a guide on negotiating (salary)
Why are we talking about negotiation?
Negotiating is a skill set that helps you earn more and save money.
Salary negotiation is the most common. I’ll tell you right now that earning a high income fixes a lot of money problems (but not all problems 😉). Debt becomes easier to pay off, you have more to spend, and you have more to save and invest. It’s pretty simple. When you earn less than you spend, you get into debt. If you earn more but spend at a slower rate, well, you’re just sitting on a bunch of capital you can do shit with.
If you have a job or if you own your own business, negotiation helps you increase your salary to match what you’re worth, and also get better rates on the services you use. Much of life is negotiable. Much of life is also about good relationships. I saw that with my own eyes when my own mother would barter with every seller in the Neihu Taiwanese markets. If she could save a few dollars on some green onions, she’d do it. She’d make friends along the way, and soon enough, she had under-the-table deals with half of the major vendors in the market. 🥬
Negotiation is often misunderstood as a zero sum game where one party must lose for the other to win. The truth is far more nuanced. At its core, negotiation is a collaborative relationship aimed at finding mutual benefit and understanding. I’ve had to negotiate for jobs, for equity, for stuff in my relationship, and even for my wireless bill.
The Golden Rule
Always negotiate. When you do it well, you never damage a relationship by negotiating. If anything, the counterparty will see that you:
know your self-worth, and aren’t afraid to ask for more
are open to communication
seek mutual understanding and benefit
Homework
Think of a negotiation as just having a conversation with someone where both parties are figuring out how to get what they want, while nurturing a relationship. There are times when negotiations turn into a win-lose situation. I generally avoid those because it damages relationships. For the win-win ones, it boils down to these simple questions:
What exactly are you negotiating for and what is the timeline?
What does a “win” look like for both parties?
What does backing out or alternatives look like for both parties?
Live Negotiation
Prior to negotiating, I know I will negotiate. Remember the golden rule? For job offers, you’re negotiating the parameters of the job, the salary, and also the timeline. I also will have done research around the company and some salary ranges. I don’t think this needs to be said. If you’re applying somewhere, it’s best to know what it is they’re actually doing. Information is power.
A win for a job offer can be any combination of items:
desired money: certain level of salary, equity, sign-on bonuses, end of year bonuses, and/or commission structure, compared to market numbers
desired position: faster performance review cycles for advancement, increased scope of duties, specific projects
desired lifestyle: shorter commute, remote work, flexible schedule, relocation expenses, paid equipment, educational stipend, childcare stipend, dog-care stipend
desired time: more time off, later start date, seasonal-work, contract-work
desired relationship: bi-monthly meeting with CEO, professional coaching
desired something else: money can be an uncreative ask - get creative. Remember, everything is … negotiable.
The reasons for backing out of a job offer can be any combination of items, but know the thing that makes you say “fuck that, I’m out”, no questions asked. Where you say “screw this” has a lot to do with what other options you have, also called the “best alternative to negotiated agreement”, the BATNA. In simple terms, the more alternatives you have, the easier it is to back out, and the more firm you can make your own demands.
Maybe you have 15 job offers. Maybe you have $100k in liquid cash that you can use on a job search. Maybe you have little to no fixed costs to deal with. That makes unreasonable job parameters really easy to say “nah, pass,” but you’d probably take anything if you were on the verge of homelessness. Backing out is easier when you have more alternatives, harder when you have less. This is all deeply personal, so it pays to know EXACTLY what you want and don’t want.
maybe they want you in office 3 days a week, but 4+ is a nope.
maybe they can give you $105k in pay, but <$100k is a nope.
maybe 3 weeks of vacation is good, but < 2 weeks is a nope.
it can get complex, so can boil down to intuition. Maybe they want you in office 5 days a week, but they provide child and dog care, and will give you an extra quarterly bonus. You have to weigh the options on why the 4+ was a nope in the first place. Maybe it was child care and dog care and now it’s ok. Maybe it’s because you want to spend more time with your child and it’s still a nope. You might have to weigh your options. This may mean making a list, but I usually find that my values and my intuition make these choices for me.
It’s also important to put yourself in the company’s shoes and ask yourself, what’s a win for them and what might be a “back out” situation? Of course, you might not have all the information, which is fine. It’s still good to think about because negotiation is helping all parties achieve their goals.
a win is having you come onboard at a fair price and equity for both parties (if you’re asking 3x the market price, either you’re in the top 0.001% or good luck)
a win is having your personality come to enhance the culture (be you, don’t be fake)
a win is having the company be able to cover product gaps with good talent
a win is having someone who already understands the job and a bonus, is already doing it (more on this later)
backing out entails unreasonable requests for money, time, equity, and having similar talent at a potentially better price point
backing out is an egregious culture clash because the person is an asshole, and picking someone else who is a better fit (don’t be an asshole)
Write down this information. The more specific you can get, the better.
Let’s run through an example of a live job offer negotiation. I’ll point out exactly what I’m thinking as it pertains to the questions above. I find real examples instill the concepts better.
Recruiter: Let’s talk compensation, what is your ideal salary for this position?
You: I don’t have any particular numbers in mind. I’m more interested in learning whether or not this will be a good mutual fit. If it is, I’m open to exploring any offer as long as it’s competitive.
Recruiter: Yes, us too, but what would your ideal salary be?
You: I’m not particularly comfortable discussing exact numbers at this point unless we get an idea of my fit at the company and the composition of the offer. But I do hear you, and I agree it’s important that we’re on the same page. Once we get an idea of all the other information, then I think it’s a good time to figure out a compensation package that makes sense.
I’ve had numerous conversations with recruiters that try to lock you into a number even before interviews have begun. Information is power. If you give them a hard number, you’re giving them the power to make decisions for you.
Recruiter: Yes, but we can’t continue until we get a number.
You: Well, okay. I know that a 90th percentile [position] in the Bay Area makes roughly 85k to 100k base in salary at a company of this size. I will make a note that I’m very interested in the success of [company], have already started making idea contributions, and I'm definitely looking for a step up in my next role.
Personally, I hate this kind of stuff, but it will happen. They keep pushing. At this point, it’s already a ding to me if the company recruiter does this. Take note of this. Is the rest of the company this pushy? Because if yes, it will affect my final decision. My answer does a couple of things:
it’s fact. Without actually give a hard number, I’m fulfilling their request backed up with data. It leaves the door open for more conversation around a range.
it’s a salary range of top performers at a similarly sized company. I’m signaling that I’m going to be in that top percentile, and I don’t fucking mess around.
I preserve the relationship and express continued interest and confidence. If I deny the request again, I’ll start to look like the asshole. Remember, mutual relationships. If anything, they kinda start to look a little bad.
this is why coming prepared with research is a good thing.
At this point, you go through the interview, fucking smash it, and you’re at the offer stage.
Manager: We’re excited to bring you on to be a senior [position] at [company]. Here’s some of the details of the offer. What do you think?
You: I’d like to start off by thanking you and the team for making this process as smooth as it has been. I really think this position is a great fit, and I’m glad that you guys agree. That being said, it’d be great if I could have some time to look over some of these details. Are there flexibility in the terms?
What we’re doing is creating artificial delay. Sure, if you’re ready to negotiate live and know exactly what you want, you can do it here. However, I always encourage creating artificial delay because the job offer details can be reviewed with a fresh mind later, and then there’s the added benefit of moving things to writing, which helps create a paper trail. Before you leave, try to save yourself an email by asking if there are flexibility in the terms - that means they’re “open to negotiation”. It’s good habit to ask before you assume.
Do not under any circumstances say something like "can I have “$X instead?” Even though they might be willing to give it, you’ve kinda showed your hand on multiple fronts. You showed what price would make you happy, and they’re not obliged to fulfill that. They also know now that you’re focused on the money, and less about other things. You also just gave them the final decision power.
In your email back to them:
if you’re excited about them, let em’ know
reiterate the terms
negotiate the terms and state your reason. This makes your request feel more human. Also, it answers “why?”. This can range from proving you’re a valuable asset, showcasing your ability to fulfill niche value for their business, or highlighting characteristics of what they value.
be motivated by more than just money
You: Thanks again for getting this offer to me so quickly. I really think this position is a great fit, and there are a couple of dimensions where if this offer were improved, it would be much more compelling.
Your stated salary of 95k a year is within the range that I provided the recruiter, but feel given my success at my previous company, 110k makes a bit more sense. I think you already know that I was able to double my previous company’s community following and increase revenues from 2MM to 5MM in just two quarters. I’ve already begun to work with [Rob] in our interview on implementing some similar strategies, and he’s been optimistic on some of the numbers he’s seen in the last week.
Based on the equity information, I’m pretty motivated by the mission and vision of this company and intend on staying long-term. That being said, because I am within the first fifty employees, I think bumping my equity from 0.3% to 0.5% sounds in line with what other similar startups have done.
Also, I’d like to see if accelerated performance reviews and weekly mentorship calls are available. I like moving quickly, but I still think there are some gaps in my [skill set] that I think [manager] could help me shore up.
As always, I’ve enjoyed working with every member of the team. This is a fantastic and exciting opportunity, and I am confident I can execute on the strategy, so I hope we can come to a mutual agreement on some of these benefits.
Manager: I think we can swing 110k, especially since we have received great feedback from [Rob]. Unfortunately, 0.3% was carefully considered and is already on par with the market rate.
We can also fulfill your request for accelerated performance reviews and weekly mentorship calls with our VP - consider it done. We can outline more structured conversations during your first week.
We also would love to have you on [special project] since it overlaps with your skill set and helps you grow in the way that you wanted.
You: Everything sounds great here! Again, I’m really looking forward to working with the team. I will have to push back one more time on the equity. My experience lines up really well with the long term vision of this company, and I imagine the best work to be done in 2-3 years as outlined in my strategic plan. If we can agree on 0.4%, I will sign today by the end of the day!
Manager: Alright, we can do 0.4%, looking forward to your signature. We’ll send over the DocuSign for your perusal as soon as possible.
Again, you’re not being greedy. You’re just stating the impact you can generate (and in some cases have already started generating), which makes you an above and beyond hire. You’re speaking to what they value, and the more you can show that, the less of a risk you’ll be. When I negotiate, the salary increases are good, but I’m always looking to improve my relationships. There’s always something structured I ask for in terms of mentorship or opportunities for conversations.
Take note of the tone as well. Everything is positive. I’m not making threats. I’m just asking “I’d like this, and this is why, what do you think?” It’s not a yes or no question. They have to look at the argument you’re presenting and also give you a reason for accepting or rejecting. You’re letting them know the reasons for your ask and that you’re winnable and are motivated beyond the money.
Lastly, one of the strongest things you can do is already have done some of the job. In the example above, it sounded like you helped a soon-to-be teammate (Rob) fix up some of their strategy and it’s already been performing in the last week. Obviously, it’s not always possible to do something like this, but in the cases where you can demonstrate deep knowledge and understanding of a company’s trajectory without being overly presumptive (yes, even in an interview), I have found it to be a winning effort.
recap
🌎 Remember, you’re just two humans working towards a common outcome. Do your best to make it a win-win situation. Don’t sour the relationship. Have some goddamn empathy. We’re just a bunch of specks on a big blue marble, finding equitable ways to work together.
✏️ Write everything down, and move things to writing if you can.
📚 Do your homework. Please, please, please know the mission and vision of the company, and the essence of what they’re doing. You have no idea how embarrassing it is to get into an interview and get that wrong. It’s almost an instant fail when you have no clue what’s going on. When you’re being interviewed, understand that this is your opportunity to figure out their motivations and constraints.
📈 Do some market research on your role, median salaries across the U.S/Europe, across your specific region, and your city. Have some ranges ready, and a general idea of where you fit in a percentile ranking.
❓Answer these questions. Don’t be afraid to get ideas from the examples above.
What exactly are you negotiating for and what is the timeline?
What does a “win” look like for both parties?
What does backing out or alternatives look like for both parties?
♨️ Don’t be pressured to reveal any of your cards. It’s fine for a recruiter to really push for a number, but like the example above, have a range ready so you can punt being the asshole. This is the part where you might have to ride the line on standing firm or conceding a little bit. Remember, relationships first.
🎉 Knowing when to concede a little and being winnable is an art. If 80%+ of your terms have been met, perhaps you can ask for one last thing and promise you’ll sign right away, if it’s met.
🤖 Have reasons for your asks. Nothing comes off as more entitled than “I want this instead, thanks.” Come with “I want this because I’ve had a history of [demonstrated results].” It backs your request up with objective data, and you sound like a reasonable human, not an asshole.
💼 One of your strongest alternatives isn’t necessarily another job, but the ability to show that you’re already doing the job - a strategy document, a month of working with the team on a contractual basis, a couple of ideas you’ve helped other folks at the company with. Not all positions can offer this kind of opportunity, but where you can swing it and start doing the work of the job, it’s an amazing foot in.
Of course, there are always going to be exception cases in the world of negotiation, so you’ll need to be adaptive. That doesn’t mean to come unprepared. I’ll probably do another series with other non-salary negotiation examples, because those can be fun.
These things take practice though! Writing will help slow things down, but verbalizing these conversations with a friend can help normalize the awkwardness. Hopefully, this guide helps with your preparation, so we maximize your chances of success. 🤩