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How to respond to a job offer

Billionaire Spanx founder Sara Blakely recently hired a number two exec away from Nike.
Photo by Paul Morigi

Employers are hiring more as the economy is slowly beginning to gain strength. Billionaire Spanx founder Sara Blakely recently hired a number two exec away from Nike as its new CEO. Jan Singer, Nike's clothing exec, started at the Spanx shape wear company this month to an undisclosed rate of pay. Blakely's final offer to Singer was likely hard to refuse. It was likely that the offer was discussed in great detail, revised and written. Be sure to read this article so you know more about job offers and how to handle them.

Economy is getting better

Job offers increased to a total of 5.3 million in May 2014 compared to 5.1 million a year ago the labor department reported last Tuesday. Meanwhile, 2.6 million quit their job in May compared to 2.2 million job quitters a year ago and total of about 4.4 million left their job this May, either by choice or because of layoffs. These numbers are actual and not seasonally adjusted.

Even executives are more willing to quit

More chief executive officers are leaving their jobs as well. CEO turnover is approaching pre-recession levels this year as 103 CEOs announced their departures during the month of June, says Challenger, Gray & Christmas in a report issued Wednesday.

Get it in writing; respond in writing

Written contracts are stronger than oral contracts. Ask for the offer in writing. That way there will be less chance of a misunderstanding and it gives you more time to discuss the terms and conditions. It is always wise to accept the offer in writing as well.

Be sure you understanding the offer

Sometimes it is wise to ask a lot of questions to understand where you stand when you get an offer from an employer. First, you need to know what the employer will negotiate in an offer. Next, you need to know the employer’s compensation policies. Finally, you need to know which benefits are negotiable and which are not. Also, be aware of the potential of an employer withdrawing an offer.

Negotiate the initial offer

Each employer has its own take on negotiations. Large and stable organizations are less likely to negotiate pay and benefits but may be willing to consider terms and conditions of the job itself. New and growing companies have been more flexible due to the demand for skilled employees to fill vacant positions.

Beware the lowball offer

The cost of making a jobs change can be as high as 20 to 30 percent says human resources professor Herbert Heneman III, because job changers have to start all over on vacation time awards, retirement fund credits and learning a new job. Thus, low-ball offers may be totally uncompetitive with your current employment situation. If you are not desperate for another job, don’t change unless the terms are right. In these cases it is wise to find out if the employer offered a low salary expecting a counteroffer.

Ask first how the offer is determined

It pays to ask for an explanation of how they determined the rate of pay. Then explain your situation and how you could be enticed by a better offer. Remember to balance pay with benefits and all other terms and conditions of the job.

Consider the competitive offer

Competitive offers are sometimes based on the external market. Competitive offers are matched to ensure acceptance and could potentially match your current employment situation in terms of salary and benefits. As a general rule concerning job offers, it can be said that “competitive” job offers tend to leave room to negotiate.

Ask again how the offer is determined

It helps to know where you stand. This author worked for a large corporation that based its college new grad offers on the external market, which sometimes led to new hires starting at hire pay than existing employees. This same organization based its offers to experienced employees compared to the pay of current employees. It would not negotiate offers and it would not counter-offer if the employee wanted more to compete with other offers. The employer felt its offer was competitive and was determined fairly. Negotiating pay would only lead to having an employee prone to negotiating pay in the future.

Take the best shot

Some employers are pressured to fill jobs and will make a “best shot” offer. If an employer offers a big increase, there is usually little room for negotiating more. Nevertheless, that employer probably overlooked important job details. Be sure the benefits and working conditions a right for you. Joining a “run and gun” organization is full of opportunity but conditions can change rapidly with the market. Furthermore, you may be paid more than your colleagues, but you may later find new employees paid more than you.

Watch for employers withdrawing an offer if it takes too long to accept

About half of employers surveyed recently say they have withdrawn college student offers. Employers say that in many cases, they needed an early decision. College students are counseled to wait during the school until they complete all their interviews and get all their offers. While ethics speak against reneging on job offers, the fact remains that it happens.

Employers withdraw offers when they discover discrepancies

Be aware that it is standard practice for employers to withdraw offers and even terminate employment if they find you lied on your application. It has even happened to very highly paid and high profile people such as college sports coaches.

Employers may extend offers contingent on such things as passing a drug test or getting satisfactory reference checks. Employers do that as a safeguard against negligent hiring, but also because they want good employees.

Sometimes you can sue for damages

It happens all the time. Applicants have accepted employment and then changed their mind and employers have offered and then reneged on the offer. Usually nothing more happens after that. However, plaintiffs have been awarded compensation for “promissory estoppel,” or the detrimental effect of a withdrawn promise of employment.

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