While the resounding understanding in many circles is that tech workers are generally very well compensated, the conversation inside the fold sounds a bit different.
As part of our third annual State of Salaries Report we surveyed more than 700 tech workers who landed a job they love on the Hired platform about their attitudes towards compensation and cost of living, and found that 41%—or 4 in 10 tech workers—believe they are not compensated fairly. And that’s given a global average salary of $135K for workers in product management, design, software engineering, and data analytics roles.
Read on for more thoughts on when to negotiate your compensation and non-salary factors to consider as you calibrate your expectations.
While a new job offer is undoubtedly exciting, the proposed salary can sometimes be a letdown—particularly if you’re looking for jobs with earlier-stage companies who have less funding to spend on employee compensation.
Before getting too far along in the interview process, do some research to align your expectations with the reality of what the company (or companies) you’re interviewing with can offer. Sites like Glassdoor that display employee-reported salaries can be a helpful benchmark to start with. Even if the specific company doesn’t have any data, look at some comparables to get an idea of what others in the industry are paid for similar roles. It can also be useful to research market data on an aggregate level, considering which roles you’re looking for, your age, location, and other factors. Much of this data can be found in our State of Salaries Report.
Further, to get more accurate salary data, platforms such as Hired report actual salary ranges for each role posted, which makes setting expectations significantly easier.
Your salary expectations should be aligned with how you’re hoping to grow your career in the role—which sometimes means accepting lower pay for a unique opportunity. In other cases, however, a high salary will be an integral part of how you consider your career “growing”, so be honest with yourself about your priorities and the reality of your cost of living, savings goals, and other financial considerations.
In an ideal world, you’ll be able to find a great opportunity for learning and growth that also pays handsomely, but that might not always be the reality. Before jumping into the job search, take stock of your career so far and consider which skills or experience you’d like to line up next—then stack rank the importance of that against salary considerations.
Many startups will offer a lower salary offset by employee stock options, which can be a way for the company to conserve cash when it’s limited, as well as a way to give employees some skin in the game—as taking compensation in the form of equity incentivizes employees to do everything they can for the company to succeed.
Before accepting a big equity package paired with lower salary than you would normally accept, do some serious due diligence on the company. Additionally, take initiative by speaking with peers at smaller companies that may have equity packages and recruiters who have market insights into compensation philosophies. You want to ensure that you understand where the market is, including what’s actually being offered. Here are a few top questions to ask when considering an equity package.
In addition, if you feel the salary you’re being offered is too low and the company won’t budge, consider asking them for more equity instead. They may be more willing to accommodate with non-cash compensation. Wealthfront has a useful guide on trading salary for equity.
If you’re still unhappy with your salary after setting your expectations appropriately, considering the potential of career growth, and analyzing the equity package you’ve been offered, it’s either time to negotiate—or to move on to the next prospective employer. Before your negotiation, practice what you do (and don’t) want to say, including data to back up your claims.
And don’t be scared to negotiate. It’s common enough that companies will probably expect it, and whether or not you’re able to secure a higher salary, chances are the employer will respect you even more for valuing your own worth. Good luck!