Negotiating Your Tech Offer
By Aishwarya Bhandari and Jui Hanamshet
Content
- Understanding Your Offer
- Collecting Data
- How Much to Ask
- Whom to Ask for Help
- Understanding Your Leverage
- When to Negotiate
- Mediums of Negotiating
- Questions to Expect from Your Recruiter
- Conclusion
Note: This information is based on our experiences successfully negotiating new grad software engineer offers with Microsoft.
Understanding Your Offer
Tech companies typically have 3 components to their compensation package
- Base salary
- Stock awards: These are typically vested over a few years.
- Signing/Starting bonus: A signing bonus is given at the time you sign the offer. A starting bonus is given within a certain period of time after you start. The starting bonus may be vested over multiple years.
Vesting Schedule: Stocks are released over time which is called the vesting schedule. For example, let’s say at a company, stocks are vested over 2 years equally, so in the first year you would get 50% of the stocks and in the second year, you would get 50%. It is important to look at a company’s vesting schedule in accordance to how long you would stay there.
In addition to your compensation, you may get benefits such as health insurance, 401k matching, paid vacation and sick days, tuition assistance, meals etc.
Collecting Data
To get reliable data, ask your peers for their offer numbers. Millennials and Gen Z are typically more open to share numbers because they are aware of pay gaps. Many company employees also have spreadsheets of collected data; try to get access to those. Blind, levels.fyi, and H1B data are reliable to get a ballpark number but they don’t represent the upper limit. Glassdoor may be unreliable.
How Much to Ask
Once you have collected data on what your peers are getting, you can determine what the upper limit is. Bonus usually has the most variance followed by stocks and then base salary. Base salary is usually tied to your level; you might not be able to increase your base. Stocks grow in value over time. Bonus is quick cash.
Some companies also negotiate for benefits. With this in mind, figure out what’s most important to you and what leverage you have. We talk about leverage in another section.
Whom to Ask for Help
Get multiple people’s opinions; we had 10 people review our negotiation emails. Reach out to people who have prior experience negotiating and who have your best interests at heart such as:
- People in the company you’re negotiating with, ideally who negotiated in the past 3–5 years
- People in similar companies, ideally people who negotiated recently
- Peers who negotiated around the same time as you will, these people will have the most accurate information with upper limits. Take their advice with a grain of salt as most of them might be doing this for the first time.
- If you worked with the company before and feel comfortable, you can ask your mentor, manager, and team members for advice.
Understanding Your Leverage
Understanding your cards and how to leverage them is essential in successfully negotiating. There are a few main negotiating factors:
Competing offers
- Your recruiter may ask you for numbers of the competing offer, but it is best to just say what aspect of this competing offer is better (such as bonus, stock, etc).
- Competing offers from big tech companies, unicorn startups, and trading companies (aka high paying companies) have large leverage. Recruiters typically know the compensation that people receive from these companies, and this makes them feel more pressured to give you the numbers that you want.
Return Offer After Internship
- Experience at the current company helps solidify that you are a promising employee, and positive performance reviews from your manager and colleagues also show that you are worth the investment as an FTE.
- You should mention any business impact that your intern project had in your negotiation talk/email. For example, if your project was deployed or is used in production, this is worth mentioning!
Interviews with competing companies
- You should mention any and all upcoming interviews, especially if you are in the final round stages with directly competing companies.
Other Factors
- Having an advanced degree like Master’s or PhD
- Prior internships or work experience
When to negotiate
We recommend negotiating when you have the most leverage. For example, you could negotiate when you have competing offers and/or interviews.
At the latest, we recommend you negotiate at least 2–3 weeks before your deadline; this allows your recruiter to have enough time to respond to your emails and talk to the team. You should double check with your recruiter when is the latest time you can negotiate.
If your recruiter brings back a number that you are not completely satisfied with, don’t be afraid to counter the offer with reason. Be respectful while doing so.
Mediums of Negotiating
Email — You have the opportunity to re-read your email, get feedback from people, and think properly before sending it. However, you cannot deflect on questions; if the other side asks for numbers, you’ll most likely have to provide it.
Here is a rough structure as to how we formatted our negotiation emails. If you are looking for a template, feel free to look at Courtney Thurston’s blog.
Hi Recruiter,
Write a thank you message
Say you are following up regarding your offer
State your leverage i.e. previous internships, positive performance reviews, competing offers, business impact, competing interviews, etc.
State your anticipated numbers. There are two ways to state your anticipated numbers: break down the compensation by base, stock, bonus, etc., or state your anticipated total compensation.
If you are confident that you would want to sign the offer for this company if they were to meet your numbers and withdraw your application from other companies, say that! This shows commitment.
Assure the company you want to make this work. Sometimes, recruiters/managers might use their social capital to get you the offer. By assuring them that you’re interested in making this work, you give them the confidence they need to bat for you.
Conclude
Call or in-person meeting — You won’t have the opportunity to think or get feedback from other people. You may get some pushback. However, you can deflect questions that require you to answer specifics such as competing offer numbers.
Your recruiter will try to gauge how you react with the numbers that they give you. We recommend vocally showing interest in wanting to sign the offer with this company, but try to not sound overly excited and remain composed. We recommend sending a negotiation email first and then, your recruiter may ask for a follow-up call.
Questions to Expect from Your Recruiter
We have compiled a list of common questions you will get asked and prepared sample answers. The key here is to not divulge too much information or show all your cards out right, but that doesn’t mean you should lie about your circumstances.
Q: How much is the other company offering you?
A: I prefer to not give numbers but the other company has a higher base and bonus. Tip: By not giving specific numbers, you leave the other side guessing. Most likely, they will guess higher than what you probably have.
Q: Which companies do you have interviews from?
A: I have interviews from Google, Amazon, other tech companies, and a few startups. Tip: The other side will again think of more competitive companies than you might have. If you have a direct competing interview, mention it here.
Q: When is your competing offer deadline?
A: I have some time; the other company is quite flexible with its deadline. Tip: The less time you have to decide, the more pressure you have. A rapidly approaching deadline works against your favor.
Q: We can only do so much, will you sign?
A: I will think about it, talk to my mentors, and explore other opportunities. Tip: NEVER agree to anything unless they meet your ask or you’re truly comfortable with it. Saying you need time to think is a valid answer.
Q: What number will you take to sign?
A1: I will sign the offer with $x number. Tip: If you have a number in mind, say it.
A2: What is your range for this role? I will need to think about this. Tip: By asking for a range, you put the ball in their court to give you a number.
Conclusion
Ultimately, negotiation is important and you should advocate for compensation that you deserve, but it is essential to acknowledge that the numbers you receive are not the sole factor in determining your worth and competency. We hope that our insight and advice have been useful for you, and good luck! :)
