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Tech Life

How to Negotiate the Tech Salary You Deserve

Most tech workers either think they're underpaid, or don't know if they are, according to recent data. Here's how to get paid what you're worth.
Nov 17th, 2021 9:00am by
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Two years after graduating from university, Valerie Phoenix landed a developer job at an insurance company that paid her “real money” — at age 24, she was making $91,000.

She was thrilled, until she found out she should have been making about $30,000 more, given her experience and the standard of living in California, where she worked.

“I remember thinking that is a lot of money,” Phoenix told The New Stack. But looking back on the interview, “I realized the HR person kept asking me how much I was making at my last job. Repeatedly, in different ways.”

She now knows that’s considered discrimination in California.

Finding out that your employer has taken advantage of you is excruciating. “I was distraught. I was really hurt,” Phoenix said. “Is it because I’m young? Is it because I’m a woman? Is it because I’m Black? It took me six months to recover from that and then start looking for another job.”

She leveled up to a senior developer in Los Angeles, making $120,000 when someone with her experience and skills in that market should’ve been making $140,000. She did try to negotiate for more money, but her employer said they couldn’t afford it. Later, she learned that a male coworker with the same role and experience got that market rate.

This year, Phoenix started a role as an engineering manager at Alma. It’s her second managerial role, but the first time she’s ever been paid at market rate — and the first time her salary outweighs her college debt.

Her experience is not unusual. Half of tech workers think they’re underpaid, according to the jobs website Dice’s 2021 tech salary survey — and another 20% don’t know if they are.

The study also found that just under half of all people negotiate. And we know women and people of color suffer disproportionately from not negotiating salary.

Even negotiating doesn’t always work. “If you’re not used to having money, you might actually lowball yourself because even the lowball sounds like a lot,” noted Phoenix, who founded a nonprofit, Tech By Choice, that helps nurture diverse talent for tech jobs.

So how do you negotiate up to that market rate? You need to understand not only how to access the dollar amount you deserve, but also educate yourself about your full range of available benefits — including health insurance, stock options, and paid time off. But first, you need to get more comfortable talking about money.

It’s OK to Talk About Money

If you feel uncomfortable talking about money with your peers, Phoenix said, “you can go years without knowing you’re making less.”

Ingrid Epure, a staff software engineer at Netlify who prides herself on her negotiation skills, has noted some differences particularly between how men and women broker their compensation.

“Women tend to underplay their skills and men overplay their skills and that’s reflected in their paycheck, especially when the hiring pipeline is not diverse,” Epure said.

Data backs up her assertion. Women are 16% less likely than a man to apply to a job after viewing an ad for it, and women apply for 20% fewer jobs, according to LinkedIn. That could be because women only apply for jobs for which they meet 100% of the stated qualifications, according to an oft-cited Hewlett Packard report, while men will apply if they meet about 60%.

“I negotiate hard,” said Epure, a Romanian immigrant in London who grew up in a low-income household. “I think I do well. With job changes and growing with my career, I understand what I bring to the table.”

To help hone her negotiating skills and financial savvy, she’s researched these topics extensively. We included a list of the books and podcasts that she said have been most helpful at the end of this article.

As a society, we are typically told that it’s rude or vulgar to talk about money. That’s something you have to overcome if you want to get paid fairly, Epure said.

“I think it’s OK to say money is important and companies make money off my work,” she said. “I think earlier in my career I was ‘working for exposure’ and I wish I had valued my skills more. Money is a motivator now and I do think I do need to be compensated well.”

She continued that she’s benefited from practicing negotiating with her friends. It builds confidence and is a great way to bounce off ideas. It also helps you to spot any red flags and to see how your offer compares with your peers.

Compensation Is More Than a Salary

When you negotiate your compensation, you’re not just talking about a dollar figure. Benefits can make up a big chunk of your compensation, and some of those bennies —such as paid time off, family-leave policy, or the quality of your health insurance — can have a big impact on your overall happiness with your employer.

Lucas Casarez is a U.S.-certified financial planner, the founder of LevelUp financial planning and host of the “Techie Personal Finance Bootcamp Podcast.” (His clients are all tech workers; Phoenix is one of them.)

A lot of Casarez’s clients are what he describes as “first generation in wealth building”; in many cases, they are supporting their parents, and may not have many people in their circle who they can rely on for relevant financial advice.

“If you’re not used to having money, you might actually lowball yourself because even the lowball sounds like a lot.”

—Valerie Phoenix, founder, Tech by Choice

It’s important to note that while tech salaries in the U.S. can seem mind-blowingly high, the American tech worker typically has student and credit card debt. In the States, health insurance is perilously tied to employment. Also, unlike Europe, paid and unpaid time off varies widely by employer.

Negotiating tech salaries is tricky because there are more factors than a lot of other sectors — you need to consider the whole package, not just your base salary. The competition for talent is fierce and not everyone plays fair.

“Sometimes even if you think you got a $20,000 increase in pay, it may not be, Casarez said. “They are trying to recruit you in, they’re not going to say ‘Hey our health insurance is horrible.’”

Among the offerings that you’ll want to know about before you accept a job offer:

  • Expectations of schedule and where you work. COVID-19 accelerated the move toward remote work and flexibility with working hours. If you’re expected to work in an office, how many days a week? If you’re remote but working in a different time zone than some of your colleagues, how early or late will you be ”on the clock”?
  • Bonuses. What are they based on, when are they paid, and how will they be taxed?  including what are they based on, when are they paid, how are they taxed
  • Health insurance. Are dental, vision, mental health care and wellness covered? How much are co-pays, reimbursements, and the employee contribution? Remember to ask about dependent coverage. Even if the company pays 100% for employees, they may contribute significantly less for spouses and children.
  • Paid time off. Is there a minimum and maximum? Do unused days off roll over to the next year?
  • Family/parental leave and disability leave. Beyond legally required leave, how many paid and unpaid days of leave can a parent or caretaker take? Are there adoption and fertility treatment benefits?
  • Child care. Is daycare subsidized, and if so, how does that work?
  • Professional development. You’ll want to keep upskilling. Ask about tuition reimbursement but also support for courses, books, certifications, conference registration fees and travel.
  • Stock options. Ask how they work, and what the vesting schedule is.
  • Retirement plans. Ask about vesting schedules, and if the employer matches employee contributions, and how much.
  • Immigration support. Can you get assistance with worker visas or the citizenship process?

Don’t forget to ask how long the probation periods are before your benefits kick in—for example, does your health insurance start right away, or after a few weeks or months? It’s one thing to not be able to take a day off for three months, but it’s another to not have health care coverage. And for anything you are contributing to, you need to know how that will affect your taxes.

Also, remember that health care is protected by privacy laws, so a good way to get around disclosing anything you don’t want to is to ask for a breakdown of the percentage of coverage and copay by every category, in and out of the insurance network.

Are your current doctors included in the plan? Feel free to call the insurance provider (or check their website) and ask for the specifics that matter to you and your family.

What to Ask About Stock Options

Tech jobs often come with stock purchase plans, giving you an opportunity to invest in your employer. This can be a huge gamble, depending on how your company fares over time.  Ask what your shares would be worth to date versus if they vested over time. Are your stock options appreciating?

“Yes, Intel, Apple, Amazon, those are known values, but then there are these startups that are crazy amounts or less than a piece of paper,” Casarez said. “They will say you’re getting $10,000 worth of shares but it seems like nothing.”

If it’s a publicly-traded company, he said, it is definitely worth getting some shares — but diversify your investments beyond your own company. If they haven’t “IPO-ed” into the public stock exchange, they may be just pricey lottery tickets.

Ask about the first estimated values for the shares and the timeline for them to be liquid and available. At startups, Casarez said, it’s often a hypothetical value versus at a publicly-traded company that has a known value.

When to Start Talking About Salary

Consider asking about salary and benefits early in the interview process. It’s harder to negotiate once you’ve gotten attached to an opportunity, and it’s better to know if it’s a bad fit before wasting everybody’s time on the often tedious tech interview process.

Taylor Desseyn, senior recruiter advocate for the engineering division of the search firm Vaco, and podcast host of “Guidance Counselor 2.0,” recommends asking about the salary range as soon as possible — even as soon as you hear from a recruiter.

“People mess up by asking: What does this position pay?” Desseyn told The New Stack. “Recruiters and employers are very concerned about giving one number because they don’t want that person to stick to one number. There are so many subjective things.”

But you absolutely should, he added, ask the hiring manager on the first call: “What’s the range of this position based on experience or how I interview?”

Now, they may come back with the always awkward “What do you want to earn?” — which is usually just a way to ask your current salary without breaking laws that prohibit that practice, and can penalize people who have been underpaid.

A job candidate should always have two numbers in mind from the start, Desseyn said — your ideal and your bare minimum. Always remark that any number you suggest is “dependent on benefit overview.”

“If somebody’s not willing to have a very natural conversation around compensation early and they shut you down, that’s not where you want to be.”

— Taylor Dessyn, senior recruiter advocate, Vaco

To help arrive at the ideal number, research your market. Desseyn suggested giving five to 10 recruiters in your area a call. Ask them for price points: “I’m at this price. How would you price me?”

For most medium to large organizations, Glassdoor, and Indeed can also give you good insight into your prospective employer’s typical salary range, benefits and their monetary value, and how they hold up to industry benchmarks.

It may be the easiest way to get clues into answering tougher questions, too — ranging from specific prescriptions and procedures covered by their health insurance to their diversity and inclusion rating.

How to Negotiate (and When to Walk Away)

Once you’ve armed yourself with your research and know what you want, here are more tips for successful negotiation:

First: Always negotiate.

No matter what, you should always negotiate, Desseyn advised. “Negotiating shows the hiring manager that you’re willing to push back,” he said, adding, “If a company rejects your offer because of your negotiation, it’s going to be better in the long run.”

Since companies have moved fully remote, he’s been able to get in-demand developers $50,000 raises. He’s not a magician. Tech salaries have increased at all levels over the last year — so if you haven’t seen a salary bump recently, you may be due one.

Negotiate over email.

Always negotiate over email, Phoenix advised — it takes away some of the awkwardness, and having everything in writing helps clarify everything.

Know your rights.

Pay attention to how the hiring organization talks about money. Asking for your current or former salary — although still legal to do in some places — puts people at a disadvantage. What you’re worth is not necessarily what you’re currently being paid.

Check on the anti-discrimination laws in the employer’s country and yours. Any undo remarks or nosy questions about pregnancy, relationship status, family, or gender or sexual identity are signs you should probably walk away — and mention the conversation on Glassdoor or to the company’s human resources department.

Watch for red flags.

How the recruiter or hiring manager reacts to you asking about salary can be a red flag. “If somebody’s not willing to have a very natural conversation around compensation early and they shut you down, that’s not where you want to be,” Desseyn said.

Red flags are deeply personal, Desseyn said. Make sure to ask questions about company culture — and then google what current and former employees say online, to check if it’s true.

Finally, don’t let anyone tell you what you’re worth. The tech industry is in a unique place of privilege where, for the majority, there are more job opportunities than talent to fill them. Follow your instincts: take the job, or walk away if it’s not for you. You’re the one who will have to actually log in each day and do the work.

Resources: 8 Places to Learn How to Negotiate a Tech Salary

Ingrid Epure, a staff software engineer at Netlify, recommends the following books and podcasts for tech workers looking to learn more about how to negotiate for better compensation:

What about you? We are looking to share both more stories and more tactics to manage the sudden income of tech jobs. Tell us on Twitter @TheNewStack and @JKRiggins.

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TNS owner Insight Partners is an investor in: Alma, The New Stack.
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