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Salary Negotiation
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Seeing a lot of people post their salaries, most of whom are deleting after for a variety of reasons. As someone who did doctoral level research on salary negotiation and has designed the compensation strategy for 2 distributed tech cos, I have some add’l context that may help.
Compensation is hard. I argue it cannot be fair because “fair” is a personal construct depending on one’s perspective.
The debate I’m seeing is about a single rate of pay for software engineers no matter where they live because they bring the same amount of “value”. Another fallacy. Engineers outearn every other function at most companies, and I’d argue all functions bring comparable “value”.
If you are a software engineer in a lower cost market wanting SF pay, are you also advocating for the technical support specialist, the product marketer to earn your same salary because they also bring equal “value”?
Truth is, compensation is money, and money is economy, which means supply and demand. This is how market rates are formed. Market rates have historically driven the compensation discussion. That doesn’t mean they always have to.
Software isn’t paid more because they bring more value, they’re paid more because they have a skill set that is more rare compared to the demand for it. If you’re going to argue for single rate, think about how the argument can be framed from a demand perspective.
But even then equal pay for all roles no matter the location has major, major impact to a company’s ability to be competitive and sustainable. I know of 5 companies who do this and all but 1 anchor their comp in a market rate that is lower than San Francisco.
Doing so- say anchoring comp as a single rate in Chicago or Austin means everyone can be equal but it’s going to be real tough for someone in SF or NY to have any quality of life and those companies are more likely to miss out on a high concentration of talented people.
The only company I know of who does have a single SF rate is outspoken that they never intend to grow past 100 people. So for them, this is highly competitive while still sustainable. Most companies intend to grow past that 100 mark which makes this strategy unsustainable.
I’m guessing many of you are feeling frustrated by this logic and I want you to know I deeply care about equalizing compensation, especially for groups who have historically been undercomped against their peers (women and URMs).
So here’s my starter pack of advice to all, but especially women and URMs for whom this “data” (anecdotes lacking context) which people are posting is intended to help. Here are some critical tips for maximizing your salary relative to your peers.
1. Know your rights. It is illegal in many states now to ask a previous salary so your history will not hurt you. It’s good when taking a new job on the 1st call with the recruiter/hiring manager to ask for the salary range before they get a chance to ask your expectations.
I recommend asking it as, “I’m excited about this role and I like to get this out of the way on the first call so neither of us are wasting each other’s time if it’s not a match. What is the target salary and salary range for this role?”
2. Know your worth. There’s tons of anecdote and garbage-in-garbage-out data sources. If the website allows you to write in anything for your salary, know that it’s likely not accurate. There are key products comp professionals use where all data is formally put in by companies.
The official data providers don’t run comp as you’re sharing it. Job skills, avg YOE for the job category by level, location, industry, revenue size, # of FTE, funding, etc are collected and companies can determine rates by filtering these factors to match their stage.
It’s further complicated by whether the company anchors their range at market (50th percentile), above (75th), or top (90th). So when looking at anecdotal data, remember that context is missing. I know you’re probably annoyed thinking, then how am I supposed to know my worth?
I still think there’s *some* merit to those sites as they have been close in some occasions but take them with a grain of salt. Use them as a data point, not truth. Try to get every company you interview with to give you ranges recognizing their context/segmentation.
And while this doesn’t scale- for people who are unemployed, underemployed, or confident they are paid less than their peers at equal level/location and want personalized advice from me on their market value and how to negotiate, I’m dedicating my Sunday night to you.
For the first *10* people who DM me their story, I will offer a mini consulting session where I pull actual, vetted data for you and talk you through ways of getting what you deserve. If you’re unemployed we can also swap this out for job search advice. Open to written form/zoom.
Addendum- this is purely about base salary compensation- the discussion complicates much more when considering equity/stock, bonuses, benefits, etc. - Happy to consult on those too.
Update: wow, did not expect such a massive reply to something I threw together in 10 min this am from my phone! I am grateful I made a difference for many of you. I am WAY overloaded on DMs (how do influencers do this?!), but I am working to reply to as many people as I can.
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