How to Respond to Counteroffers in Salary Negotiations

Mastering the art of responding to counteroffers in salary negotiations

Let’s be real – salary negotiations are a high-stakes game. You’ve done your homework, asked for a raise or salary increase with confidence, and BAM – your potential employer or current company hits you with a counteroffer. So, what do you do now? This is where things can get tricky, but don’t worry. I’ve been through this before, and I’m here to give you the lowdown on how to respond to counteroffers without losing your cool and without leaving money on the table.

If you want to level up in your career, grow your income, or simply become a negotiation pro, knowing how to deal with counteroffers is essential. In this guide, I’ll take you through step-by-step on how to navigate this “second phase” of salary negotiation, plus share actionable advice from my own experiences. Ready to dive in? Let’s go.

What exactly is a salary counteroffer?

First, let’s clarify a key concept here. A salary counteroffer happens when you’ve made the first ask – the salary number you feel good about – and the other party comes back with their proposal. Sometimes it’s higher or lower than your desired number, sometimes they might add benefits or perks instead of increasing the salary. In any case, this requires a next move.

Why is responding to counteroffers so important?

Negotiations don’t always stop at the first ask. The way you respond to counteroffers can significantly affect the final deal you get. It’s kind of like a game of chess – one wrong move, and oops, checkmate, you’re getting much less than you deserve. But if you strategize well, you leave the negotiation with a great win.

Most people get nervous when they receive a counteroffer, mostly because it forces them to think on their feet. You don’t want to seem too pushy, but you also don’t want to give up getting what you’re really worth. This is why having a process to handle counteroffers is crucial for your career – your response can make or break your next step.

Step-by-step instructions: How to handle counteroffers like a pro

Step 1: Hit pause and take your time

First things first, don’t feel like you have to respond right away. A counteroffer isn’t a ticking time bomb. Instead of jumping in with a “yes” or “no” immediately, give yourself time to process their proposal. If necessary, you can say something like, “I appreciate your counteroffer. Let me think about it and get back to you in a day or two.”

Taking a breather allows you to clear your head, so you don’t make a decision based purely on emotion. Plus, it gives you time to evaluate the new terms more calmly.

Example: Your boss offers a counter saying, “We can increase your base salary to $80K but can’t add the performance bonus you requested.” Rather than impulse-respond, it’s smarter to say something like, “Thank you! I’ll review your offer and let you know by the end of the week.”

Step 2: Assess the offer in its entirety

Now that you’ve got some breathing room, it’s time to do the critical thinking. The counteroffer might not just be about your salary number – they might be throwing in perks like a larger bonus incentive, more vacation days, or stock options. Make sure you look at everything as a package deal because salary alone isn’t the only component of compensation.

Break down the offer and ask yourself:

• What’s the new salary figure?
• Are there new benefits included (e.g., healthcare, insurance, retirement contributions)?
• Are there any perks (flexible work schedules, stock options, tuition reimbursement)?
• Can I afford to accept this, both financially and from a career growth perspective?

Sometimes a higher base salary might not be as useful if they cut other benefits – or if the overall future growth outlook in this job isn’t promising. Be methodical while reviewing the numbers on this one.

Step 3: Know your worth – and stick to it

This is a huge one. When reviewing the counter, go back to your initial research: What’s the fair market value for someone with your skills, experience, and role in the industry? If the counteroffer still doesn’t match the value you bring to the table, you have every right to challenge it.

Avoid letting doubt creep in during this phase. Many people tend to lower their expectations once they get a counteroffer – as if they’re asking for too much. Newsflash: As long as your ask is based on evidence (market rates, comparable salaries, etc.), then you aren’t being unreasonable.

Example: If the company countered with a salary $5K below market value, you could respond with, “Thanks! Based on my research and industry benchmarks, I believe my skills and contributions are worth closer to [X amount]. Would you be open to revisiting this?”

Step 4: Present a firm but flexible counter-counteroffer

Once you’ve done Steps 1-3, it’s your turn to lay another move on the board. But don’t worry, countering again doesn’t make you look greedy. In fact, companies often leave room for more negotiation. As long as you explain your reasoning clearly, a good employer will appreciate your initiative and the confidence you bring to the deal.

When you present your counter-counteroffer, focus on facts rather than emotions. You want the other party to understand that your ask is reasonable because of XYZ (experience, market rates, recent contributions, etc.). That way, it doesn’t seem like you’re arbitrarily pushing for more just for the sake of it.

Here’s an example of how to phrase a respectful counter-counter:

“Thank you for offering to increase the salary to $80K. I’ve thought about it and, while I appreciate the raise, I believe a number closer to $85K better reflects my role’s contribution and current market rates. Additionally, I would like to further discuss other elements like the performance bonus and healthcare benefits to structure the most comprehensive compensation package.”

Notice how you’re standing your ground but also leaving room for dialogue. This shows you’re flexible but not willing to sell yourself short.

Step 5: Prepare to walk away (if needed)

This one can be hard, but you can’t forget that negotiations sometimes mean you need to draw the line. If the employer’s offer still falls below your expectations, even after multiple rounds, be prepared to politely bow out. Walking away from a bad deal can be powerful. It’s the ultimate move to show you know your value and won’t settle.

Of course, you should only take this step if you have another job offer or the luxury of time to keep looking. While you’re walking away, keep the tone professional. You never know – turning one offer down gracefully could leave the door open for future opportunities.

Practical advice: Navigating the nuances of counteroffers

1. Practice negotiating with a friend or mentor

Seriously, role-playing can help you fine-tune your negotiation skills. Ask a friend or mentor to simulate salary negotiations with counteroffers. This way, you’ll get comfortable navigating the back-and-forth and can be quick with your responses.

2. Set a specific goal and figure out your walk-away point

Before even going into salary negotiations, know your ideal number and also your “bottom line” – the minimum you can accept. This will help prevent you from accepting less than what you really need or deserve.

3. Keep the conversation professional

No matter how frustrated or excited you get during the counteroffer phase, keep your tone of communication polite and professional. Showing that you can manage these conversations in a composed way builds respect and trust from the hiring manager or HR team.

4. Don’t focus solely on salary

Remember, some parts of a compensation package, like career advancement opportunities or work-life balance perks, might be more valuable than simply a higher salary. Salary matters, but so does growth potential and job satisfaction in other areas.

5. Be clear about any final decisions

If you’ve made your final decision, communicate it clearly, and don’t waver. For example, once you’ve decided to accept the offer, convey your excitement and commitment to the new role.

Conclusion: Crush your next counteroffer

Look, at the end of the day, counteroffers are just an invitation to keep negotiating. Don’t be intimidated, and don’t rush into decisions. Take your time, assess the full offer, stand firm on what you’re worth, and be ready to strike a balance that feels right for you. When you handle these moments with strategy and poise, you’ll set yourself up for lasting career wins.

Now it’s your turn! Next time you get a counteroffer, don’t panic – follow these steps, and you’ll be well on your way to sealing the best deal for you. Got questions or need more negotiating tips? Let me know in the comments – I’ve got your back!