Have you received a tech job offer and want to know if you can negotiate?
This post is specifically designed for candidates who are about to receive or have already received a tech job offer.
It aims to help you increase your total compensation and salary by providing expert negotiation strategies.
We wrote this salary and compensation negotiation guide with help from 5 recruiters, hiring managers, and salary negotiation coaches at FAANG+ and startup companies like Microsoft, Amazon, Meta, Lyft, and Doordash.
Thinking of negotiating your offer? You probably have concerns like:
Negotiating isn't for everyone, but in most cases, you can push for a larger compensation package during the hiring phase.
Plus, companies will never rescind your offer for simply negotiating. It doesn't hurt to research how competitive your offer is in the first place.
Negotiating your compensation may seem scary, but ensuring you receive fair pay for your role is vital.
Remember, negotiating is expected, so don't be afraid to speak up.
Do you know how much your skills are worth on the job market? Candidates often make the mistake of not researching enough during the negotiation process.
Ultimately, leverage is what matters most in determining a compensation package.
If you didn’t take this job offer, what other options do you have? How do they compare to this offer?
To determine your market compensation rate, start by researching other similar positions and candidates with platforms like:
Like candidates, companies also use these platforms to gauge compensation ranges when hiring.
In California and New York, companies must publish compensation bands with job postings, making market compensation rates publicly available.
Use these data points to try and benchmark your offer:
Create a salary range based on research on what comparable positions generally pay.
Once you’ve collected all this data, you’ll have a better sense of market compensation rates for the role you’re aiming for and the specific opportunity you may be interviewing for.
Create a "thrill number" based on your financial situation and compensation research. This number is your ideal salary.
It is the highest salary you would accept and can be used for counteroffering.
Make sure it is realistic but higher than current market rates.
Consider an offer 30% higher than the market rate you researched.
Negotiating based on your market compensation can give you leverage, but having alternative offers is even more effective.
Market compensation can be a vague concept, with some companies claiming their rates differ from those based on your research or offering nuanced details like benefits or equity that make their offer stand out as competitive.
However, with an alternative offer, companies can't easily argue that their compensation package is competitive if it's lower.
So, how can you ensure you have alternative offers? By planning your job search ahead of time.
Waiting for recruiters to reach out to you with opportunities minimizes your chances of having alternative offers and losing leverage in the negotiation.
Think of your job search as a process, like evaluating multiple options for buying a home or a new car.
Here are some tips to ensure a comprehensive job search process:
Mentioning that you have another offer can encourage the recruiter to increase your offer.
Evaluate multiple options and compare the economics of each.
Congrats on reaching the recruiter offer stage!
This call is typically the final stage of the offer process, where the recruiter confirms they are preparing the offer and asks about your salary and compensation expectations.
Avoid sharing your salary expectations during this call.
Instead, focus on evaluating the offer. Sharing your expectations at this stage can set a lower negotiation baseline and potentially result in a lower offer.
Make the company propose the first number and then negotiate.
During the call, say things like:
Tell the recruiter you need to take some time and will get back to them after the call.
An offer may consist of the following:
There may be even more details relevant to your role, so list any relevant component to the offer.
After identifying critical elements of your offer, you have a list of negotiable terms.
Review which terms are most and least important to you. This will help in your negotiation to know where you can budge and where you need to stand firm.
If you're mainly concerned about saving for your child's college fund, you can prioritize cash over equity.
Let your recruiter know you want a higher cash component and are willing to compromise on equity.
Look for opportunities for mutual benefit, such as agreeing on a start date that works for you and the company.
Consider asking for higher cash compensation as a compromise if there are differences.
When working with your recruiter, focus on gathering all the relevant information about the offer before sharing your preferences.
If asked for your initial reaction, simply express your excitement and request more time to review the offer.
Your priority should be to fully understand the compensation package.
When negotiating, schedule another call with the hiring manager to discuss the role.
If the recruiter doesn't offer it, ask for it yourself.
During the call, your goals are to convince the hiring manager of your fit, better understand the offer and company, ask questions to help negotiate the offer and determine your interest in the company.
Approach each goal separately during the call.
To increase your chances of negotiating a higher offer, show enthusiasm to your hiring manager by asking questions about the role. Here are some questions to ask:
Instead of talking about yourself, focus on understanding the role and the hiring manager's pain points that this role aims to address.
Spend time clarifying questions about the offer or the company by speaking with your hiring manager.
Here are some specific questions that you could ask:
If it helps, you can ask your hiring manager about negotiation-specific topics.
Although offers are not just about pay, it's still important to understand the financial aspect of each one.
Create a spreadsheet to compare them side-by-side.
Consider including your current offer for comparison. Here's an example table to evaluate your options.
Consider the following:
Unlike big tech companies with predefined salary ranges, startup offers often involve custom compensation packages that may include a base salary and equity in stock options or phantom equity.
Before negotiating an offer, conduct extensive research on the company. Start by looking into the startup's funding rounds, potential for growth, and financial stability.
Understanding concepts like series A, B, C, and D funding rounds is crucial to assessing your equity's value.
By knowing the company's funding history, you can determine its ability to succeed and generate returns on your equity.
To evaluate the financial stability of a startup, inquire about its
This information provides a comprehensive view of the company's financial position and likelihood of success.
Key financial indicators include year-over-year revenue increase, cash reserves, and outstanding shares. While recruiters may not have all the answers, independent research and engaging with investor relations can provide valuable insights.
Effective negotiation with startups requires a strategic approach. Start by asking for 20% more than the base salary as a starting point for negotiations.
This tactic allows room for a middle ground where both parties can reach a satisfactory agreement.
Additionally, if you have competing offers, leverage them to your advantage. Startups may be more willing to negotiate equity than other forms of compensation.
Consider whether the compensation package aligns with your goals and expectations.
While base salary is essential, consider the potential for equity to provide significant returns in the future. Evaluate the startup's long-term benefits and growth potential to make an informed decision.
Startups offer exciting opportunities for growth, and with the right approach, you can navigate job offers and secure a compensation package that suits your needs.
This advice comes from Zaheer, the co-founder of Levels.fyi, in a mock negotiation simulation with Exponent.