So you’ve landed a job offer. First of all, congratulations! Prospecting for jobs, prepping for interviews, and balancing confidence with humility in the interview is an achievement in itself.
But don’t let your foot off the gas yet. Not if you want to make sure you get the highest ROI on your interview prep at least.
If you're looking this up 2 minutes before your offer call, here’s the TL;DR for the first step:
Don’t feel obligated to accept your offer right away!
Remember negotiation is a dialogue, and nothing needs to be decided on the first call.
Come back after your call, and read through the rest of the guide before following up!
If you are here to prepare, you're in the right place. This article is broken into 3 parts:
- Understanding Tech Compensation
- Setting Expectations Throughout the Recruiting Process
- The Art of Negotiation
Understanding Tech Compensation
Levels.fyi Interactive Offer showing a total compensation breakdown for a sample offer, including base salary, equity, and bonuses.
Total Compensation Breakdown
Before you can successfully negotiate a top offer, you’ll need to understand the compensation structures at top tech companies and startups alike. If you’re familiar with our site, then you’ll likely be familiar with these numbers. Here’s a quick rundown:
- Base Salary: The cash you are paid every pay period. Pretty straight forward. This is also, usually, the easiest piece of information to research and use to your advantage.
- Annual Bonus: Your annual bonus is cash paid once per year based on targets established by the company. Some companies pay bonuses based on individual contribution, some pay based on company revenue and overall company performance, and some pay baed on both. Note: Bonus percentages are usually non-negotiable and standard per level.
- Equity: Equity grants you partial ownership in the firm and fluctuates based on the company valuation. When it comes to compensation, this is where things get a little complicated. Generally, the more senior you are, the larger equity-based compensation you’re opened up to. More on this below.
- Other Bonuses: Signing bonuses and relocation bonuses are two more types of bonuses that are fairly common depending on the company and role you’re interviewing for.
- Signing bonuses are one-time cash payments offered to new hires as an incentive to join the company, often ranging from $1,000 to $100,000 depending on seniority and role.
- Relocation bonuses are one-time payments designed to help employees cover the costs of moving to a new location for work, including expenses like moving services, temporary housing, and travel.
Equity at Public vs Private Companies
Public Companies
At public companies, equity is usually awarded in shares of stock, RSUs or stock options. Ownership of these shares ties your paycheck to the success of the company. If the company does well, and the stock appreciates, you can sell your shares and ultimately make a profit. Similarly, if the company has a bad year and the value of the stock goes down, the value of your total compensation could diminish.
Private Companies
At private companies, equity offers less certainty. The value of shares is only realized once the company goes public, the firm is acquired or merged, or a similar liquidity event happens and you are able to sell your shares.
Private shares are often likened to lottery tickets in that they are high risk, high reward. If the company is successful, your shares could result in a sizable windfall. Conversely, in the event of the company’s failure, they could also amount to nothing. Private companies, occasionally, offer secondary markets for shareholders to sell their stake, but it typically comes with restrictions.
💡 If you’re weighing offers from both startups and FAANG companies, it’s important to understand the nuances of equity and how the companies compare. While large startup equity offers are often quite competitive (e.g. Stripe), from our coaches’ experience, we know that FAANG companies typically de-value startup equity, so it’s important to be able frame the data in a way that makes it comparable.
Startups’ funding stage, valuation and size determine how equity value compares to larger public firms. If a small or medium sized startup offers you $100,000 in equity, a company like Meta will likely discount that value (sometimes by 75%) as there is no guarantee the startup will be successful, IPO, and you will be able to collect the cash. Whereas, you will certainly be able to sell your Meta shares, ultimately making them less risky and potentially more valuable.
Benefits and Noncash Perks
A screenshot of Google’s benefits page from Levels.fyi, including an estimated total value figure. Google’s benefits include Health Insurance, Life Insurance, 18 weeks of Paternity Leave, and even on-site massages!
Benefits encompass a myriad of categories, most notably healthcare costs and paid time off. Beyond standard healthcare coverage, noncash perks are some of the more interesting aspects of company culture attributed to the tech industry and may include: free or subsidized meals while at work, flexible work hours, and even pet-friendly environments. Levels.fyi’s benefits page makes it easy to compare benefits across organizations. Simply select companies you wish to compare, read and scroll!
💡 Large companies’ benefits sometimes include services such as tuition assistance, adoption assistance, and fertility services. Some of these benefits (such as spousal support in case of death, e.g. Google, can add up to hundreds of thousands of dollars.)
Factors which dictate your offer limit
Leveling
In tech, levels are designations which define and characterize the scope and sphere of influence of a role and the individual who fills it. Levels help companies standardize work expectations and employee impact.
💡 It’s important to note that there is not a standardized leveling system across tech companies. Meaning a Level 5 Software Engineer at Google does not necessarily have the same level of responsibility and influence as a E5 at Facebook. This is exactly why Levels.fyi exists in the first place! Use our standard leveling tool to compare levels across numerous tech companies.
Location
Where you live has a strong impact on how much you can be paid. Higher Cost-of-Living (COL) locations will yield higher compensation packages and vice versa. Our SWE Salary Heatmap tool does a great job of visualizing how location affects pay. Plus, the COL toggle on the tool allows you to visualize which offer might yield the largest take-home pay after COL estimations!
Company Stage
The size and scope of a company as a whole also has a huge effect on your overall compensation. Put simply: difference companies in different industries as well as in different company stages can value the same role wildly differently,
We collaborated with Gergely Orosz to put together a deepdive into how different companies compensate different amounts based on what market they’re competing for talent in.
For example, in an engineering/product-driven company like Meta, SWE talent is valued extremely highly and is reflected by how much Meta is wiling to compensate for their engineering talent. On the other hand, a small nonprofit whose digital presence isn’t as advanced or even as necessary for their mission will likely not compensate a SWE as highly as these tech companies do.
Setting Expectations Throughout the Recruiting Process
Make sure to do your homework!
Interviewing can be a significant time commitment, so while you may want to cast a wide net, it’s also wise to know upfront what you’re looking for from your job and what different companies are looking for in their employees. When you find a match, interview there. Leverage your network, and embark on a fact finding mission.
Is a flexible work schedule important to you? Great! Now it’s time to find out which companies offer options outside of 9-5. Do you care about community projects and contributions? Wonderful! Discover which organizations encourage employees to volunteer on company time.
Market Research
Next, begin your market research. Find out what market value is for your skill set and experience in a particular region. But don’t stop there! Not all companies value a skill set equally, which will affect the compensation they offer. It’s advisable to have a rough idea of company compensation prior to negotiations whenever possible
đź’ˇ Our negotiation coaches have explained to many of our clients about how companies make a distinction between cost of living and cost of labor when they develop their compensation strategies because candidates tend to conflate the two concepts. This is an important distinction, and recruiters often reference this in negotiation.
Essentially, cost of living is subjective and varies greatly depending on the preferences and standard of living of the candidate. Whereas, cost of labor is determined by the market and what companies in a given area are willing to pay in exchange for certain skills. Both cost of living and cost of labor fluctuate, and are closely tied to supply and demand.
Write Everything Down
In the heat of the moment, you’re likely going to forget valuable information shared by the recruiter. The recruiter will be taking notes, and you should too.
In addition to writing things down for the sake of keeping track, our coaches have also worked with clients in the past who verbally agree on a number with their recruiter but later receive the wrong number in the offer letter, leaving both parties confused. Recruiters may be hesitatant to put things down in writing, but you can always send a recap email explaining what you spoke about over the phone.
Record information regarding timeline, process, compensation, and any other tidbits the recruiter is willing to share. It’s true, you will probably receive an informational email after the call highlighting the details. But if you’re lucky, the recruiter has met with the Hiring Manager and understands what the team is looking for (as subjective as it may be), and can share details not outlined in the job description. You can use this information to your advantage in your interviews.
Manage Timelines for Multiple Offer Scenarios
The first conversation with a recruiter should provide information regarding the length of the interview process, and you may be surprised to learn that you can push out interviews several weeks citing the need to “brush-up” on technical skills or a busy schedule. Attempt to align interview timelines at your top choice companies and commit to the processes. The effort may be draining, but an exhausting few weeks could result in a significant advantage when it comes time to negotiate compensation.
Preparation for Recruiter Screen
Interview responses and coding exercises are not the only aspects of the process that require preparation. Your negotiation skills will also be tested. Whether you realize it or not, the negotiation begins before your first interview, so prepare accordingly.
While recruiters are one of your resources, like you, they are also on a fact finding mission. They want to know the monetary value you place on your skillset. If they work for an established tech company, they have copious amounts of data available to them, and they already know where the market values your skill set. They also have a good idea of what the company will pay you for the position. Inevitably, they will pose the question:
What are your salary requirements?
OR
What do you expect to make from this role?
Don’t be surprised if they ask during the very first phone call. Asking about salary expectations early in the process is often misunderstood by candidates. While some may view this as a tactic to get an edge in negotiations, most in-house recruiters have different motivations.
Recruiters typically ask about compensation expectations to:
- Ensure alignment between what the company can offer and your expectations before investing time in the interview process
- Avoid disappointing both you and the hiring manager if there's a significant compensation gap discovered late in the process
- Help them understand if they need to adjust the level they're considering you for
In-house recruiters generally don't earn commission on your offer amount, so they have little incentive to intentionally lowball you. Their primary goal is to fill positions with qualified candidates who will accept the role and stay with the company.
However, revealing your expectations too early can still put you at a disadvantage. Without knowing the role's specific level, compensation structure, or your exact market value at this company, you risk anchoring too low.
When recruiters press for a number, you can provide a general range while noting, "This range is flexible though, and I'd like to keep this conversation going as I learn more through the interview process." This approach maintains your negotiating position while still giving the recruiter enough information to determine if proceeding makes sense for both parties.
Don’t Reveal Too Much
Just because the recruiter asks about your salary requirements doesn't mean you need to give a direct answer. In fact, you should try your best not to. It’s tempting to automatically respond, but you prepared for this, right? At this point in the process, it is unlikely that you have enough information to make an informed ask. Why?
- You do not know which level the company is going to determine is appropriate for your skill set.
- You likely do not know the intricacies of the compensation structure, and will need more thorough information before you can make an informed request.
- You’re a shrewd negotiator, and know a poker champion never shows their hand.
One of the biggest and most common mistakes candidates make is oversharing at all stages of the process.
Sharing salary expectations too early can box candidates in, and it can be difficult to recover later if you realize your request was not well-informed. Our negotiation coaches recommend candidates act like a sponge and absorb as much information as possible, but be hesitant to share.
Here’s how to address the salary expectation question early in the process:
Recruiter: I like to address compensation at the beginning of the process, and I want to make sure the salary range for this role meets your compensation requirements. Will you please share your salary expectations?
You: While compensation is important to me, I’m more interested in finding the right role and company culture where my skills will benefit the greater organization. Based on my research, your company compensates fairly and top of the market, so I’m sure we can come to an agreement later in the process once we’ve both decided it’s a good match.
Another approach enables you to use this opportunity to continue your research. If you’re curious about the compensation band, flip the focus from you and your demands back to the recruiter by asking for the salary range for the position.
Some states, like California and Massachusetts, legally require recruiters and HR professionals to share the salary range for all positions.
You: I’d like to learn more about the requirements of the position before I share my exact expectations. Since we’re discussing compensation, will you please share the salary range associated with this specific role?
Offer Extended
Congrats! They Want to Make You an Offer!
Some Recruiters will schedule a call to discuss your compensation requirements, some will send an email, while others will simply send an offer letter. Whatever approach they use, don’t feel obligated to accept right away! Remember negotiation is a dialogue, and nothing needs to be decided on that first call. Let’s examine a few approaches:
💡 Levels.fyi’s salary negotiation service is an excellent tool to use to prepare for these situations. Our expert negotiators will coach you on how to address any or all of the following situations. Whether you’re just getting started with interviews, or you have an offer already our team will help you maximize results.
The company wants to make an offer:
The recruiter schedules a call to discuss your compensation expectations.
- If you're a skilled negotiator, this is an excellent scenario because you will have the opportunity to ask pointed questions, collect all details and position yourself in a position of confidence.
The recruiter schedules a call to verbally extend the offer without a discussion about your compensation expectations.
- If you're a skilled negotiator, this is also a favorable scenario. You now know where the company values your contribution and can respond accordingly.
The recruiter sends an email requesting your compensation expectations.
- If the thought of a verbal negotiation sounds daunting, and you're adept at crafting well-written emails, this may be an ideal scenario. Arguably in this situation, you lose the personal touch phone communication offers, but it also eliminates verbal miscommunications and misunderstandings. E.g. $260,000 may sound like $216,000 over the phone.
The recruiter emails the offer letter without a call or discussion.
- This scenario could be concerning, because the lack of discussion may be an indicator of disconnected company culture or disorganization, but it’s not a lost cause. Request a call with the recruiter to discuss details, or send an email with all of your questions. Work to gain control of the situation.
The Art of Negotiation | The Dos and Don'ts
While every individual and situation is different, we’ll share some general tips our coaches have used to help clients in the past. If you want personalized coaching, make sure to check out our negotiation coaching service!
Do
Shoot high and be prepared to justify why your desired compensation makes sense.
Highlight what makes your candidacy unique.
Example:
Recruiter: Your desired compensation is a bit high for this role. How did you get to this number?
You: I know the market rate is approximately $X for this type of role in New York. However, I have also worked as a consultant for this firm, so I understand the culture and protocol resulting in little to no ramp up time. I’ll be able to make an immediate impact and support the team.
Develop multiple strategies to get to your total compensation requirement.
Different combinations of salary - equity - bonus
Example: If your desired compensation is $250,000, consider:
Option 1*. Salary: $170,000\
Bonus: 15%
Equity (YR1): $55,000
Option 2*. Salary: $150,000\
Bonus: 20%
Equity (YR1): $60,000
Option 3*. Salary: $145,000\
Bonus: 15%
Equity (YR1): $69,000
Sign-on Bonus: $15,000
Ask the right questions.
Find out the level, salary band, vesting schedule and any other important information required to make an informed and well-education decision.
Example:
Recruiter: We’d like to make you an offer, congratulations!
You: That’s excellent news! I do have a few questions. Do you have a few minutes to clarify a few things for me?
Put everything in writing, and get everything in writing.
You may need to refer to it later.
Be polite, yet firm.
The worst they can say is no! They could also AGREE. You may be surprised you often get what you ask for.
Example:
Recruiter: The maximum base salary we can offer is $X for this role, which is more than fair for the location.
You: I’m very excited about this opportunity, and want to make this work. Although the base seems a little low, how can we get to $Y total compensation?
Don’t
Reveal too much.
Withholding information doesn’t make you look shady.
Example:
Recruiter (1st phone interview): What are you looking for in terms of compensation to make a move from your current role?
You: I’m currently making $150,000, so at least $165,000 to consider leaving my current role.
Refer to the Don’t Reveal Too Much section for appropriate word tracks.
Let fear of rejection limit your request.
It’s not really a rejection at this point anyway, the company wants to make you an offer!
Be the only decision maker (in theory)
ALWAYS tell the recruiter you need to discuss offer details with your (insert title).
Looping another decision maker into the discussion buys you time and allows you to digest the information. You rarely need to give an answer right away. It’s also nice to let someone (whether real or figurative) else be the bad guy.
Example: Recruiter: Well, what do you think of the offer? Do you accept?
You: Thank you for the detailed overview. This is a great start! I’d like to discuss the offer details with my family. May I get back to you early next week?
Use personal expenses as supporting evidence for your compensation requirements.
Not all candidates’ personal expenses are similar, and it’s unrealistic to think your personal situation (instead of skill set) will sway a company to pay you more.
Example:
Recruiter: What are your compensation expectations at this time?
You: I looked at a few apartments and daycare facilities in San Francisco and worked out my budget. I will need at least $X to take this position in the Bay area.
See Market Research section to understand how companies determine market pay rates.
Seem too eager.
Maintain composure even if you’re stressed!
Example:
Recruiter: The Compensation team is reviewing the offer. We should have it ready for you by the end of the week.
You: I really need this offer today. I've been out of work for several weeks now, and finances are tight.
Instead, try this:
You: Excellent, I’m very excited about this opportunity! However, I’m deciding between several offers,and have kept the other companies waiting for a while. Is there any way to expedite the process so I can make a decision today or tomorrow? I want to ensure I’m respecting everyone’s time.
Special Scenarios
Multiple Offers
Skew the odds in your favor!
With multiple offers you can leverage companies against each other to ultimately obtain the best and highest compensation.
Don’t worry if all interview processes do not conclude the same week. It’s perfectly appropriate to ask for additional time to make a decision. The inverse is also true. You can leverage an offer from one company to expedite the decision making timeline of another. Market yourself as a desirable candidate!
There’s a distinct difference between lying and creating an air of ambiguity regarding an offer situation. Our Levels.fyi negotiation coaches recommend providing strategically ambiguous details.
For example, try non descriptive phrases such as "I’m waiting to hear back from a few other companies" or "I’m wrapping up interviews with several other companies. I’d like to see the processes through to make sure I’m making the best career move for myself and my family."
đź’ˇ Some companies will ask to see the offer letter if you claim you have a competing offer. This accomplishes two things: One: your recruiter now knows what the competitor is paying for a similar role and the company collects valuable data. Two: lying about multiple offer situations is discouraged, because you have to provide proof.
Exploding Offers
Exploding offers are offers which expire shortly after they are presented to the recipient, usually 24 to 48 hours later. Companies recognize excellent talent is a hot commodity, and the sooner you accept their offer, the sooner you are off the market. Consequently, this means you are less likely to join a competitor’s team. Exploding offers can be tricky to navigate, particularly if you’re working to garner multiple offers. However, there are a few strategies you can leverage to make the best of the situation. Ask the following questions:
- Is there a reason you need an answer by this day?
- There may be a legitimate reason such as a group training or internship class start date. There may be no valid reason other than the recruiter merely wants to wrap up the process as quickly as possible.
- May I please have an extension?
- Reasoning: This is a significant decision for me, and I’d like to take some more time to consider the offer, discuss it with my family and decide if this is the best opportunity for us.
When possible, don’t allow exploding offers to completely alter or impact your decision. In most cases, extensions are possible and most large companies will not invalidate an offer if you politely request additional time to make a decision. If the company is not willing to offer an extension, and you find yourself caught in a bind, you can always accept the offer and later decline should your preferred choice come to fruition. Although not all candidates are comfortable with this strategy, it’s not uncommon, and will not tarnish your reputation.
Your Negotiation Starts Now
Negotiation is a skill. Like coding or system design, it improves with practice. Remember:
- Your skills have value
- You deserve fair compensation
- Confidence comes from preparation
Hopefully, you find this content informative and will use the tips and suggestions to guide future salary negotiations. Remember, negotiation starts much earlier than the offer phase. Starting at the recruiter phone screen, discussions about compensation start early and extend through final agreements.
Ultimately, the goal isn't just to maximize your immediate compensation, but to establish your professional worth and set a trajectory for your career growth. Your future earnings often build upon what you negotiate today, making each negotiation a crucial investment in your financial future.
If you’d like additional assistance, our team is available to support you every step of the way! To make the best use of our service, make sure to engage with us as early into your negotiation process as you can. But, no matter where you are in the interview process, our team of expert negotiators will equip you with the appropriate knowledge and confidence to navigate offer negotiations with ease, and we guarantee an increase or your full money back.