"What are your salary expectations?"
Knowing that you've thoroughly convinced your prospective employer that you'd be an excellent fit for the role, how are you supposed to answer this question? Generally speaking, people want the highest possible salary with the best possible benefits package. However, you're unsure how to answer the hiring manager honestly without giving off the impression that you're being purely motivated by money.
The reality is that it's completely fine to be motivated by money. Unless you're an independently wealthy individual who likes to work as a hobby, the chances are high that you rely on a salary to pay for living expenses and to realize goals outside of work (like purchasing your first home). An employer with good intentions will always want to compensate you fairly for your work! So it's best to be honest about your expectations.
Regardless of your comfort level when negotiating job offers, it's important to remember that you deserve to be compensated fairly for your labor. Learning to negotiate for a better compensation package is a vital skill that can directly impact the quality of your life, and there is some evidence that salary satisfaction can affect performance, motivation, involvement, and inspiration at work.
We'll talk about some of the contributing factors to the gender pay gap, and why it has become essential for women to insist on being compensated fairly. Then, we'll go over some great tips to help you break down the negotiation process.
We’ll cover:
What is the gender wage gap?
A "wage gap" refers to the difference in compensation between two groups. There are many types of wage gaps that can appear depending on gender, ethnicity, sexuality, age, and more, which necessitates an intersectional approach to closing wage gaps across differing demographics.
According to the National Women's Law Center, white women currently earn $0.82 for every dollar earned by white men. The average lifetime losses due to this wage gap in the United States is a staggering $406,280!
5 tips for negotiating compensation
1. Always negotiate
Negotiation is a vital skill that can directly impact the quality of your life. If you're not sure how to navigate those conversations without feeling uncomfortable, then you're not alone. In a survey that collected 1,296 responses from women at major tech companies like Amazon, Microsoft, and Google, 20% of respondents stated that they do not negotiate if the offer is fair, and 47% of respondents said that they always negotiate but find it uncomfortable.
That being said, negotiations are one of the few times when you have the chance to earn thousands for some brief discomfort.
Initiating the conversation
Companies interested in retaining women should be prepared to initiate regular conversations with their employees to make sure that they're being paid a competitive wage. Unfortunately, there can be times when terms of wage determination are left ambiguous, leaving the burden of initiating negotiations with the employee.
In a study published by the National Bureau of Economic Research, researchers found that men were more likely to negotiate their salaries than women when no explicit statement of negotiability was made.
However, when employers explicitly mentioned that they'd be willing to negotiate wages, the gender gap closed. Unsurprisingly, these findings also meant that the gender pay gap ended up being far more pronounced in workplaces where paths to career advancement and salary negotiations were left ambiguous.
What's the worst that could happen?
The worst that can happen is that the employer will reject your terms. The more likely outcome is that you will be able to reach a mutually satisfactory compromise with the employer that improves on the initial offer.
A common fear is that a job offer will be rescinded if you try to negotiate, but this is exceptionally rare.
If fear of retaliation or uncertainty about your value is holding you back from initiating negotiations, then it's even more important that you prepare yourself to negotiate anyway. By preparing to negotiate, you're putting yourself in the mindset to push past ambiguity and hypotheticals.
Even if you've been told that the offer is final, you can still ask if they'd be willing to schedule a six-month review with the possibility of increasing compensation based on performance.
Key points:
- Lean in and be proactive when it comes to negotiations.
- Feeling uncomfortable about negotiating is normal but pushing through the awkwardness is worth it
- Don't let the fear of rejection prevent you from negotiating
2. Determine the market value for your role
The salary band you can reasonably negotiate for shouldn't be based on what you believe your labor is worth but on what the market is willing to pay. You should always negotiate your compensation because, at the moment, the market valuation for professional tech workers is through the roof.
There's plenty of demand for skilled tech workers, and the competition between companies to secure talented employees gives the hiring manager room for negotiating salary and benefits.
Entry-level software engineers, engineering managers, designers, product managers, and the like can expect to make anywhere between $120K to $250K in annual compensation. With experience, this compensation package can jump up to $300K and upwards of $1M.
So, even if you're reluctant to negotiate because the compensation being offered seems fair, you should still ask for some time to consider the offer and prepare to negotiate. Remember, they want you, and doing your due diligence will ensure that you're not underestimating the value you'll add to their company.
Furthermore, big tech companies like Google, Amazon, and Netflix typically expect their candidates to come prepared to negotiate. It may be easier to approach negotiations by reminding yourself that the hiring manager is prepared to make concessions to secure your talent. These companies are often competing with each other for a limited pool of skilled workers, so negotiating is almost always in your best interest.
To determine your market value, you'll need to compare and research.
Fun fact:
Some states in the U.S. are tackling legislation that will require companies to be more transparent about salaries in a broader effort to ensure fair compensation for workers. These states are California, Colorado, Maryland, Nevada, Rhode Island, and Washington.
Before starting, think about the following factors:
- Job title and description: What is the position you are applying for? What are the responsibilities and expectations for this position?
- Location: Salaries can vary greatly depending on the geographic region that the job is based in. Applicants tend to receive higher salaries if the position is located in cities like San Francisco or Seattle where the cost of living is higher than in smaller cities.
- Experience level: How much relevant experience do you have, and what can employers expect you to contribute based on your qualifications? Being more experienced can help you command higher salaries and more generous benefits.
- Company and industry: What companies are you applying to? Depending on the industry and size of the company you're applying to, you may need to adjust your expectations.
Note: There are many more factors that can influence a negotiation. Certifications, education, subject matter expertise, a history of significant achievements, and other skills can be used as persuasive leverage.
Now that you have a good idea of what positions to research, you can utilize a variety of resources to determine your market value.
Salary comparison sites
Plenty of websites track compensation data across different occupations and industries. Some popular sites for comparing salaries and benefits include:
These sites allow you to refine your search by title, location, company, and much more.
Reach out to your professional network
Try joining a reputable group geared towards professionals in your field. You can find these groups on places like LinkedIn or on chat apps like Slack or Discord. You may even be able to find local professional associations specific to your industry. Asking people in the role you're applying can return valuable perspectives, which can come in handy for finetuning your expectations.
- For example, a technical writer might join the Write the Docs community to connect with other technical writers.
Government resources
Check to see if your government conducts and makes any national compensation surveys available.
For example, if you visit the U.S. Bureau of Labor Statistics, you can look up comprehensive measures of compensation cost trends, benefits coverage, and wages. Visitors can even narrow down wage data by occupation on a national, regional, state, and metropolitan level. You can even check for earnings data based on demographic characteristics that are typically unavailable on typical salary comparison sites.
3. Identify non-negotiables
Identifying non-negotiables depends on your circumstances and knowing what's essential for you to thrive at work. Start thinking about what a job offer must include for you to accept it.
Must-haves
Do you want to work remotely or have flexible time off? People want to feel secure in their jobs, and sometimes the absence of a benefit can be a significant deal-breaker.
Here are some things to consider:
- Health benefits: Is the employer offering high-quality health coverage?
- Retirement: Are you actively saving for retirement or still figuring things out? Is it essential that your workplace offers a 401(k)?
- Paid time off (PTO): If work-life balance is important to you, you may want to negotiate for flexible time off (FTO) or more vacation time.
- Flexible work options: Some people love being in the office, and others can't imagine commuting every day to work. Flexible work options can make a massive difference in the quality of life for people who care for someone at home or need accommodations for disabilities.
- Paid parental leave: If you're planning on starting a family, then having good parental leave benefits may be high on your list of priorities. If you have no intention of having kids anytime soon, then you might not care as much if parental leave
Determining your salary band
If possible, try not to bring up a salary number or range until later in the interview process. If a recruiter is pressing you during the phone screen or an interview for an expected salary number or range, you can try to flip the question by responding, "Could you share the salary range for this role?"
Alternatively, you could also give a number or range that is on the higher end of the market rate for that role, giving you room to comfortably make concessions during the interview process.
Recruiter: "What kind of salary range are you looking for?"
You: "Well, the going rate for software engineers with my experience is around $130k to $140k so I'm hoping for something within that range. However, I'm definitely open to negotiating based on the entire compensation package."
To quickly determine your salary band, take a look at the pay scales for the position you're applying for and base your answer off of what you find.
- The lower limit of your salary band
- Keep the lower limit of your salary band at least 10% above your current salary
- The Council for Community and Economic Research provides a useful calculator for comparing the cost of living index between cities: Cost of Living Index Calculator
- The upper limit of your salary band
- There's no rule on what your upper limit should be, but try not to make the range unreasonably large (e.g., stating your range as $48,000 to $500,000 instead of $48,000 to $58,000)
Finally, make sure that you know when to walk away from an offer. If it does not make financial sense to accept an offer, and there is no room for negotiation, it is perfectly reasonable to turn down the role.
Note: Negotiating your salary should be based on what you're bringing to the table, and never on what your current or previous salary was. If your past salary doesn't line up with the salary you currently deserve, do not disclose it.
4. Consider the entire compensation package
Now that you have some time, you can evaluate it through a more holistic lens. Most people typically focus on negotiating the base salary, and miss out on opportunities to indirectly increase the overall value of their total compensation.
For example, two employees in the same role may have identical base salaries of $80k. If Employee A was able to negotiate a larger signing bonus and equity compensation, then Employee B would be getting less value out of their total compensation.
Your base salary only accounts for one portion of your total compensation.
Here's an example of what you might consider when evaluating the total compensation package being offered:
- Base salary: The amount of money you earn before any deductions or additional compensation are applied. Base salary typically makes up 50% to 70% of your total compensation.
- Sign-on bonus: A one-time payment offered to a prospective employee as an incentive to join the company.
- Health benefits: In addition to medical, dental, and vision care, there are a variety of options for health plans to consider when evaluating your compensation package. A Health Savings Plan (HSA) and Flexible Spending Account (FSA) can be used to set aside pre-tax dollars to pay for various health expenses.
- Retirement plans: Some companies offer 401(k) matching for every pre-tax or Roth dollar saved.
- Annual bonus: A yearly lump-sum payment given as a reward to supplement the base salary. An annual bonus is usually based on your performance, although it can sometimes be based on how well the company does throughout the year.
- Equity compensation: A non-monetary grant of stock, stock options, etc. that represents ownership of a company. Equity is an effective way to motivate employee retention as it vests over time (usually 4 years).
-
Extra perks: Some perks can differ greatly depending on the company, or may even be unique to a specific company! Here are some examples of extra perks that can add real value to your compensation package.
- Daily catered lunches
- Fitness reimbursement for gym memberships or classes
- Reimbursement for professional development
- Tuition reimbursement for college coursework
- Employee discounts
- Commuter benefits
Recruiters are often flexible when it comes to negotiating non-monetary or near-monetary forms of compensation. These can be good places to target for improving the overall value of your package.
5. Prepare and justify your counter offer
Once you've received an offer and done your research, it's time to identify the terms you want to negotiate and your reasons for negotiating them.
At this point, it's good to remind yourself that the person you're negotiating with is eager to have you on board and is happy to collaborate with you to make things work. You should make sure that you have a solid justification for every item that you plan on negotiating.
Use objective metrics
When talking to your hiring manager or recruiter, provide specific, objective metrics that illustrate pragmatic reasons for considering your counteroffer.
When you've researched how others are being paid based on objective metrics like education or experience, you can compare these metrics to your own to determine your market value.
Your market value should take into account:
- Academic background
- Years of experience
- Professional qualifications
- Proven achievements
- Specialized knowledge or skills
It is easier to persuade someone that you deserve higher compensation if you're framing your counter offer from the perspective of others with your education, experience, and skills.
Prepare scripts
Preparing scripts can be extremely helpful for staying calm and collected during the interview. Writing out scripts can also help you finetune answers to be more persuasive or align more closely with what the company is prioritizing. As you get further along in the interview process, start preparing scripts for when you receive a phone call with the offer and for negotiating various terms of the compensation package.
For example, if you wanted to open up the conversation to the prospect of negotiation, you could try a script similar to the one below:
You: "Hi [Recruiter]! Thanks for taking the time to jump on a call to hammer out some details about the position with me today. I really appreciate how helpful you've been throughout this entire process. I was hoping to get clarification on some of the operational aspects of the role, touch base on the compensation package, and learn more about a recent initiative that [Interviewer] brought up during our last conversation."
Here are some other great questions to ask when negotiating a job offer:
- "Can you provide more details about the benefits and when they start?"
- "How are raises determined?"
- "Could you forward a written copy of the offer when you have the chance?"
- "When would you like an answer?"
Practice negotiating
Practice negotiating with a friend or family member. Even if you're practicing with yourself in front of a mirror, going through the conversation out loud can help you deliver your responses more eloquently later.
Here are some examples of questions and dialogue that you can practice answering alone or with someone else:
- "What is your expected salary range?"
- "Why do you deserve higher pay?"
- "There's no flexibility for negotiating compensation at this time."
Be empathetic, honest, and respectful
Successful negotiations come from a place of honesty, trust, and respect. Understand that your hiring manager or recruiter may have constraints that they just can't budge on, and don't assume that they're trying to cheat you out of a fair wage. From the perspective of the hiring manager or recruiter, their job is to make sure that your compensation is commensurate with the work you'll be doing.
Be upfront and timely with any changes that might affect your decision as well. If you've received a job offer from another company, then it's okay to let them know what you've been offered to give them an opportunity to adjust their own offer.
Finally, you should never:
- Fabricate or embellish a competing offer for the sake of using it to leverage a higher salary
- Negotiate in bad faith
- Be confrontational with the person you're negotiating with
- Show that you're offended or insulted by an offer
Wrapping up and next steps
Preparing for an interview can be overwhelming, and negotiations can be especially tricky because they rely on so many different factors. Negotiations can be even more challenging and stressful for women in the tech industry because they have to overcome gender bias and other obstacles in the workplace.
We believe that diverse perspectives are key drivers of growth and innovation. As a result, making careers in tech more accessible and equitable has always been a priority at Educative. The Educative team has been working hard on developing new content to support women and underrepresented minorities interested in breaking into the tech industry.
To hear more about the experiences of women who have established careers in the tech industry, check out the Women in Tech series on our podcast, Educative Sessions.
To get started learning these concepts and more, check out Educative's Grokking Comp Negotiation in Tech.
Happy learning!
Oldest comments (2)
Hi Nate! Thank you for taking the time to put your response together. I wanted to respect your perspective, so I read through the sources you provided, but ultimately decided that the evidence provided was poorly substantiated.
While the investigation with Google makes for an interesting case study, I would never generalize their findings to women across the workforce because, in order to do so, the sample population (women at Google) would need to accurately model the population you are generalizing out towards (women in the U.S. workforce). So, individually, this was an interesting source that I enjoyed reading, but statistically irrelevant to our conversation.
Your other two sources, an article on FEE Stories and The Suffolk Journal had some issues as well. The FEE article cited stated that there are occupations that have a disproportionately high concentration of one gender as opposed to the other (94% of child daycare service workers were female, and 2.9% of workers in logging were women). While this is totally true, in order for this comparison to substantiate the author's claim in a statistically valid way, they would need to perform a multivariate statistical analysis that takes into account the covariates being introduced.
For The Suffolk Journal, they used an article by the National Review to support the claim that, “When the choice or major, hours worked, and career choices are taken into account, the wage gap shrinks to 6.6 percent.” This article provides no source to any peer-reviewed research that supports this claim. They did provide a link to a book titled "Why Men Earn More" by Dr. Warren Farrell, but that just redirects to an article about Amazon's taxes. Unfortunately, I cannot accept this as a valid source of statistical data.
My last points of contention are unrelated to statistical discrepancies I found, but are closely related to journalistic integrity. The author of the FEE Stories article is an economist at the Center of the American Experiment, a politically conservative think tank, and the author of The Suffolk Journal article was a student journalist quoting an editorial political magazine.
These are not inherently negative qualities, but political bias is something to be aware of when researching evidence to back up your claims.
I would like to direct you to this report released by the U.S. Bureau of Labor Statistics that covers women's earnings in 2020 (data), which, I hope will meet your standards as a reliable and accurate source of information.
On page 4, you'll see that the median weekly earnings of women who are full-time wage and salary workers are consistently much lower than for men.
On page 7, you'll see that even in fields where women are hired in a much higher proportion than men, those women, working full-time, still earned significantly less than men in that same occupation.
On page 8, you'll see that a majority of both male and female full-time workers had a 40-hour workweek (73% and 76% respectively). Among those workers, women earned 87% as much as men (percentages were calculated to exclude people who usually work 35 or more hours per week, with variable hours). I agree with you that women often do the majority of unpaid child-rearing, and I'd like you to take that into consideration here.
Now, this percentage differs from the one cited in my article (82%), because that percentage applies specifically to white women. So, I've updated the article to correct that typo. Thank you!
Since you're going over points I already addressed, I'll keep my response brief. The U.S. Bureau of Labor Statistics is literally the institution making these claims. A link to their most recent data is available in my comment above. Hope you find it helpful!