Salary negotiation is often an expected part of the interview/job hunting process. In fact, the moment a job offer is given, it is the moment where you–the job applicant– have the most power. It is a lot easier to ask for what you want upfront. Once you are in the role, it is going to be a lot harder. This is why salary negotiation needs to happen early.

Why do I want to negotiate?

This is an important question. People, especially women, can get pretty passive in the process of negotiating. In their mind, they may think that “It does not matter.“,  “I’m okay with it.“, “I don’t need the extra $5k or $10k“, or “I am scared that they will rescind the offer“.

Approximately 40% of the people who received an offer will negotiate. That means most people don’t. But of the 40% that do, it’s mostly male.

One common belief is that by participating in negotiation or being too aggressive with the process, the company will rescind the offer.

According to Nerdwallet, 90% of employers have never rescinded an offer because an entry-level candidate tried to negotiate.

As long as your ask is reasonable and well-informed, you should not hold back on advocating for yourself

There is a certain amount of salary + equity that companies can offer. The recruiter will always try to under offer. This difference in compensation is called a buffer. For instance, if the recruiter has 100k in salary + 10k equity, they typically would call the candidate and say “Congratulations, we want to offer you the position, it’s 90k salary + 5k equity”. If the candidates do not ask for more, they will not get it. This is good because the recruiter is helping their company find qualified candidates at a discount (your compensation).

However, if the recruiter immediately presents the offer of 100k salary + 10k equity, and the candidate asks for more, then the recruiter needs to go back to management and get approval. This does not make the recruiter look good. 

If you are not asking for something, you are probably leaving something on the table.

It is expected that you’re going to negotiate.

80% of people who negotiate will get something. You may not get the max but even a couple grands can make a significant difference over the course of your career.

Negotiation does not need to be specific to salary + equity. It can be things such as benefits, relocation, maternity/paternity leave, time off, or WFH (work from home). There are a lot of things you can ask for during negotiation. And again you have the most leverage when you have the offer.

There will be times when the recruiter cannot increase the offer. This can happen if they reach their department’s budget for that particular role. A strategy here is to ask for a higher level. This mean they will offer a more senior position with more responsibilities. The compensation package will increase to reflect the changes. You may need another round of interviews to justify this change in leveling.

Your salary should never go down. In reality, when you change jobs and get raises/promotions, you will have even more opportunities to ask for raises. As you change roles/careers, you will often see a 10% increase here and a 20% increase there. When you do not negotiate, it creates a pay gap. Even a 10% ask can have a pretty big impact over the span of one’s career.

Again, you have the most power when you have the offer.

Zone Of Possible Agreement (ZOPA)

If you have ever been to a dealership to purchase a car, you will know how the dealers would want to sell the car to you at the highest possible price. Your job, as the customer, is to negotiate the price down to something you can afford. This is often refer to the Zone of Possible Agreement (ZOPA).

Zone Of Possible Agreement is the range in a negotiation where the parties involved can find a common ground, bargaining range or bargaining zone.

One of the biggest pieces of advice is to anchor high. That is the key.

If you believe you can make 90k, you can live on 80k and you will be happy with 100k, then start at 100k. Start high. Once you throw out a number, you can go down.

Currently, there are 21 states where it is illegal for companies to ask you about your salary with your current employer. Check if your state is included here.

You should always be ready to answer the question “What would you like to make?” and add $10k or $25k to it!  You need to let them know that you’re aiming high. This is a good tactic in life and negotiating is just always anchored high. Ask for more than what you need to leave you room for negotiating.

Equity

Equity is a big component. If they won’t tell you how much your equity is worth, you need to value it at zero. Every company should tell you your equity worth. Recruiters have to disclose how much the equity is worth. You want to know how much the equity is worth today. If they can’t tell you that, you can’t use that as part of the value of the offer as you do not understand how much your equity is truly worth. You need to know what is the strike price and what is the fair market value.

Preparation

1. Research. Before negotiating, you want to do research on Glassdoor, levels.fyi, payscale.com, salary.com on comps for your specific position. You need to consider the city you’re living in. If it is in an area with a high cost of living, you need to ask yourself “What do I need to live comfortably?” You need to add up your rent + grocery + living expenses.
2. Practice. Another advice that I cannot emphasize enough is the need to practice. I still remember the first time when I called my recruiter to negotiate, both my hands were trembling as I rehearsed the script that I had in front of me. It was scary! Ask a friend or family to pretend to be the recruiter and rehearse to them on why you deserve more compensation. You will see improvement as you practice and negotiate more.
3. Recruiter Calls. When you have calls with recruiters in the beginning stage of your job search, you want to mine recruiters for data. They are an excellent source of information.
   • You can say something like:
     • “What are people with my experience and my title making?”
     • “Can you tell me more about the position and the level that we are discussing as this will determine my salary expectation? What are people in this role and level making?”
   • The recruiters will tell you the salary range for the position.
4. Interview Broadly. Go through an interview process with a company that you’re not super interested in just to get a comp. This gives you even more leverage as this can be a competing offer. Everybody does it and who knows maybe you’ll end up liking the company you interview with. However, I need to emphasize: do not overwork yourself and interview with 50 companies that you are not interested in. You will burn out by the process. The goal here is to get a competing offer. Once you have 2 or more offers on your table, that is power. This is when you tried to have those companies negotiate with each other. You can increase your compensation dramatically by doing that.
5. Do not negotiate over e-mail. If you say something that is way out of the range, you may never hear a reaction from them and they may not even respond to your email. You can hear their reaction and ask them about the budget that they have for the position. You can immediately follow up with “Okay, we can make that work“. It creates an opportunity to negotiate when them face to face or over the phone.
6. Make a list. This is one of the harder pieces of the preparation process. You need to know: what you would need to live comfortably in your area while planning for your future. No one knows what your priorities in life is–except for yourself.
   • Here are some questions that I like to ask recruiters based solely on my priorities:
     • Retirement related: Is there any retirement plans? Such as 401(k) or 403(b)? Is there Traditional and/or Roth 401K? Is there any 401(k)/403(b) Match? How much is the match? When will the employer start the match?
     • Health related: What type of health insurance does the company offer? Is it a HSA/FSA? If it’s HSA, is there an employer match? Is there dental/vision insurance? Will the dental insurance cover orthodontics (braces)? Is there fertility assistance? What are the terms of maternity or paternity leave? Is there Employee Assistance Program (EAP) for counseling? Is there any adoption assistance? How many sick days will I have?
     • Investment: Is there an ESPP (Employee Stock Purchase Plan) Program? And when can I start participating in it?
     • Paid Time Off (PTO): How many PTOs will I have? Will unused PTO be paid out? Or can it be rolled over to the next year?
     • Bonus: How often are performance review conducted? Is there a promotion cycle?
     • Career growth: Does the company pay for any Professional Development Programs (such as LinkedIn Learning, Udemy, etc.)? Or Professional Conferences?
     • RSU (if this is part of your offer): Can you tell me more about the vesting schedule for the RSU? When will my RSU be fully vested?
     • Other: What is the company’s policy on Working From Home (WFH)? Is there company gatherings?
7. Always Stay Positive. Negotiation doesn’t need to feel mean, personal or aggressive. It can be friendly.  Flattery always works well. 
   • So saying something like:
     • “I’m so excited to work with you. I’m excited for what we can achieve together. The only thing I want to understand is if there is anything we can do in terms of compensation. It’s a bit lower than what I anticipated for and what I needed to live comfortably”.
   • You’re not on the defensive. You warm them up. Even things such as:
     • “Speaking with some other companies, ….”
     • “I have another offer, …”
     • “From research I have done, … It’s been $10k higher than the offer you gave me“
   • Try to avoid saying “talking to my friend”

“What I’m worth” OR “What I need to live comfortably”

What I’m worth? It’s easier to do the “What I’m worth?” meaning you have a competing offer. That’s all the data you need. It is recommended that you interview with several companies at the same time so you have the leverage there.

What I need to live comfortably? If you do not have another offer, that is fine. You just need to do research and talk to people, you need to make a case on why you need more money.

Silent Treatment

This is an important part of the call.

After you throw in a number, you want to stop talking. You want to hear their reaction. Recruiter will say things like “Oh, I don’t know. That’s gonna be hard. Let me see what I can do. I’ll talk to my boss and I’ll get back to you”. Don’t forget, recruiters have buffers and they say that to acknowledge that you want something and try to help you get it.

Good luck