I got $50,000 more when I negotiated my tech salary

Key Takeaways

feedback from your interviews was very positive and the team has decided to extend an offer i can't put into words how excited i was when i received this call from my recruiter part of me also felt relieved to know that i won't have to sit through awkward interviews discussing my weaknesses anymore right at that moment my recruiter said something that completely flipped things around i'm going to start preparing your offer before i do that could you provide me with your salary expectations i had no clue how to answer that question i was so busy between job applications and interview preparation that i never took a moment to think about the salary i was targeting and to be honest i learned it much later that answering this one question incorrectly can cost you tens of thousands of dollars in the tech industry before we get into how i answered this particular question it's very important to know how tech companies decide what salary they pay you your salary is determined by the level you get hired at that's why it's very important to know what level your job offer is for now different companies call the same level differently for example as a new grad if you get hired at amazon you get level 4 or l4 whereas in google you get l3 and if you add facebook or mera to the mix they call their entry level e3 instead of m3 as you can see these levels are very confusing to compare the levels across different companies you can use this free website called level.fyi you can select the job role you're interested in from this dropdown and you can select the companies they're interested in from this other dropdown then compare them for each level companies usually have a predetermined salary range they'll pay to new hires they rarely go outside these ranges because to do so recruiters have to get approvals from the leadership of the team you're getting hired for and usually recruiters don't want to go through this hassle unless your interview performance is spectacular and they can make a good case for you this salary range varies a lot depending on the level for lower levels like l4 or l5 this range is usually tens of thousands of dollars whereas for high levels this range can be a few hundred thousand dollars so how do recruiters decide what exact salary to pay you within this range well they say it's based on interview performance but in my personal experience it's usually the lowest number they feel they can get away with to add to that the first offer you get is usually less than the 50th percentile in other words it's in the bottom half of the range that's why if you accept the first offer you're given you leave tens of thousands of dollars on the table now that you know how tax salary works at a high level how do you determine your target salary and more importantly what should you say when a recruiter asks about your salary expectation don't know when your target salary is very important for negotiation the answer to the salary expectation question is actually unrelated to your target salary that's because in no circumstances should you give salary expectations to the recruiter there are a few reasons for this number one the recruiters know that as long as they pay you around their expected salary they'll be happy with it so they have no incentive to pay you any more than your expectations and you can end up losing money number two once you give out a number there's no going back if you get another job offer later on you'll not be able to use that offer in your negotiations lastly salaries in the tech industry change very frequently and keep going up every year so even if you have done your research and you feel confident about your numbers you might still lose money in my case i had done no research about the salary and i was very honest about it with my recruiter and this worked in my favor as i ended up not giving any salary expectations a key takeaway from my experience is that i don't know is a valid answer to this question so you don't need to prepare any fancy response like many others advice as long as you don't give out a number first you're golden answering the salary expectations question solved only part of the problem my recruiter was already preparing my job offer i knew that we will be discussing hard numbers in our next call so i started doing some research to find my target salary to find the target salary there are many resources out there we have glassdoor which doesn't work great because it doesn't cover all the components like rsu's and silent bonus another option is linkedin which covers different components but doesn't give you salaries by each level by far the best option to research tech salaries is this free website called levels.fyi on levels.fyi you can look up tech salaries for every level on top of giving you an average salary for each level they also provide you a breakdown of the salary by different components like base stocks and bonus one thing to note here though is that this bonus component is not very reliable because some people add their annual bonus here whereas others add their signing bonus that's why i have a secret tool that i use to negotiate my bonus and i will share it with you later in this video the most useful feature that most people don't talk about is the salary distribution feature i will talk about how to use all this data effectively in a moment this will take your negotiation game to the next level so if you find in value in this video you can hit the like button since my recruiter had told me the level i got hired at i looked up the compensation for that level on levels.fyi to my surprise i found that even the highest salary for that level was undesirable and this was a major roadblock because as i already mentioned tax salaries rarely go outside the predetermined salary range for a level so i had to do the impossible task of negotiating a salary more than anyone has ever got at my level to do this i did an in-depth analysis of negotiability of different components of salary let me explain what i mean by that as you already know tech offers have different components like base salary stocks bonus and level you get hired at you can try to negotiate any of these components but tech companies are not open to negotiating these components equally let's discuss the negotiability of different tech salary components sign in bonus is the most negotiable component of tech salary that's because it's a one-time payment and the companies are okay giving you some extra cash to lure you into signing the offer stocks are the next easiest negotiable component of tech salary this is because the range of stocks you get as a level is very wide and most of the time your first offer is on the lower side of the range the base salary is next but it can be negotiated a lot that's because your annual bonus in increments are a percentage of the base salary and an increase in base would mean a compounded increase in annual bonus and increments level is the least negotiable component of an offer because level is determined by the hiring manager along with the high-end committee based on your experience and interview performance after learning this i concluded that the only way to get my desired salary is by negotiating the level and this is simply because unlocking a new level would make an entire new salary range available for negotiation but as i already mentioned the level is near impossible to negotiate so i started thinking about ways to negotiate my level the next day i had the dreaded call with my recruiter and the numbers were in line with the level i got hired at but were below what i wanted though i knew i wanted a high level i needed some time to figure out how i was going to do it so i thanked my recruiter for the offer and asked for a couple of days to think about it then i went back to the drawing board to come up with the arguments i could make for my case i reached out to my friends who already worked in the industry to understand the difference between the job responsibilities of the higher level and the level i was offered then i went back to my work experience and dug up concrete examples where i demonstrated the skills required for the higher level to bolster my case further i used arguments my hiring manager made while complimenting me on these skills during the interview once i was ready i scheduled a call with my recruiter instead of me asking for a higher level i asked my recruiter why i was not considered for that higher level it seemed like my recruiter didn't expect this question as they didn't have a good answer for it so i found a good opening in their answer and made all my arguments for a higher level if you notice closely i was using the talk less listen more method for negotiating most candidates ruined their case by blabbering a lot and showing all their cards in the process unless absolutely necessary my responses were as short and direct as possible and whenever i wanted to ask for something i would pose it as a question so that i would have to speak as less possible my recruiter went back to the hiring manager with everything that we had discussed and i ended up getting a high level and a new offer i thanked my recruiter and asked for one more day to think as i still had to find my target salary for this new level to find my target salary for the higher level i went back to level.fyi and looked up the data for the new level as i mentioned earlier there's a lot of data levels that apply provides and it's very important to know how to use this data to your advantage the first thing i did is that i looked at the salary distribution chart we talked about earlier there's a couple of things you need to know about this chart one this chart includes salaries from different times and as tax salaries keep increasing every year the lower numbers on the chart are usually outdated salaries another thing to note is that this data includes salary from different parts of the world and might not apply to your job location so i took this chart as a starting point i used the 75th percentile number as the minimum number i would be happy with to determine my target salary however i use the raw data points to remove the noise from the data i also eliminated the data given by people who have been at the company for some time the reason for this is that these people might have seen some stock appreciation after they joined the company and their salaries don't represent the salaries of new hires then i filtered the data by job location after that i sorted the data by the decreasing order of salary then i just look for the highest representing salary in the data that is left i took the repeated salary to make sure it's legit then i looked closely at the salary breakdown to ensure it makes sense for example if the bonus is more than 15 20 i know that the person is giving a sign-in bonus instead of the annual bonus once i had this number i used it as my target salary this entire exercise helped me determine all components of my salary except the sign-in ones as i already mentioned the bonus data on level.fyi is a little fuzzy to get my target sign on bonus i use blind i looked for other offers from the same company at the same level and picked the highest representing sign-on among all offers and used it as my target sign-in bonus once i had all the numbers i set up a call with my recruiter and asked for my target salary a couple of days later the recruiter got back to me with another offer that was slightly lower than what i asked for but it was close enough since i did not have any alternate offers to negotiate further i accepted their offer and ended up making 50 000 more than the initial salary if you want to get an in-depth understanding of different components of the tech salary you can watch this video at the top if you want to learn more about how to get multiple offers to negotiate better you can watch this other video at the bottom i will see you in the next one