Salary negotiation: how to prepare a well-founded counteroffer

Category: Career

Reading time: 4 minutes

Most professionals approach a salary negotiation with enthusiasm or anxiety — and without enough knowledge to distinguish a good offer from one that is simply comfortable for the person making it.

This is not a lack of intelligence. It is a lack of HR literacy. And this information asymmetry tends to benefit the party with greater access to information.

What is really on the table

When a company presents a salary offer, it is rarely presenting an isolated number. It is presenting a package. Yet most professionals assess only its most visible component — the base salary — without examining the rest.

A total compensation package may include fixed and variable components, benefits in kind, long-term incentives, retention clauses and exit conditions. Each of these components has real value and a different degree of negotiability.

Negotiating only the base salary without understanding the relative weight of each component is like negotiating the price of a car without reading the finance agreement.

The anatomy of a pay structure

Many organisations, particularly as they grow, adopt some form of pay structure — pay bands, levels or reference ranges for each role. They rarely share this information spontaneously.

Knowing that this structure exists — and that any offer you receive is positioned somewhere within a range — changes the nature of the negotiation. The question is no longer “is this number fair?” but “where am I within this pay band, and on what basis can I move?”.

When no formal structure exists, the offer reflects something else: what the company believes it can afford, what it paid the previous employee or what it perceives to be the market value of the profile. None of these criteria is neutral.

What is negotiable — and what rarely is

Some components offer genuine room for negotiation, while others are constrained by internal policy, pay equity with comparable employees or the need for senior approval.

Base salary often has a narrower margin than it appears. Additional benefits, short-term incentives, the date of the next salary review or onboarding conditions may offer greater flexibility. Understanding where the real margin lies is different from asking for more in every area.

An effective counteroffer is not a wish list. It is a well-founded position with defined priorities and concrete arguments for each point.

How to build a well-founded counteroffer

A strong counteroffer is based on three elements:

1. Market reference: What is paid for this role, in this sector and at this level of responsibility. Public market data — including salary reports and benchmarking platforms — is available and should be used.
2. Demonstrable value: What the professional has already delivered, in which context and with which measurable results. A counteroffer without evidence is merely an opinion.
3. Clarity about red lines: What is the minimum acceptable outcome, what is negotiable and in which order. Without this map, every concession can feel like a defeat.

What usually goes wrong

The most frequent mistakes in salary negotiation are not technical. They are mistakes of positioning.

Negotiating under deadline pressure, accepting the first figure for fear of losing the opportunity or making a counteroffer without supporting data are among the most common — and most costly — patterns. Time pressure may provide the other party with leverage, and deadlines are not always as fixed as they appear.

Another frequent mistake is underestimating the cost of inaction. Choosing not to negotiate is not neutral. It means accepting a position that may continue to serve as the reference point for subsequent salary reviews.

Conclusion: HR literacy is a competitive advantage

Salary negotiation is not about pressure or boldness. It is about having structured knowledge of what is on the table, clarity about your own value and a position prepared in advance.

Someone who enters a negotiation without having done this work is not at a disadvantage because they are less capable. They are at a disadvantage because they do not know the rules that the other party understands very well.

Do not negotiate alone under pressure. At VAGAR, the Positioning Statement included in our Career Path service is designed precisely for this moment: before the conversation, with data, clear criteria and a defined position.

Schedule a conversation about salary negotiation

Evidence base

Leibbrandt, A., & List, J. A. (2015). Do women avoid salary negotiations? Evidence from a large-scale natural field experiment. Management Science, 61(9), 2016–2024.

Curhan, J. R., Elfenbein, H. A., & Xu, H. (2006). What do people value when they negotiate? Mapping the domain of subjective value in negotiation. Journal of Personality and Social Psychology, 91(3), 493–512.

Bowles, H. R., & Babcock, L. (2013). How can women escape the compensation negotiation dilemma? Psychology of Women Quarterly, 37(1), 80–96.

Kim, P. H., & Fragale, A. R. (2005). Choosing the path to bargaining power: An empirical comparison of BATNAs and contributions in negotiation. Journal of Applied Psychology, 90(2), 373–381.