How to negotiate your job offer without losing your integrity — Part 2

In the previous post, we talked about why it is ethical to negotiate your job offer. In this post, we’ll cover the pre-work that you’d need to do before embarking on an offer negotiation.

Step 1: Know how much the market pays for your skills

Like we discussed in the previous post, we live in a capitalistic society where your labor carries a certain price tag. This price tag is set by the market forces of demand and supply. Knowing this value up front is the first step towards a healthy, ethical, and productive negotiation.

I can’t speak for other industries, but if you’re in tech, it’s relatively straightforward to learn what your market worth is. Websites like levels.fyi give you a clear breakdown on what to expect.

You can play around with years of experience, locations, specializations etc. Given that this is crowd-sourced data in the internet, you can’t be 100% sure this data is accurate. However, given sufficiently large data points available in the site, you can get a sense of what the salary ranges look like.

Step 2: Understand what the target company typically pays for your level of experience and skills

Imagine you have an offer from Google for a Senior Software Engineer. While Google may not publish salary ranges, equity ranges, and bonus ranges for that position, you can infer that data from levels.fyi . Here’s an example:

Step 3: Learn about recent offers that your target company has made

Anonymous forums like Blind are a great resource here. A lot of folks put in their latest offer details in this forum. I’ve found the Blind community to be really helpful — most people on there talking about salaries do genuinely care about pay transparency and will happily give you the data if you ask for it. You can read through historical posts or post one yourself like this person has, and receive a lot of valuable feedback on your numbers:

You can also DM people and you’ll likely get insightful responses. All that said, know that Blind is an anonymous forum, and like with any anonymous forum, there is a lot of misinformation, hate, and negativity. You’ll just have to filter those out.

Step 4: Get accurate base salary information from H1B data

Companies who file H1B visas for their employees are required to publish base salaries to the Government. This data set (I believe?) is supposed to be transparent and publicly available. Aggregator websites like My Visa Jobs give you access to that data along with some rudimentary search and discovery tools.

Step 5: Line up competing job offers

Like with the sack of potatoes example we were talking about in the previous post, unless you have other offers on your plate, it’s hard for you to bargain for your just and fair price. It’s therefore a healthy practice to line up all your interviews and have a few offers on hand before you talk about offer numbers with a recruiter. If you don’t have additional offers, that’s okay. But my point is, if it does give you negotiation leverage (to get you your fair price), why not attempt it and give it a shot?

It’s also helpful to have competing job offers from high paying employers. This gives you a higher negotiation leverage — not only from a numbers perspective, but demonstrating to the other companies that your skills and experiences were considered relevant right now for the industry’s top paying companies.

Should you interview with a high paying employer just to get negotiation leverage even if you have no inclinations of joining them? Well, that’s for you to answer for yourself. But let me put it this way, don’t let companies guilt trip you into thinking that you are wasting their time. Remember, at the end of the day, it’s a capitalistic society, and all you’re trying to do here to get your just and fair price for your labor.

Step 6: Build a stack rank of your personal priorities when it comes to compensation

Most companies have compensation model that comprises of 3 sections: Base Salary, Equity, and a Cash Bonus. It’s important to have your personal stack rank of these three components — this will come handy in your offer negotiation, as we will discuss in our next blog post. Your personal stack rank would likely be heavily influenced by your personal situation. For example, maybe you’re looking to buy a house and are in need of a lump-sum that you can put forth for a down-payment. In this case, you may want to keep the Cash Bonus as your top priority. Or for example, you are looking to grow your long-term savings and feel very bullish about the company’s stock growing over time. In this case you may want to keep the Equity component as the top priority.

Step 7: Understand the target company’s compensation structure

I’ve heard too many folks tell me that their recruiter promised them that the company stock would 3x only for it to stay flat. Please don’t fall into that trap. The reality is that even the best of recruiters is at the end of the day, incentivized to bring you to the company. It’s their job to sell the upside. Good recruiters won’t lie to you but if a recruiter were able to predict the stock market, they wouldn’t be talking to you, they’d be sipping margaritas in their private yacht in the Caribbean.

It’s important to build out average-case, best-case, and worst-case scenarios for yourself and see if this compensation structure makes sense to you. What would your total compensation look like if the stock price were to stay flat? What would it look like if the price were to go down by 10%? What would it look like if the price were to go up by 10%? etc. Modeling out these scenarios will arm you with more information on where your numbers stand. It’s also important to understand how different companies at different stages construct their pay structures — eg. a Series B startup might give you ISOs whereas a Series E startup might give you RSUs. Each of these financial instruments carry with them their own quirks, taxation policies etc. We’ll talk about how to evaluate startup compensation in a different blog post.

Step 8: Know what you’re leaving behind

If you’re leaving your current company to join a new one (as opposed to joining after a long leave / gap), chances are you are going to leave behind a big chunk of money on the table in form of unvested equity, unvested bonus etc. I’d suggest calculating that number — ie the cost of you leaving your current company. You can then use this number when embarking on offer negotiations to see if the new company will give you enough of an upside to counter the cost that you leave behind.

To summarize, arm yourself with the following the data before you embark on an offer negotiation:

• Know how much the market pays for your skills
• Understand what the target company typically pays for your level of experience and skills
• Learn about recent offers that your target company has made
• Get accurate base salary information from H1B data
• Line up competing job offers
• Build a stack rank of your personal priorities when it comes to compensation
• Understand the target company’s compensation structure
• Know what you’re leaving behind

Once you do this groundwork, an offer negotiation process will be less stressful, less emotional, and more economics and data-driven. In the next post, we will talk about how to have these negotiation conversations with your recruiter.