The first real offer negotiation a person can experience in their lives is when they receive a full-time offer from a company at which they previously interned. What to do can feel extremely stressful because it’s a bit like gambling: should I accept the offer I have or should I continue to see if there is something better? This decision, compounded with the unique stress of the COVID-19 hiring market, leaves most students to make suboptimal decisions.
We spoke to several recruiters and hiring managers who shared with us inside information regarding what to think about when negotiating a full-time return offer. Here, we are going to share several key insights and considerations that came from these conversations. First we’ll explain that the most important negotiating point is the offer deadline. Next we’ll share how you should negotiate and how you can effectively use the social capital you built while interning. Finally we’ll talk about when it might be worth reneging an offer, how to renege, and when you should not.
The most manipulative form of negotiating that companies do is setting a short timeline for the offer. The date is either set arbitrarily by the company or is based on a university on-campus recruiting policy that is almost always more favorable to companies than students. There are three key reasons there can be significant room for negotiating the start date:
- the start date is usually 8 or 9 months after the date they pressure students to accept
- employment contracts are at-will, so you can legally quit and go somewhere else at any time
- most companies who do on-campus recruiting actually can’t fill their headcount from the interns who receive full-time offers.
This means that while they apply a deadline of, say, October 15th to returning interns, they continue trying to hire for the very same role well into the spring semester and usually into the summer. Companies pressure you because it works, not because their spots are actually limited.
The offer deadline is 100% negotiable. These deadlines can easily be extended by a couple weeks or even several months if you have the right relationship with your manager. While it’s not fair for you to have an infinite amount of time, it’s also not fair for companies to pressure a student to accept an offer without having the time to make a fully-informed decision about what is best for their career. Remember that at-will employment means a company cannot legally make you stay and if you leave within one year, it hurts a company more than it helps because of the time it takes to ramp you up. You should request an extension given this reality.
How to negotiate
When it comes to negotiating the full-time offer, the most important factor that dictates how much you can negotiate is the feedback from your internship performance. If this wasn’t positive, then try asking for more time to accept the offer or a minor increase in the offer, but don’t negotiate more than that. If you received positive feedback, however, use that to your advantage! Be more ambitious in your negotiating and emphasize how strong the positive feedback is. Do research to better inform your negotiations, such as asking your manager what value they want you to add in your first year and beyond. Ask them (and consider for yourself): how unique are the skills or background you bring to the team? Find out how big the team is planning to get in the next year to understand how important it is for them to make hires.
Another key factor for your negotiations is that, as a former intern, you have information and internal relationships that regular candidates don’t have. Take advantage of your connections with team members who can help facilitate these conversations more smoothly. Rather than having a distributive negotiation where you fight over whether a number is high or low, you can have a more integrative conversation about the value you will contribute to the team and what that is worth to the company based on your already-demonstrated strong performance.
Using Social Capital
So before you do any negotiating, spend some time understanding how you fit into your company’s larger strategy and how to make yourself more valuable to that strategy, and then be sure to bring up these points as justifications in your negotiation. Use your internship manager as an internal advocate for the discussions the finance team will be having by asking for their support. Leverage also your full time peers that you worked with during your internship to have even more champions. HR sees individuals as costs; they have no idea of the value you can provide, so you need to have internal champions who show HR that the cost is less than the value you will create.
When to Renege an Offer
Let’s imagine that you had a good internship but you are not convinced that you want to return for the full-time role, and the company gives you just two weeks to decide. Your first step is to be transparent that you would like more time to determine what is best for your career. Let’s say they are not flexible on the deadline. Should you accept the return offer? Yes. Should you interview at the other companies you are interested in? Also yes -- your career is too important not to be 100% excited to join!
Suppose you now have received a new offer and are trying to decide: should you switch companies? While there is no definitive answer, and reneging is not something to do lightly, here is our recommendation. If the base salary is greater by $20K or more, then you should seriously consider switching because it means that the previous company has significantly misappropriated your value. Otherwise, you should only consider switching if it is because of non-monetary reasons. Perhaps you are significantly more passionate about the other company or industry, or you believe it offers better career growth. How do you determine potential career growth? Maybe you believe the boss in the other company would teach you more. Maybe you’ll be working with a stronger team that’s a better fit for you. Or maybe the other company will literally be growing more in the next two years. These career positives outweigh the negatives of reneging a job offer.
The first thing to understand about reneging an offer is that it is completely legal. Second, the risks to reneging have to do with damaging relationships and your reputation. Here’s why we believe reneging in the right circumstances is acceptable: (1) The notion of it irreparably damaging your career is outdated and a holdover from when there were only a couple companies to work for and you could be at a company for decades. (2) The reality of the business is that circumstances change. Remember when AirBnB rescinded all internship offers during COVID-19? The company is going to optimize for itself first -- you need to do the same. (3) Reneging does not mean that you have automatically burned a bridge and can never go back to a company. What matters is how you do it. If you are respectful, apologetic, and provide thoughtful reasons as to why you are making your decision, then the company will recognize it’s ultimately your choice and move on.
Negotiating is certainly not an easy thing to do. Effective communication is one of the most important skills you can develop and negotiations are some of the hardest conversations to have. Regardless of whether you negotiate your first job offer, you will need to develop this muscle at some point in your career. More important than just compensation, negotiating is about you learning to advocate for yourself in a culture where you must speak up to thrive. There’s often a magical moment at Ralph when we work with our clients where a lightbulb turns on during the negotiations and they realize their self-worth and value are greater than their fears. One of our biggest goals is building towards these moments of true, deserved self-confidence, something we want every candidate to experience.
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