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How To Negotiate A Better Salary In Tech

Adam Dangoor 23 February, 2021 | 6 min read

Negotiating a better salary is a challenging task for many people interviewing for a new job.

This article provides a few tips and tricks to help you negotiate great compensation at the discussion stage with a company once you have completed the interview process.

Negotiation logistics

Typically a compensation negotiation will be with a recruiter, your future manager (potentially the “hiring manager”), or someone high up at the company (a founder, or VP, or head of a department).

It may be that this is prompted on-site, at the end of the interview process, on the phone after an interview process, or by an email that includes offer terms.

I typically recommend that you discuss the details of an offer on a call, rather than by email. This allows for nuance and a bit of back and forth.

Often a negotiation discussion can be very short, maybe a couple of minutes.

If you receive an email that includes offer terms, and you would like to negotiate the offer, you can use the following template:


Hi ,

Thank you very much for sending me the offer.

I thoroughly enjoyed meeting the team and I am excited to join your company. When would be a good time to have a call to discuss the offer, I am free from … to …,

Thank you, Adam


What you can negotiate for

There are multiple things that can be negotiated for. The order of negotiation should be in order of the most important. For example, if you care primarily about the base salary, and then the next most important is the signing bonus, discuss the base salary until that conversation is complete, and then bring up a signing bonus.

Compensation

  • Base salary.
  • Equity (RSUs or stock options).
  • Signing bonus.

Non-compensation

  • Vacation time.
  • Part-time work.
  • Working from home.
  • Job responsibilities and KPIs.

Other benefits such as:

  • Accommodation type on company travel,
  • Phone allowance,
  • Maximum work travel time.

Determining your minimum compensation

Choosing the minimum that you would accept is the first step in determining your negotiation strategy. The inputs to this include:

  • Your current compensation
  • Your market value

Determined by either research or other offers. Research may include Glassdoor, speaking with peers, or speaking with recruiters.

  • How much you want or need the job

If this is your dream job, you may be more willing to join for a lower offer. This may be a stepping-stone job and therefore justify a lower minimum.

Discussing your current salary

Candidates are often asked what their current salary is. This is usually so that the company can determine what is the least they can get away. It is also used to level the candidate.

Some people may choose to say a higher base salary than they are truly on. While others say something like “My current contract does not allow me to disclose my salary”.

If you are making a career move which does not expect a salary increase, such as a move to a smaller company, or to a role with less responsibility, it may be sensible to disclose your current salary. For example, “I am currently earning $XXX but I understand…”.

Key phrases (base salary)

The most effective “vibe” is a positive one. Show that you are excited to join and that you want to be compensated fairly.

You could say things like:

  • “What is your range?”
  • “I’m looking for a competitive offer - and for me that’s an offer in the region of $-k.”
  • “I have been speaking to people similar roles, and it seems that a competitive offer is around $-k”
  • “Other roles I’m looking at seem to be closer to $k region. Is there any way we can get close to that?”
  • “Is there any room for negotiation on that?”
  • “Can we make that a round number?”
  • “Money is not my primary motivator, but $k was my expectation”
  • “I’m really excited about the role, but that just does not work for me” (if they truly stick to a number that you would not accept)
  • “What’s the highest you can go to?”
  • “That all sounds good. Could you get that to me in writing so that I can have a think on it?”
  • “That’s a little lower than I was thinking of - I was thinking closer to $k, can we meet in the middle?”

Equity

Valuing equity is difficult and is a personal choice. See this or this for an overview of how to value options at a startup.

Appreciate that the person that you are speaking to may value their equity highly, and you should respect that. If you do not highly value the equity, do not prioritize it in a negotiation, but do not say that it does not matter (much) to you.

If the person you are speaking to tries to stop discussion about the base salary, and turn the discussion to equity, you might say “Right now, base salary is important to me for family reasons” for example.

Equity can be negotiated within the following parameters:

  • Amount
  • Vesting period (typically four years with a one year cliff - i.e. 1/48th per month, but you only get the first year’s worth after 12 months)
  • Reducing or removing the cliff
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Signing bonus

Signing bonuses are typically given after 6 or 12 months at a company as a one-off payment. Companies give signing bonuses for multiple reasons, including:

  • It allows them to report “fair” pay when hiring someone at a different pay rate to someone else with the same job title.
  • It allows them to make predictions and gain investment on the basis of a lower salary forecast.

For high-end software engineering jobs in San Francisco for example, a signing bonus may be in the region of $20-25k.

Key phrases (signing bonus)

  • “Can we talk about signing bonuses?”
  • “Can we perhaps make up the difference with a signing bonus?”

We don’t do signing bonuses

  • “Oh… I was discussing the base on the assumption that there would be a signing bonus”

The offer comes with a $Xk signing bonus or What were you thinking of?

  • “From my research, it seems like a $5-10k signing bonus is fairly standard”

Where have you got that from?

  • “I have been talking with recruiters about other roles, and I have discovered that this seems to be standard”

Example discussion order

Attempt to find their range

  • “What is your range for this role?”
  • This can come after a verbal offer, or as a response to them asking you what you’re looking for

If they give a range that is acceptable, go for the top of the range

  • “Great, the other opportunities I am looking at are around the top of that range”

If they do not give you a range or their range is not acceptable to you, give your range

(Optional) Justify your range, for example:

  • "Let them know that you have other options"
  • Explain that their range is beneath your current compensation
  • “From discussions with recruiters, it seems that this is a little below what I should be looking for”

Use the “Key phrases” to get to the highest verbal offer for a base salary.

Consider other negotiations, such as signing bonuses and equity.

Initial offer scenarios

An initial offer may be verbal or written. It will likely fall within one of the following categories:

  • Below your minimum.
  • Low, but you would accept.
  • As expected.
  • Higher than expected.

Also, they may refuse to give an initial offer before you tell them what you are looking for.

What are you looking for?

  • “I am looking for a competitive offer”

If they push for a number:

  • “I am looking for a competitive offer, and that is in the region of $-k”, where the range is at the high end, and you would be happy with a number that they negotiate you down to.If you are concerned that $X is too high, and it may rule you out, you can say: “but the salary is not the most important thing to me, and I am happy to be flexible”

Below your minimum

Use the appropriate “key phrases” but let them know politely that this is not going to work.

“Thank you for that offer, I would love to join, but unfortunately that is below what I could accept”

If they push to find your minimum: “The minimum I would take is $k”

Low but you would accept / As expected / higher than expected

Use the key phrases, but set the tone as appropriate. Be careful not to signal that you are rejecting this offer. Instead, your goal is to get across that you are happy, but would be more likely to join if the offer were higher. The most positive tone being:

“That is a great offer, but I was hoping for something more in the $-k region”.

Typically, you will choose a counteroffer that is within 20% of their initial offer.

Outcomes

  • “Sorry, that does not work for me, but keep me in mind”.
  • “That sounds good, really glad we could work something out. Please could you send me that in writing and I will get back to you as soon as possible”.

If they push you to decide on the spot, you can defer this with:

  • “I have to discuss this with my family, and I prefer to not make important decisions on the spot, but I will get back to you tomorrow”.

Preparation

  • Research what your range should be.
  • Determine what the minimum that you would take for this job is.
  • Schedule a practice negotiation.
  • Extra reading: salary negotiation.

I'm Adam, an experienced software engineer and a professional interviewer. For over two years, I have been working with candidates in the software industry and other industries to improve their chances of landing a great offer. If you need help with your next interview make sure to contact me.

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