By Veronika Tyukova
Salary negotiation is a sensitive subject. In Russia, where I am from, it was considered bad manners to brag about yourself. In the US it’s called “selling yourself,” and you have to learn how to be good at it. You might be great at physics or chemistry, but if you don’t know how to “sell yourself,” you may not get the jobs you want or the salary you deserve.
So, how best to approach salary negotiation?
To find out, I attended “Salary Negotiation 101,” a webinar led by Niya Dragova from Candor, a human resource-negotiation company. Niya started with a test-case about a product manager who made $283K at his job and decided to move to another company that offered him $390K. He was happy to accept their offer, but Candor helped him to negotiate to a salary of $521K. This was a very impressive story. Niya had my attention.
What I Learned
Start with “WHY.” WHY are you applying for this job? WHY this company? Then think about how you can contribute and how you can take this company to the next level. Once you have answers to these questions, structure your conversation with people involved in the hiring process about value you are bringing and not about “what’s in it for me.” When all hiring managers see how you can help their company and want you to be part of their team, you are in a position to negotiate.
Know the basics. It is not just a salary; it is a compensation package. It may include equity, benefits like healthcare, vacation, signing bonus, relocation, annual bonus, free snacks, and other perks. For example, an annual bonus might be 10%-25% of your base salary, but it is not guaranteed. If an annual bonus is part of your package you may want to ask:
Equity is an important component of a compensation package. Shares of public companies, like Google and Facebook, are as good as cash. Shares of growth stage companies, like AirBnB, are worth 50%-150% of quoted value. With a startup company you are taking a risk with equity; you don’t know where the company is going to be five years from now, but you have more influence and negation power.
You may get RSUs (Restrictive Stock Unit) or ISOs (Incentive Stock Options). With RSUs, a company promises to give you shares when they go public or sell the company. RSUs are common with big public tech companies. Incentive stock options are more common with startups.
It is also important to understand vesting schedule-the time when you can get all or part of your shares. In many cases you will get a certain percentage (ex, 20%) after the first year and then get a smaller percentage (ex 2%) each month for the remaining vesting period.
If you are offered options here are some good questions to ask:
What you are paid has nothing to do with your cost of living. Sometimes people are happy with the first offer they receive (like our test case subject above) because it covers their costs or is more than what they used to make. Think what you could be doing with the extra money: invest in education, enjoy a hobby, travel, donate to a favorite charity, fund a non-profit organization, start your own company, etc.
At the end of the webinar, Niya shared her “Four Golden Rules of Salary Negotiation”:
You can potentially increase your compensation package by 50% just by communicating the value you are bringing and by asking the right questions. I wish I attended this webinar ages ago, before I started my first job. but, as the saying goes, it’s better late than never!
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