example, you may have a tough time talking your new boss into letting you push your first day back. 

Compensation

Everyone’s favorite part! Evaluate the starting salary in the context of the entire job offer. If it’s on the low end of the range, does an excellent benefits package make up the difference? Maybe the health insurance offered is subpar. If that’s the case, you may need to request a slightly higher salary to offset the less-than-ideal benefits. Consider your own needs and determine what you can be satisfied with.

Beyond the more tangible elements discussed above, other factors are important to take into account as well. Will the workplace culture make you feel at home? Is the commute reasonable? How flexible will the company be when it comes to remote work? These and other considerations should factor into how satisfied you are with the starting salary. After all, a job is about more than a paycheck, and that money is worth a lot less if your job makes you hate your life. 

If any bonuses are associated with your position, they will be mentioned in this section. Typically, signing bonuses are paid to new employees when they begin working for a company or at the end of a probationary period. Performance bonuses, on the other hand, are usually awarded periodically and are not guaranteed. The details of the company’s bonus structure will be included in this section, and it’s likely that the amount you receive will be based on your performance, meeting company-wide goals, or some combination of the two. 

Can you negotiate? Absolutely! If there’s one component of the offer letter that employers expect to be negotiated, it’s the starting salary. The human resources officer in charge of drafting and negotiating the offer is usually authorized to make adjustments within some range, and it’s unlikely that the initial offer came at the upper end of that range. So, don’t be shy—brush up on your negotiation tactics and confidently but politely push for a higher salary. If you can’t cut a deal for a salary as high as you’d like but still want to accept the position, you might be able to ask for a raise based on your performance after six months or so.

If bonuses are a part of your compensation package, whether you can negotiate depends on company policy and the type of bonus offered. Usually, only bonuses based on individual performance can be negotiated.

Paid time off

Paid time off, or PTO, may look quite different from one company to the next. Generally, PTO accumulates over time, and the amount you’ve accrued is listed on your pay stubs. Some companies treat sick and vacation days differently, while others treat them the same, and some allow employees to take PTO they haven’t accrued yet, with the expectation that they’ll make up for this time. 

It’s important to review this section carefully to ensure you don’t make a mistake that could get you into trouble. If your circumstances necessitate a lot of flexibility—perhaps you have a sick child who often needs to stay home from school, and your parents can’t always step in to help— then insufficient PTO could be a big deal. 

Can you negotiate? Usually not. Some organizations will allow you to take unpaid time off in an emergency situation or when you have a good reason to be absent from work. It’s also worth mentioning that the Family Medical Leave Act protects employees from being fired if they need to take time off due to personal or family circumstances. 

Benefits

This section includes information about any other benefits, such as health, life, disability, and other insurance packages; retirement benefits; and vehicle allowances. Each benefit should be accompanied by an explanation of how to sign up, information about matchable benefits, and other important details.

Can you negotiate? For most benefits, no. You may be able to negotiate some benefits, like tuition reimbursement, especially if you’re enjoying that particular benefit in your current job. You may also be able to negotiate reimbursement if the position you’re accepting requires you to obtain a certification that you need to fulfill your work responsibilities. However, most components of a benefits package, especially those provided by third parties, are inflexible.

Relocation reimbursement

If your position requires you to relocate or it’s reasonable to expect that you’ll be asked to relocate, your offer letter should spell out how you’ll be compensated for moving expenses. Some companies will cover the total cost of relocation, while others will cover a portion or none of it. Some may even pay your mortgage if you have trouble selling the house you currently live in. 

Can you negotiate? Possibly. This will probably depend on the circumstances surrounding the move. Cutting the commute to your new job from 45 to 15 minutes likely won’t be a compelling reason for your new employer to finance a move. However, if you must relocate your family of 5 across the country for this job, you will have a strong argument for having your full costs reimbursed. If the company really wants you, it should be willing to help you with this stressful step. If it refuses, it may not be the right company for you.

Common mistakes

Many people jump the gun when they get an offer of employment and do things they live to regret. You’ve learned how to read and negotiate a job offer, but be sure you’re avoiding these common pitfalls, too.

Not asking questions

As you went through it, you may have found that your offer letter didn’t include everything you wanted to know. If so, don’t be afraid to ask for additional information in writing. After all, you’ll be spending a significant portion of your day in this job, so you don’t want any uncertainty about it. 

If some aspect of the employment agreement isn’t clearly spelled out, don’t trust things to work out on their own. You’ll be grateful that you took the time to fully understand the details of the position before committing—once you accept the job, you’ll have far less leverage to negotiate changes to your contract since you’ll already be locked in. 

Jumping the gun

First off, it’s important to note that this doesn’t mean you should ignore the offer letter in an attempt to play hard to get. Acknowledge that you’ve received the offer and say you are excited about the opportunity, but you need time to reflect before making a decision. This is important to do if you’re waiting to hear back from another company you’ve interviewed for, even if you’re reasonably sure you won’t accept a competing offer. 

It’s easy to let excitement get the better of you at the prospect of a new start, but that new start will quickly turn into a major disappointment if you encounter unpleasant surprises that you would have known about if you’d taken the time to review the offer letter carefully. Now is the time to decide if this position is aligned with your values and whether it will provide the things you want out of a job. Don’t rush your decision, and don’t be afraid to ask friends and family for their opinion. 

You’ve no doubt heard the expression about not counting your chickens before they’re hatched. This excellent advice applies to many situations, especially the one you may be in right now. A job offer is contingent on many things going right—background checks or final funding approval, for example – and you should recognize your letter for what it is: an offer. 

Telling your boss off and quitting in dramatic fashion may have crossed your mind as soon as you decided to accept an offer, but you’ll be glad you didn’t if anything goes wrong. Save that until you’ve definitely got the new job in the bag (better yet, don’t do it at all because your old boss may still be a valuable connection). Offers are sometimes rescinded, and you don’t want to find yourself unemployed because you got too excited. 

Keep in mind that you should also avoid sharing the news on social media or discussing your new position with colleagues until you’ve finished signing all the paperwork. 

Making your decision based solely on paycheck size

The compensation package is an extremely important part of a job, but it isn’t the only part. To invoke another well-worn but wise expression, money isn’t everything. A big salary won’t make up for a job that you hate. Be sure to consider other factors (commute length, overtime requirements, travel expectations, etc.) when making your final decision. Assign a worth to these aspects of the job and ask yourself whether the salary is still worth it.

Final thoughts: Read carefully, ask questions, reflect, and decide

If you took one thing away from this article, it should be the importance of carefully reviewing your employment offer and taking your time to make a decision. Don’t be afraid to ask questions and request any materials or information that can help you decide. If you think it would give a better sense of what the company culture is like, ask current employees for a one-on-one meeting. All this careful reflection may even improve the employer’s opinion of you since you’re demonstrating that you take the time to make careful decisions instead of rushing headfirst into new situations.

Consider what prompted you to look for a new job in the first place. Does the position you’ve been offered seem likely to resolve a significant number of the problems you’re having in your current workplace? Think about your values and what you want to get out of a job (beyond a paycheck), and be honest with yourself as you evaluate whether the one you’ve been offered aligns with your goals and expectations. If you hate your current job and are itching to get out, be careful not to examine the new opportunity through rose-tinted glasses.

If something feels off about the company or the job offer, it’s a sign that you shouldn’t accept. Don’t ignore your instincts!

You aren’t doing anything wrong by turning down a proposal that doesn’t work for you. If you decide to reject a job offer and continue applying for new positions, hire a professional resume writer to improve your odds of landing the perfect job!