This interview showcases how to negotiate a cost of living adjustment. When disappointed with her initial offer, she failed to negotiate an increase in salary. By speaking to an employee she learned the company offered cost of living adjustments. Figuring out what was negotiable got her back to the negotiating table.

Negotiating a cost of living adjustment is a common alternative to negotiating a higher salary. To negotiate a cost of living adjustment, first determine if company policy allows one for their employees. It is fair to have your income level with your office coworkers. Calculate a fair living adjustment cost between the companies headquarters and the higher cost city and ask for it.

In this anonymous interview below, you will find the how one person successfully negotiated a cost of living adjustment.

 

Title: Brand Manager

Location: New York, NY

Salary Offered: $110K

Negotiated Salary: $110K with $18K other compensation

It’s a simple step that’s easy to overlook: figure out what they can offer before you ask for something.

How did you negotiate salary after receiving a low offer?

I was interviewing for a job at the end of my MBA program. I had two offers, one for $120k at a tech company, and one for $110k at a beauty company. Though the offer from the tech company was higher, I was much more excited about the role at the beauty company.

I decided to try to use the higher offer as leverage to negotiate for a higher starting salary with the beauty company.

The director of the beauty company was on campus that week, and I set up a time to speak with him about my dilemma. With prepared notes in hand, I was ready to negotiate.

I launched into my speech about how I really wanted to work for his company, but the salary divide was too large.

Would they be willing to match my other offer?

No, was his immediate response. I was a bit surprised. He was really respectful but informed me that they made standard offers to all of their MBA graduates and my salary couldn’t be adjusted. There was nothing he could do.

After that meeting I was frustrated because I felt I had done everything right. In my negotation I had been:

  • assertive
  • made my case
  • used another offer as leverage

 

How did you negotiate a better offer?

A week later I was sitting in a negotiation seminar at school, feeling really disappointed about my situation, when the professor started talking about how important it is to understand what the other side can actually offer. It’s a waste of time asking for something that they can’t offer.

I realized that I approached the negotiation completely wrong. I assumed that salary was negotiable, but I hadn’t done any research to understand whether that was true.

Was there anything else that could be negotiable? Such as an increased bonus, extra vacation time, or additional stock.

I decided to reach out to an alum currently working at that company, who I had met previously at an event.

 

Reach out to employees for negotiation options

Speaking with this alumni provided valuable information about how to approach the negotiation conversation again. After talking about her experience with the company, she asked what my concerns with the offer were.

She was in the Chicago office, where the company is headquartered, and I explained that my offer was to start in the New York office. I told her about the other offer I had and that I was struggling with the idea of taking a role for less money in such an expensive city.

She mentioned that they sometimes give cost of living assistance for people moving from a low cost of living area to a high cost of living area.

Her suggestion was that I negotiate for a cost of living adjustment.

I set up a call with the director for the next week and began researching cost of living differences between Chicago and New York.

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Negotiating a cost of living adjustment example

When we got on the phone, I started by telling him how much I had enjoyed speaking with the alum and hearing even more about what it is like to work for the company. Speaking with her made me even more excited about finding a way to make this work, financially.

I then told him that I understood that the company gives cost of living adjustments to their employees who move to more expensive markets, and though I was a new hire I was hoping that I could still qualify for this living adjustment.

He pushed back a little saying that it had been my choice to select the New York office. That was true, but I replied that I was only asking because I knew that this was something they already offered. My expectation was that my income would be level set with the other employees in the office.

After what felt like forever, he replied that it seemed reasonable. He would pass my request on to HR and they would let me know if they could make this exception.

 

Relocation salary adjustment negotiated!

A week later I received a call from the company HR manager telling me that my request for cost of living assistance had been approved. I was being given cost of living compensation for my first twelve months, which could be extended.

My offer letter would be revised to include a one-time payment of $18k, which I would receive two weeks prior to my start date.

I was shocked. I was able to negotiate a salary increase to relocate to New York.

By figuring out what they could be flexible with, I was able to negotiate for a significant amount of money for a cost living ajustment. A few months after starting my new role I learned that I was the only new hire who was receiving the cost of living adjustment because I was the only one who had asked.

 

What advice do you have for negotiating a better offer?

It’s a simple step that’s easy to overlook: figure out what they can offer before you ask for something. 

I assumed I could negotiate for a higher salary, but they couldn’t offer that. I didn’t do my homework and I wasted their time and my time asking for something that wasn’t an option.

 

Need more tips for negotiating a cost of living adjustment?

Did you know that negotiating your salary one time can add over a million dollars to your earnings over the course of your career?

That’s kind of a big deal. And so is the confidence you get from knowing that you can ask for and get what you want and need in your career.

My negotiation guide gives you the negotation framework you need to persuasively make that ask. We’re not talking negotiation theory that works in a classroom but not in an office. This is a simple framework that gives you the confidence to use your own voice and get what you need: research. prep. ask. 

Fill out the form below and I will send you the kind of email that makes your day. It will have the link to download my negotiation guide so you can start earning more money. Get the salary you deserve, fill out the form below.

 

This article was originally published on December 6th, 2016 and updated on October 14th, 2019.

research. prep. ask.

Did you know that negotiating your salary one time can add over a million dollars to your earnings over your career?

  • I'll show you how with my 3 part system: Research. Prep. Ask.
  • 3 videos included with practice scrips
  • Free access to Not Your Father's Negotiation Course, a $97 value

Erica Gellerman Bio The Worth Project

Erica Gellerman is a CPA, MBA, personal finance writer, and founder of The Worth Project: personal finance and family travel. website. Her work has been featured on Forbes, Money, Business Insider, The Everygirl, The Everymom, and Lifehacker. When she's not writing about personal finance you can find Erica exploring Europe from her temporary home base in London.

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