Salary negotiation is a crucial part of getting the job you want and the salary you deserve. Most often, your initial offer will be on the lower end of the spectrum, regardless of the demand for your talents. Even high-demand professionals like talented software engineers get lower offers than the company would be willing to pay.
It’s on you as a candidate to know your worth and ask for the salary you think you deserve. Here’s how to effectively negotiate your employment compensation package.
Always do it
You may get so excited at finding a job that you sign the offer letter on the spot. Or you may feel awkward about asking for more money when you feel like the company is giving you a fair salary. Don’t. In most cases, the company is lowballing you to free up budget space. Much like you, they have a low and high end salary spectrum that they’d be willing to pay you, and they usually offer very low in that range.
You won’t get a salary in the higher end of the employer’s range if you don’t ask. As much as they want to bring you on their team and have you start contributing your skills, employers always have budget and cost-saving in mind. It’s your responsibility to encourage them to compensate you properly for the value you’ll add to their team. So no matter how awkward you may feel about the salary negotiation, it’s vital that you have that conversation.
Have a range in mind
Creating a proper salary range requires an analysis of your prior salaries, a comparison of the salaries of others in your role, and the salaries of others at the company you’re negotiating with.
Start by analyzing your own salary growth through career changes and promotions. Then, use sites like Glassdoor and Salary.com to look up salary information for the role, company, and industry. If you're applying to startups you can also gauge salary and equity expectations by looking up the company on AngelList.
Be honest with yourself as to what you would find acceptable and what you would be happy with. Use that feeling and the information you gathered in your research to set out a salary range. Then make sure you're asking for the high end of that range. It's okay to have a high starting point, as it adds room for negotiation and is more likely to be acceptable than you might think.
Pro tip: If you’re looking to be relatively conservative or can't find proper salary information online, you can use a simple model of your previous salary plus 10-15% extra.
Use your ammo wisely
For most candidates, it’s best to ask for the upper, not lower, part of the range they have in their head. It’s common for people to underestimate their compensation potential. It is a risk, though, so use research from salary information online and your own prior salary to inform your range. When you have the salary conversation with the employer, bring the facts and figures necessary to make your case in a compelling manner. Reference other employee salaries, industry standards, and your own salary growth to back up your salary requirements, if necessary.
And if you have multiple offers on the table with time on your side, use that information wisely to go back to the company you most want to work for and ask for higher compensation. If your other offers provide significantly higher salaries than your ideal company, you can use that as ammo in your negotiation.
Just remember that companies have a high end of their range that they can offer, and they may not be able to give you what others are offering. It’s up to you to weigh how important salary is in comparison to the company you work for. Have a range in mind that you’d be willing to accept in relation to your other offers.
Know the alternatives
Finally, remember that you can also negotiate on perks and benefits like equity, retirement fund contribution, additional paid time off, health insurance, a gym membership, or travel costs. Your entire salary and benefits package is negotiable, so make sure you read through your initial offer carefully, take stock of the things that are most important to you, and negotiate on them alongside your salary requirements. Set out those things that are an absolute must for you and those things you’d be willing to compromise on or sacrifice to get what you want.
This is a great negotiation option when you can't get the company to budge on salary. Many companies set out separate budgets for salary and other human resources-related functions, allowing them to tap deeper into their overall budget for your compensation.
Salary negotiations aren’t as tricky or high-stakes as they sound. The company offered you the job for a reason. They want you on their team, and they’re willing put up the money to bring you on. It just requires a bit of intelligent haggling to get the compensation you want.
Asking for a higher salary leaves room for further negotiation, and the company will almost always come back with a number higher than their initial offer. Just make sure that your expectations are reasonably aligned with the industry and company trends. Be flexible where you can, and don’t hesitate to turn down an offer that you think isn’t worth your time.
Bonus: Proper timing is important
Thinking about salary now is not just important for your own expectations, but also for answering an unexpected salary question from the interviewer. Some companies will ask you to name your price in the interview process, and while you can say that you're interested in the role and don't want money to get in the way, persistent interviewers will want an answer. Having a range on hand will help you avoid asking for too little or too much.
But what do you do if they never pop that question? Knowing when to bring up salary is a stumbling block for many job seekers. Doing it at the wrong time can put out a bad vibe and present you as a too money-minded candidate. Waiting too long can result in a lot of wasted time and effort if the salary is an order of magnitude lower than you initially expected. So when exactly should you bring it up?
If your first interview is a phone screen with a recruiter who will be handing you off to a hiring manager, take the time at the question and answer section at the end of the call to ask a short, quick salary question. Recruiter interviews are there not just for companies to weed out false flag candidates, but for you to learn more about the role as well.
But if you're immediately in touch with the hiring manager, it gets a bit more tricky. In this case, you can deflect as long as possible until you finally get a number from them, wait until you receive an offer, or ask during the interview process. All three are risky, and it's up to you to determine from the attitude of the hiring manager which path you should take.
If you decide to go the route of asking in an interview, don't let it be the first or last question you ask, and make sure you have great questions that precede and follow it. That way you'll be remembered for the conversation you had rather than the salary question.