The Negotiation Problem: You Make Offer, Candidate Says “No Thanks”

You’ve found the perfect candidate.

After 4 rounds of interviews, team loves them. You make an offer: RM 120K salary.

Candidate responds: “Thanks, but I need RM 140K. My current company counter-offered.”

Now you have 48 hours to decide: Do you move? How much? Or do you walk?

This moment determines everything:

  • Whether you get this candidate
  • Your salary budget for the year
  • Team morale (if others find out what you paid)
  • Candidate retention (did they feel valued or resentful?)

Get it wrong, and:

  • You lose the candidate (and wasted 4 weeks recruiting)
  • Or you overpay (and compress your salary bands)

Get it right, and:

  • Candidate accepts, feels valued, stays longer
  • You maintain salary bands
  • Team morale stays positive

This guide shows you exactly how to negotiate like a pro.

Salary Negotiation Psychology: Why It Matters

The Psychology of Salary Negotiation

Anchoring Effect (Most Important)

  • First number mentioned anchors the conversation
  • If you say “RM 120K”, negotiations often end at RM 120-125K
  • If candidate says “RM 140K”, negotiations often end at RM 135-140K

Strategy: You anchor first (in offer). Don’t leave room open if possible.

Why Candidates Negotiate

Top 3 reasons:

  1. Expected (72% of candidates negotiate, especially tech/senior roles)
  2. Leaving money on table (fear they’re underpaid)
  3. Testing your commitment (checking if you really want them)

Key insight: Negotiation is normal. Don’t take it personally.

The Cost of Bad Negotiation

Scenario 1: You overpay

  • Offer RM 120K, candidate asks RM 140K, you say yes
  • Cost: RM 20K extra/year = RM 80K over 4-year tenure
  • Team finds out (salaries leak), others demand raises
  • Total cost: RM 200K+ in compressed salary bands

Scenario 2: You say no, lose candidate

  • Offer RM 120K, candidate asks RM 135K, you say “final offer”
  • Candidate accepts counter-offer from current company (RM 135K + retention bonus)
  • Cost: RM 50K recruiting, RM 40K onboarding, 4 weeks lost
  • Total cost: RM 90K+

Lesson: Strategic negotiation costs less than losing candidate OR overpaying team.

Before You Negotiate: Setting Up to Win

Step 1: Know Your Numbers

Three critical numbers:

  1. Salary band for role

    • Minimum: RM 100K (entry-level senior engineer)
    • Market rate: RM 120K (standard)
    • Maximum: RM 140K (if exceptional candidate)

  2. Your budget flexibility

    • Can you move 5%? (RM 120K to RM 126K)
    • Can you move 10%? (RM 120K to RM 132K)
    • Can you move 15%? (RM 120K to RM 138K)
    • Hard limit: RM 140K (walk away if higher)

  3. Non-salary levers

    • Equity: 0.5% (can offer if needed)
    • Sign-on bonus: RM 10K-20K (one-time)
    • PTO: Extra 5-10 days
    • Title: Sr Engineer vs Principal Engineer
    • Remote: Full remote vs office 3x/week

Best practice: Know your maximum BEFORE making offer.

Step 2: Make a Strong Initial Offer

Key principle: Your initial offer should be as close to max as possible (within fairness).

Why?

  • Sets anchor point
  • Leaves less negotiation room
  • If you offer low, candidate negotiates higher

Good approach:

  • Research: RM 100-140K range for role
  • Identify candidate value: Exceptional (top 10%) vs. Good (top 30%) vs. Competent (top 50%)
  • Offer formula:
    • Top 10%: 80-90% of max (RM 112-126K)
    • Top 30%: 70-80% of max (RM 98-112K)
    • Top 50%: 60-70% of max (RM 84-98K)

Example:

  • Role: Senior Engineer (RM 100K-140K band)
  • Candidate: Top 10% (exceptional)
  • Offer: RM 125K (85% of max)
  • Leaves room for negotiation up to RM 135K if needed

Step 3: Set Clear Expectations in Offer Letter

Include in offer:

Dear [Candidate],

We're delighted to offer you the position of Senior Software Engineer at MoneyFlow.

OFFER DETAILS:
- Position: Senior Software Engineer
- Location: Kuala Lumpur
- Start Date: February 15, 2026
- Salary: RM 125,000/year (paid monthly)
- Bonus: RM 10,000 annual performance bonus (if goals met)
- Equity: 0.5% over 4 years (1-year cliff)
- PTO: 20 days annually
- Medical: Full health insurance coverage

This offer is valid for 5 business days. Please confirm acceptance by January 9, 2026.

Best regards,
[Your Name]

Why this matters:

  • Clear terms (no ambiguity)
  • Professional (sets tone)
  • Time-bound (creates urgency without pressure)

Negotiation Happens: The Scripts

Scenario 1: Candidate Asks for More Salary

Candidate: “I appreciate the offer, but I was expecting RM 140K. Can you match that?”

Your response (Option A: You have flexibility):

“I appreciate your interest. RM 140K is above our standard band for this role, but I can see your value. Let me see what I can do. What if we do RM 130K base + RM 10K sign-on bonus? That’s RM 140K total in year 1, and you’re at RM 130K going forward.”

Why this works:

  • Shows flexibility (builds goodwill)
  • Stays within budget (130K, not 140K)
  • One-time bonus doesn’t compress salary bands
  • Candidate feels heard

Your response (Option B: You’re at max):

“I hear you. RM 140K is outside our standard range for this role. I can go to RM 132K, which is 10% above our opening offer. That’s also competitive for the market. That’s my limit—is that workable for you?”

Why this works:

  • Clear boundary (shows you’ve thought it through)
  • Data-driven (references market)
  • Respectful (acknowledges their ask)
  • Final (but leaves door open for non-salary)

Scenario 2: Candidate Has Counter-Offer from Current Company

Candidate: “My company counter-offered RM 138K to stay. How can you compete?”

Your response:

“I understand they’re trying to retain you—you’re valuable. Here’s the reality: Salary alone won’t solve why you wanted to leave. You came to us because [mission/growth/opportunity/team]. At MoneyFlow, you’ll [specific benefit]. I can offer RM 130K salary. I can’t match their number, but I can offer what they can’t: [mission/autonomy/equity upside/team]. What matters more—the extra RM 8K, or the opportunity to [mission]?”

Why this works:

  • Acknowledges their situation (empathy)
  • Reframes (money vs. mission)
  • Reminds them why they left
  • Moves conversation away from just salary

Key principle: Candidates often negotiate just because they can. Remind them why the opportunity matters more than incremental salary.

Scenario 3: Candidate Won’t Accept, Wants More

Candidate: “I appreciate the offer, but I need at least RM 135K. That’s my minimum.”

Your decision tree:

Can you go to RM 135K?
  |-- YES: Offer RM 135K (or RM 130K + non-salary levers)
  +-- NO: Ask "What if..." to find creative solutions

         Non-salary options:
         |-- Extra PTO (10 extra days = ~RM 5K value)
         |-- Sign-on bonus (RM 10K one-time)
         |-- More equity (0.5% to 0.75%)
         |-- Remote flexibility
         |-- Title (Senior to Staff Engineer)
         +-- Professional development budget

         If none work:
         +-- Politely decline
            "We've gone to our max. If circumstances change, please
             reach out. We'd love to work together."

Important: Know your hard limit. If they want more than you can do, walking away is OK.

Non-Salary Negotiation Levers: Creative Solutions

Lever 1: Equity (Works Great for Startups)

Candidate: “I want RM 135K, you offered RM 125K. That’s RM 10K/year gap.”

Your offer:

“What if we do RM 125K salary + 0.5% additional equity? At a RM 50M valuation, that’s worth RM 250K. Over 4 years, that’s RM 62.5K/year equivalent. Total package: RM 187.5K/year. Better than RM 135K?”

When it works:

  • Startups (equity has real value)
  • Growth candidates (want upside)
  • Founder-mindset people

When it doesn’t:

  • Mature companies (equity less valuable)
  • Risk-averse candidates (want cash)

Lever 2: Sign-On Bonus (Works for All Companies)

Candidate: “I’m leaving unvested stock worth RM 30K. Can you make that whole?”

Your offer:

“I understand. What if we do RM 125K salary + RM 25K sign-on bonus? That’s RM 150K in year 1. It covers most of your loss, and you’re still at RM 125K going forward (fair market rate).”

Why it works:

  • One-time cost (doesn’t compress salary bands)
  • Addresses their real concern (lost compensation)
  • Transparent (shows you understand their situation)

Lever 3: Extra PTO (Works for Work-Life Balance Candidates)

Candidate: “I want more work-life balance. Can’t we do RM 135K?”

Your offer:

“I hear that. What if we do RM 125K salary + 25 days PTO (vs. standard 20)? That’s 5 extra weeks off. Worth ~RM 5K/year. Plus, I commit to flexible working (work from home 2 days/week). Does that help?”

When it works:

  • Candidates valuing time over money
  • Parents (need flexibility)
  • Experienced people (burned out on grind)

Lever 4: Title Upgrade (Works for Ambitious Candidates)

Candidate: “The salary seems low for my experience.”

Your offer:

“I hear that. What if we make you ‘Staff Engineer’ instead of ‘Senior Engineer’? Staff-level comes with authority to lead architecture decisions, direct reports eventually, and Board visibility. Plus the RM 125K salary. Does that feel better aligned with your level?”

When it works:

  • Ambitious candidates (want growth)
  • People coming from bigger companies (title matters for network)
  • Those wanting leadership responsibility

Lever 5: Professional Development Budget (Works for Learning-Focused)

Candidate: “I want to grow my skills. I’m concerned RM 125K limits my learning investment.”

Your offer:

“I get that. What if we do RM 125K salary + RM 10K annual professional development budget? You can use it for courses, conferences, certifications—whatever helps you grow. We’ll also pair you with a mentor on our team. That investment in your growth is worth more than RM 10K to your career.”

When it works:

  • Early/mid-career candidates (still learning)
  • Career changers (building new skills)
  • Ambitious people (thinking long-term)

The Counter-Offer Reality: Walking Away

When to Walk Away

Walk if:

  1. Candidate’s ask is 15% or more above your max
  2. Candidate negotiates repeatedly (red flag for entitlement)
  3. Candidate seems only motivated by money (cultural misfit)
  4. You have other strong candidates (no need to overpay)

Example:

  • Your max: RM 140K
  • Candidate asks: RM 160K (14% above max)
  • Your move: Politely decline

“I appreciate your interest. RM 160K is significantly above our range for this role. We’ve gone to RM 138K (our true max). If that doesn’t work, we understand. We’d love to stay in touch for future opportunities.”

Why walking is OK:

  • Shows you have standards
  • Protects salary bands
  • Other candidates exist
  • Candidate who overemphasizes money = higher flight risk

Real Negotiation Case Studies

Case Study 1: Senior Engineer, RM 125K to RM 135K

Situation:

  • Role: Senior Backend Engineer (RM 100-140K band)
  • Offer: RM 125K
  • Candidate ask: RM 138K (counter-offer from current company)

Negotiation:

  1. Candidate: “My company is offering RM 138K to stay. How can you compete?”
  2. Company: “RM 138K is above our band. I can do RM 130K base + RM 10K sign-on. But more importantly, you came to us for [mission]. We can offer that. They can’t.”
  3. Candidate: “Hmm, OK. But I really need RM 135K.”
  4. Company: “What if we do RM 133K + 0.5% equity + RM 5K professional development?”
  5. Candidate: “Done.”

Final package: RM 133K salary + 0.5% equity + RM 5K development

Outcome: Candidate happy (got raise + upside), company happy (stayed under RM 140K max, gained equity leverage)

Case Study 2: Mid-Level Designer, Wants RM 90K vs. RM 75K Offer

Situation:

  • Role: Product Designer (RM 65-90K band)
  • Offer: RM 75K
  • Candidate ask: RM 90K (no counter-offer, just asking)

Negotiation:

  1. Candidate: “The role looks great, but I was expecting RM 90K based on my experience.”
  2. Company: “I see. RM 90K is at the top of our band. You’re great, but not quite top 10%. I can do RM 80K, which is 7% above the standard. That’s fair for your level.”
  3. Candidate: “What about equity or bonus?”
  4. Company: “Good thinking. How about RM 80K + RM 8K annual bonus (if you hit goals) + 25 days PTO (vs. 20)? Plus, you’ll report to our Head of Design, giving you strong mentorship.”
  5. Candidate: “That works.”

Final package: RM 80K salary + RM 8K bonus + 25 days PTO

Outcome: Candidate happy (got raise + benefits + mentorship), company happy (stayed in band, created growth path)

Common Negotiation Mistakes

Mistake 1: Offering Too Low Initially

Problem: You offer RM 100K, thinking candidate will negotiate up to RM 115K. Instead, they ask for RM 130K. Now you’re in bad spot.

Fix: Research. Make strong initial offer (70-85% of max). Leaves room for negotiation, but anchors high.

Mistake 2: Moving Every Time They Push Back

Problem: You say RM 120K. They say RM 130K. You move to RM 125K. They say RM 128K. You move to RM 127K. They keep negotiating.

Fix: After 2-3 moves, state your final number: “RM 127K is my final offer. Can we move forward?”

Mistake 3: Forgetting Non-Salary Levers

Problem: You say “RM 120K is final” when you could have offered RM 120K + equity + bonus + PTO.

Fix: Know all your levers before negotiating. Use creatively.

Mistake 4: Taking Negotiation Personally

Problem: Candidate asks for more money. You feel rejected (“They don’t value us”).

Fix: Negotiation is expected, especially for senior roles. It’s not personal.

The Offer Letter: Clear Communication

What to Include

Dear [Candidate],

We're excited to offer you the position of [Title] at [Company].

OFFER SUMMARY
Position: Senior Software Engineer
Department: Engineering
Location: Kuala Lumpur (3 days office, 2 days remote)
Start Date: February 15, 2026
Reports to: Engineering Manager

COMPENSATION & BENEFITS
Base Salary: RM 127,000 per annum (paid monthly, RM 10,583/month)
Annual Bonus: Up to RM 10,000 (performance-based)
Sign-on Bonus: RM 8,000 (paid upon start)
Equity: 0.5% over 4 years (1-year cliff)

TIME OFF & FLEXIBILITY
Paid Time Off: 25 days annually
Public Holidays: As per Malaysian law
Remote Work: 2 days/week flexible
Professional Development: RM 5,000 annual budget

BENEFITS
Medical Insurance: Full coverage for you + 1 dependent
Dental: RM 1,000/year coverage
Vision: RM 500/year coverage
Life Insurance: 2x annual salary

OFFER VALIDITY
This offer is valid for 5 business days (until January 9, 2026).

Please confirm acceptance by signing below and returning by the deadline.

We're looking forward to you joining the team!

Best regards,
[Hiring Manager Name]
[Title]
[Company]

Key Takeaways

  1. Know your numbers before negotiating (salary band, max, flexibility)

  2. Anchor first with strong initial offer (80-85% of max)

  3. Expect negotiation (72% of candidates negotiate, especially senior roles)

  4. Use non-salary levers creatively (equity, bonus, PTO, title, development)

  5. State final offer when appropriate (“This is my final. Can we move forward?”)

  6. Walk away if needed (protects salary bands, other candidates exist)

  7. Be transparent about constraints (data-driven explanation > arbitrary “no”)

  8. Consider total package value (RM 127K salary + 0.5% equity + bonus + PTO > RM 130K salary alone)

  9. Get it in writing (offer letter with all terms)

  10. After they accept, be done negotiating (no moving goalposts)

Negotiation Checklist

Before Making Offer

  • Research salary band (low, market, high)
  • Assess candidate value (top 10%, 30%, 50%)
  • Determine max you can offer
  • Identify non-salary levers available
  • Know your walk-away number

When Making Offer

  • Strong initial offer (70-85% of max)
  • Clear offer letter with all terms
  • Reasonable deadline (5 business days)
  • Professional presentation

During Negotiation

  • Listen (understand their real need)
  • Explain (your band, constraints, fairness)
  • Offer creatively (non-salary levers)
  • Set boundaries (final offer after 2-3 rounds)
  • Walk away if necessary (standards matter)

After Acceptance

  • Updated offer letter with final terms
  • Clear start date + onboarding plan
  • Communicate with team (salary equity)
  • Follow up on equity/bonus details

About Weizhen Recruiters

Weizhen Recruiters helps companies close offers and retain talent.

What we do:

  • Offer negotiation coaching
  • Compensation strategy consulting
  • Counter-offer response planning
  • Retention planning

Our results:

  • Offer acceptance rate: 92%+ (up from 75%)
  • Salary negotiation success: 85% (candidate happy, company within budget)
  • First-year retention: 95%+ (felt valued at negotiation)
  • Time-to-close: 2-3 days (vs. 1-2 weeks)

Learn more about offer negotiation services

Or book a free consultation to discuss your compensation strategy.