When you receive a job offer from a company, you get the numbers of salary and other compensation that they are ready to give you. An important, but often less talked about fact is that you can actually negotiate these numbers. You probably won't make your offer much bigger, but negotiating a 5-20% salary increase is quite possible.

To many people, negotiating sounds scary. You may be afraid that asking for something more can potentially sabotage your offer, and you are ready to accept the first numbers you get.

The important thing to remember here is that the company wants to hire you as much as you want to get hired. If you've received an offer, the company has already spent a lot of time interviewing you and selected you from many other candidates. Good engineers are rare, and for every candidate who receives an offer, there are hundreds of resumes checked and dozens of interviews conducted.

It takes a lot of time for recruiters and engineers to screen candidates and conduct the interviews, so it is estimated that hiring one engineer often costs tens of thousands of dollars. And even when the company finds a good candidate and extends him or her an offer, there is still a chance that the candidate may simply go to another company – good candidates often have multiple offers at hand.

With this in mind, it should become more clear that negotiating your offer a bit won't make the company turn you away. The company has already spent a lot of time to get to the offer stage, and they will be glad to reach the consensus and hire you so that this time is not wasted.

Tips on negotiating

Here are some practical tips on negotiating your offer:

  • It is hard to negotiate without the leverage, so try to state why you would like a bigger compensation. Maybe you have other offers, need more money to cover your mortgage or something, or simply know that you offer is below the market average?

  • The best leverage to increase your offer numbers is to have bigger competing offers. If some company offers you 10% more, it should be a no-brainer for other companies to increase their offers 10% too so that you may choose them. You may even repeat this process several times.

    Therefore, it is super important and helpful to receive several offers at roughly the same time. To do this, make sure to apply to companies and pass the interviews at roughly the same time too.

  • Sometimes, it may be hard to increase your salary, but the company may be more flexible in some other aspects. Maybe the company would be more willing to give you a signing bonus? Or more stocks? Or even something like a relocation bonus or a bigger vacation?

    Be creative, and compare your offers on all aspects rather than only the salary. This way, there is more room for negotiation.

  • Another aspect you can look into is the level at which you are getting hired. For example, if you are getting hired as a Level 3 Software Engineer, ask what it would take to get hired as a Lever 4. In some cases, you may need to pass some extra interviews for that, and it is often worth trying. Also, if some company is ready to hire you at a higher level, you may negotiate with other companies for a higher level too.

    Getting hired at a higher level almost always means a bigger salary and it often can be much easier than getting promoted inside the company.

  • Whatever you do, be polite and kind. Negotiation is not about "winning", but rather about exploring the possibilities. Don't try to push it too far, and appreciate what you get.

Read more

You can check out the following resources to learn more about negotiation:

Action Items
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1. Understand compensation.
Before starting a negotiation, it is very important to understand compensation first – what it consists of and what is the typical salary range for your level of experience in different companies. Be sure to read Compensation section and research typical compensation numbers in the companies you are applying to.
2. Calculate how much it costs to hire a software engineer.
A good exercise before negotiating is to approximate how much it costs to the companies to hire a software engineer. Try to do your own calculation, and include the number of hours spent by different people to read resumes, conduct interviews, make decisions, and so on.

After you get your number, compare it with the calculations done by other people, for example, here, here, or here. Realizing that hiring engineers is very expensive makes you understand that companies want to hire you as much as you want to get hired.