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The Basics of Salary Negotiation

recursivefaults profile image Ryan Latta ・4 min read

One of the golden rules of negotiation is whoever speaks first loses. What are the other rules that exist that, if you use them well, will lead to at least a ten percent increase in your salary?

There are a few, but before jumping into those, can you regularly negotiate ten percent more? Yes, you can and should negotiate for at least ten percent more every time you negotiate. I’d also argue you should get ten percent more when you change jobs. So that’s twenty percent for those you math folk.

So now let us break down the rules I follow in negotiating salary:

  1. Don’t say a number
  2. Be ready to walk away
  3. Have stories
  4. Don’t do it on the spot

Don’t Say a Number

So the golden rule is tough to apply throughout an interview process. Interviewers and recruiters will ask for salary histories or target compensation. Some states they may not be allowed to do this, but that doesn’t mean they’ll follow the rules. So, how do you push them to say a number? Here’s how I do it:

“I’m more interested in finding out if we’re a good fit for one another. If we are, I promise we’ll find a number that we both like.”

It takes practice to say it confidently, but it works.

You may say that in your application forms, they are asking for it. Leave it blank, or as one person I worked with loved to do, put, “1 mil (negotiable).”

There are lots of reasons not to say a number beyond the negotiation position, but that is for other articles to explore.

Be Ready to Walk Away

Being ready to walk away is a state of mind that I want to have in my interview. Yes, I want a job, but also I’m valuable, and any company is lucky to have me. If this company isn’t the one, then another will be.

When preparing to interview, I recommend that you set a number in your head that if you get even one dollar less than it that you will walk. Placing a floor for your compensation is essential to guard your career and make sure you can find some level of fulfillment. Nothing eats away at a perfectly good job than believing you’re underpaid the whole time.

Setting that floor and realizing you have a lot to offer help to put you in the frame of mind that if this job doesn’t look like it isn’t going to benefit you in the ways you want, that you can find something else.

Lastly, negotiating adds some amount of risk to the process. It hasn’t backfired on me or my mentees yet, but I believe there is a non-zero chance the company walks away from the table.

Have Stories

It isn’t always the case that when you ask for ten percent more than they ask you to justify it, but you should have a file ready of great things you’ve done. So when you do ask for a higher compensation than the offer you can make the case very clearly that you’re worth even more than they expected.

Having stories at hand is also a key ingredient in seeking a raise or promotion. Be your advocate, and show the great things you’ve done.

Often though, there is little fuss about this, but it’s a far better sell to have a few killer stories right then to emphasize why you’re worth that bump.

Don’t Do it On the Spot

Last up is to not negotiate on the spot. I recommend receiving the offer and immediately firing back with an acknowledgment and saying that you’ll need to look it over. I may also ask for more information on the other benefits as well.

I may already have determined that I’ll negotiate, because I always do, but I want to see everything and gather myself for the conversation.

I will call back within a day and then prepare my ask. This time allows me to settle my nerves, prepare to walk away from it, and look at how satisfied I’ll be with this job at this compensation.

Negotiating right then when you receive the offer feels impulsive to me, and I think it appears as though the offer wasn’t considered. I haven’t tried this way to confirm that it has an impact.

So in 2020, for all of you thinking about a new job or how you can get compensated better, look at how these few rules can help get you paid at least ten percent better. For those of you interested, I’m starting a newsletter on my site that will have career and job advice. Sign up and join the fun!

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Discussion

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abhi747 profile image
Abhinandan Khilari

What to do when they ask our current salary say that they can provide max X percent hike on that and also say that this information is necessary to proceed the application for the interview so we cannot skip this.

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citizen428 profile image
Michael Kohl

Turn around, look for another company. They DO have a salary range in mind and that's definitely not a function of your last salary. Or if that's a bit extreme for your taste, just tell them what you're looking for without disclosing your current salary.

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natriumdev profile image
NatriumDev

My recent experience with this question taught me this:

  • Your current salary is irrelevant for a new job. It's about what your new employer is willing to pay for you, not what your current employer is paying you now.
  • I like to bounce the question back. "what do you think I'm worth?"
  • But if they really like to now a number, give a range instead of your actual salary. Example: "At the moment, I make between €x and €x+500 gross a month." This way, you still have room for negotiation.
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abhi747 profile image
Abhinandan Khilari

I completely agree with you regarding current salary being irrelevant to the future salary. The current salary is as per the skills analysis by the current company and the new company cannot carry forward that.

But the real challenge is convincing this to recruiters and HRs especially in India from where I am who have corrupted mindsets following this strategies for salary discussion even before the interview. Also, almost all the candidates reveal their salary details and accept the percentage hike as given by the recruiter. So if any one candidate who does not follow this will be odd man out and will be rejected in the application stage itself even before the interview.

Irony is that they ask candidates both current and expected salary without specifying the salary range or other compensations details or perks for the position. When asked about the salary range, they say they provide 30-40% hike on the current salary. So, I once asked recruiter then what's the point of asking the expected salary when that is fixed by the specified percentage without the interview. He replied this is to check the expectation is not beyond their percentage hike.

Your suggestion of giving range for current salary sounds cool and will try it.

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ikirker profile image
Ian Kirker

Surely, in that sort of situation, the best approach is to give yourself a pay rise: when asked, increase your salary by some believable percentage.

If someone happens to know your actual salary and calls you on it, you could say that you were including the value of the various extra benefits provided by the organisation.

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mailee profile image
Mai Lee

I like bouncing the question back - it sounds like the best way to handle this. I found some of the suggestions in this guide helpful also, especially pushing back salary conversation until the very end. Last time I negotiated, didn't do that and I'm sure it cost be tens of thousands. Here if anyone else is negotiating: candor.co/guides/salary-negotiation

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okrohan profile image
Rohan Salunke

I'll follow what the blog says, calculate the hike they are ready to give. Have a number in mind that you expect. If the offer doesn't exceeds, you probably wanna pass this company

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meglio profile image
Anton A.

At one of my previous jobs, I negotiated a +$10k/year increase at the very beginning, before signing the contract – and it worked the "no questions asked" way throughout the following 5 years I spent in the company.

Which sounds contrary to the "Don’t Say a Number" advice. But every case is unique.

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recursivefaults profile image
Ryan Latta Author

You bring up a good point. The part about not saying a number has multiple parts. You can absolutely negotiate at any point and be the first to say a number. The reason I advise against it has to do with the number you start from.

Too many devs think of their current salary and then negotiate from there. Companies have a salary range that is often invisible. So when a dev starts with a number they often put themselves too low in the salary band. If they go too low outside the run the risk of looking incompetent, if they go too high they are unaffordable.

When the company gives the number, on the other hand, they will pick one based on their internal range, their internal urgency, and how willing they are to continue looking. This generally leads to them picking a higher number than most devs will, and then you can negotiate up another 10%.

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meglio profile image
Anton A.

In the same time... I have cases with companies saying e.g. 90k and then being able to raise up to 135k throughout the negotiation process. Which also indicates for me that a company can start way lower than they are prepared to pay.

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topitguy profile image
Pankaj Sharma

Thats a lot of money, good job buddy!

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shivenigma profile image
Vignesh M

Very good article Ryan, we almost wrote the same thing with different context. Being ready to walk away is the super power.

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iamnotstatic profile image
Abdulfatai Suleiman

What if it's your first time???

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recursivefaults profile image
Ryan Latta Author

Great question.

When I mentor devs who are after their first job, I advise not negotiating. Here's Why:

It's hard to get that first job.

There are so many things to get right that adding the stress of negotiating, which is very intense, is too much to ask. The stress of getting through the tech interviews and all of that is crazy. I recommend focusing on getting through the interview as the priority. Negotiate when you can handle the extra stress.

Now, we all have different appetites for these things, so if you want to negotiate for the first job do it. Remember, be willing to walk away. If you can be in that space mentally you are in the right frame of mind to have that discussion.