How to Counter Offer in a Salary Negotiation
Never throw out the first number.
That’s the first rule for negotiating a good counter offer, according to Nick Singh, a career coach and author of the forthcoming book Ace the Data Science Interview. Singh has helped hundreds of people land jobs at large tech companies.
“In terms of the counter offer, whoever talks least often can win,” he said. “When you talk a little slower, and you give fewer details, that’s when [the recruiter’s] like, ‘Yeah, this is the number. But you know what, we really do like you, so this can be flexed.’”
Too many tech professionals jump at the first offer they get, or come back with a counter too hastily, Singh, a former software engineer at Facebook and Google, told me.
But in failing to negotiate a counter offer, many tech professionals don’t realize their value, Rebecca Andersen, director of career services and alumni relations at UC Berkeley, said: “There’s no harm in trying, literally no harm.”
And a missed opportunity can have a compounded effect over time, as raises are typically based on a percentage of base salary. On NPR’s “All Things Considered,” economist Linda Babcock of Carnegie Mellon University pointed out that people who don’t negotiate their salaries at the start of their careers lose between $1 million and $1.5 million over their lifetimes.
“In terms of the counter offer, whoever talks least often can win.”
While smaller companies and startups may be bound by fixed salary scales, for large tech companies like Facebook and Google — where Singh said it’s not outlandish for a 27-year-old software engineer living in the Bay Area to earn $300,000 a year — salary negotiation is a ritualized part of the hiring process. Those who do it well can earn a significantly higher salary or move the needle on other perks like stock options, signing bonuses, moving fees or benefits packages.
“Yes, there are tons of software engineers, but, on the other hand, hiring is really hard. And if [a large company like Facebook] is willing to pay you so much money, $25,000 extra isn’t that hard. What candidates don’t realize is the loaded cost of even giving someone an offer,” Singh said.
Plus, there’s little harm in trying. No one — at least no one you’d want to work for — is going to scold you for it, Andersen told me. In all the years she has advised students at UC Berkeley, she has never heard of an offer being revoked because a candidate asked for more money or other incentives. In fact, negotiating for a better deal may show you’re assertive, skillful at communicating and willing to advocate for yourself — qualities most employers want.
Still, there are unspoken rules of engagement that can lead to very different outcomes at the bargaining table. Here, experts describe successful strategies — and ones to avoid.
Counter Offer Strategies
- Be comfortable with awkward silence.
- Ask a follow-up question.
- Turn the salary expectation question around.
- Get the salary range.
- Conduct comparative salary research.
- Prepare an organized argument.
- Ask for a 10- to 20-percent bump.
- Look for non-salary levers to pull.
- Be ready to walk away.
- Be brave.
Be Comfortable With Awkward Silence
Shortly after graduating from the University of Virginia, Singh landed an offer from Facebook for a role as an entry-level data software engineer. The recruiter tried to pin him down to a salary figure and signing bonus.
What did Singh do? He mostly kept his mouth shut, not accepting the offer immediately. He floated one brief comment in reply:
“I’m really excited about the opportunity at Facebook, and it’s been my dream to work on your world-class growth engineering team, but the potential equity upside from the other startup I have an offer from makes the compensation at Facebook not as attractive as I’d need to sign,” he said.
That’s it. He took a long — and awkward — pause, and they came back with an offer. After the ten-minute conversation, the recruiter upped Singh’s signing bonus from $25,000 to $50,000.
“People are used to filling in awkward pauses. But with these negotiations, thirty seconds more thinking about something before you respond can lead to $30,000. Why not?” Singh said. “This is not a normal conversation you’re having with someone. This is a high-stakes thing.”
Ask a Follow-Up Question
Recruiters, VPs and CEOs are trained to sell and close deals, Singh told me. They can make a first offer look wildly attractive, especially to a disenchanted job seeker in a vulnerable position, but it’s important for candidates to keep a cool head. It’s perfectly acceptable to express your excitement and gratitude and tell a recruiter you need time to review the details of the contract.
You can also use the offer as an opening to ask more questions.
“Do not present a counter offer [when you first hear an offer]. 100 percent do not.”
“Can you give me a little more context around this number?” Andersen suggested. Or, “Can you tell me where this [salary] fits within other roles that are similar?”
But “do not present a counter offer then,” she advised. “100 percent do not.”
And the reason is this: The recruiter has more information than you at this stage. You only know what’s on the job description and what you’ve gleaned from the interview. They have knowledge of the position’s unwritten requirements, the pay range the company is willing to entertain, the vacation or sick policy and variables like stock options and benefits. Rather than announcing a salary range, stress that you’re excited about the job and your experience qualifies you for a competitive salary. Then take time to review the contract (more on this later).
Turn the Salary Expectation Question Around
Often, recruiters and hiring managers ask candidates for their salary expectations during interviews or shortly after. Be ready to deflect.
“Recruiters want to know what your salary expectations are because if your expectation is outside of their range, they’re going to pass,” Andersen said.
So what do you do?
“You can say, ‘Hey, I need some time to think about it,’ Singh said. “As soon as you give a number, you’ve anchored yourself to it and then they will use that number and, guess what, that anchor likely will be lower than you want.”
“Say, ‘If you have a range, I can let you know where I fall in that range. That would be super helpful.’”
You can also deflect the question by asking the recruiter to tell you more about the role and responsibilities, but if they’re savvy, they will likely ask you about your expectations twice.
As in, “Oh, well, we’re really formulating that around the person. So we really need to know your salary expectations,” Andersen said by example.
“So this is where I would say, ‘If you have a range, I can let you know where I fall in that range. That would be super helpful,’” she added. “Then add, ‘I’m flexible, because it really depends on the position and the opportunities for growth.’”
Get the Salary Range
Unless it’s a very small startup, the company likely has a range for the role and the recruiter should know it. In fact, in California, Maryland, Ohio, Pennsylvania and Washington, they have to disclose the range by law.
And if the recruiter says they don’t know it?
“Say, ‘No problem. I’ll send you an email follow-up. I’ll remind you of the questions, and then you can send me back that range.’ Be firm, but not aggressive. You’re getting that range,” Andersen said.
The reason the information is important is because if a company is offering you the top of its range — say $150,000 in a salary schedule from $100,000 to $150,000 — the only way to negotiate upward is to pursue a higher-level position.
Conduct Comparative Salary Research
It’s best to do your salary homework ahead of any interviews. But if an employer presents a range, you should circle back to run comparisons.
Many tech professionals undervalue their worth, especially at large companies in major market cities, such as San Francisco and New York. An infographic on Singh’s website shows that entry-level software engineers at Google and Facebook (who begin at level three on a payment scale system) earn roughly $180,000 in base salary, stock options and performance bonuses. By level five, which many software engineers hit within four years, that jumps to $355,000.
Singh recommended sites like levels.fyi, the U.S. federal government’s H1B salary database and Built In as good places to look for salary comparisons, noting that it’s important to account for regional and experience differences.
“If you’re from a geography like Austin or Orlando, you just don’t realize how much Silicon Valley companies are going to pay,” he said.
Another way to gain an edge in negotiation is by talking to professional acquaintances at the company where you’re interviewing. College alumni associations and private social-network groups can often open channels of communication to people with firsthand information.
“Here’s something people don’t realize: At Facebook and Google there are internal salary-sharing groups. You can talk to a person who works there,” Singh said. “They aren’t just an expert in their own salary, they’ve likely seen a lot of folks’ salaries.”
Prepare an Organized Argument
Carlota Zee is a former broadcast journalist who has run her own career consultancy for more than a decade. Before making a counter offer, it’s a good idea to have the contract reviewed by an attorney, career coach or trusted colleague, she told me. You should also prepare a coherent argument that outlines your achievements and justifies why you deserve a higher salary.
For example: “I brought in XYZ clients. I closed this deal. My work has brought the company these perks, these numbers,” Zee said.
The goal is to make it clear to the company that you understand your worth. “It’s very different than just saying, ‘What are the other people making?’” Zee said.
Ask for a 10- to 20-Percent Bump
Great offers don’t come around every day. When an offer sits on the high end of the market range for the role — and it’s a role you’re excited about — there is no shame in accepting it.
“Go for it. I give you permission to say ‘yes,’” Andersen said.
On the other hand, if you’ve done your research and you think you can do better, you’re on stable footing asking for a 10- to 20-percent increase in base pay, she said. Don’t give a single figure, though, because it’s an opening for the hiring partner to simply say ‘no.’
“What you want to do is say, ‘I think my target is actually closer to’ — and then give a range, say, a $150,000 to $160,000 base, and then ask a magic, open-ended question like, ‘What do you think we can do to get closer to that?’” Andersen said.
Look for Non-Salary Levers to Pull
If a company is unwilling to budge on salary, look for other avenues to make the offer more enticing. Asking about stock options, a relocation bonus, a flexible WFH schedule or a benefits package can help extend the conversation and often leads to a better deal. Because stocks are typically distributed over a period of years, they may be an area where a company on a tight budget has more flexibility.
“Employers think, ‘Hey, you might not even stay that long. So, whatever, if we bump that up to 40,000 over four years, it’s only 10,000 [the first year],’” Singh said.
But stock offers can be tricky to understand. Take time to clarify the benefits you’re actually being offered.
“They could give you restricted stock units (RSUs), they could give you a percentage, it gets confusing,” Andersen said. “So just ask the recruiter a ton of questions. Can [the recruiter] explain the vesting cycle, all those things. Anything you have a question about, ask it.”
Be Ready to Walk Away
If you’re asking for fair market value and the hiring partner says, outright, the company can’t afford you, that may be a warning sign the company is in trouble financially or disingenuous in its payment practices, Zee told me. Assuming you have the financial security to continue your job search, don’t be afraid to walk away gracefully. The application process is the honeymoon stage of the job, and if the relationship is already rocky, it’s not likely to get better.
“You absolutely have the right to be like Kenny Rogers in ‘The Gambler’ and say, ‘I’m sorry that we weren’t able to see eye to eye. You know I have tremendous respect for you and the work you do, and maybe if things change you’ll consider me.’”
Easier said than done, of course.
Tech professionals shy away from salary negotiation for all kinds of reasons, Zee said. Some are not used to talking to recruiters, who sometimes anchor them to a salary range or approach them with a time-sensitive offer before they’ve had time to assess a contract adequately. Others are afraid the first offer they receive is the only offer they’ll receive.
And, frankly, asking for more money can be scary.
“Many of us, myself included, feel like you have to justify your entire life and basically tell a stranger, ‘No, I’m a good person. I deserve this.’ It’s very frightening,” she said.
“We can help each other by trying to promote negotiation and encouraging transparency.”
Structural biases can make posing a counter offer especially intimidating for women, 68 percent of whom accept their first salary offers compared to just 52 percent of men, according to a recent Glassdoor survey.
“Women feel like they need to have 100 percent of the qualifications [to feel comfortable negotiating], while men, if they have 50 percent, they’re good to go,” Andersen said. “As women, we can help each other by trying to promote negotiation and encouraging transparency. What is the role? What is your level? And are you being compensated fairly?”
Above all, refrain from the impulse to view yourself as greedy or undeserving.
“If you go in with that mindset, you’re going to feel like you’re scamming them,” Zee said. “Absolutely not. If you’re working full time for a company, your biggest relationship in your daily life is with this company. You’re on call for this company, so you’re going to give them your best.”
Mistakes to Avoid
- Don’t be afraid to use a competing offer as a bargaining chip.
- Don’t be a jerk when asking for more money.
- Don’t believe the odds.
- Don’t ignore the recruiter’s motivations.
- Don’t present your counter offer in piecemeal requests.
- Don’t offer needs-based justifications, but understand your needs.
Don’t Be Afraid to Use a Competing Offer as a Bargaining Chip
There’s no need to reveal competing offers during negotiation. However, in some cases, a rival offer can be used as a powerful bargaining chip. (Remember what Singh said to the Facebook recruiter?)
Just make sure to keep the conversation congenial and let the company in question know it’s your frontrunner.
“Don’t do it in an ultimatum sense,” Andersen said. “Do it in a helpful way. ‘I have this other offer. You’re my top choice. If we can get closer to this number, we’re done. I don’t have to worry about [the other company] at all.’”
Don’t Be a Jerk When Asking for More Money
Duh. But here’s how you do it without seeming like a noob.
“You can say, ‘Look, I’m not happy with the money,’” Singh said. “‘But the people are awesome, the position is awesome, your vision is awesome. I love the space.’ Because that’s the only thing that keeps them at the playing table: that you actually care about them. It’s not just about a number. You’re not a mercenary.”
“You can say, ‘Look, I’m not happy with the money. But the people are awesome, the position is awesome, your vision is awesome.’”
Plus, the person on the other side of the table could one day be your coworker. You don’t want to burn bridges you haven’t even built.
Showing a willingness to express appreciation and gratitude is just as important when working with recruiters or career coaches advocating on your behalf.
“People tend to play it too cool in negotiation,” Andersen said. “And a recruiter is not going to want to go to bat for you if they feel like you’re going to say ‘no.’”
Don’t Believe the Odds
Only 10 percent of employees reported negotiating their salaries to earn more money in their current or most recent positions, according to a survey of 2,015 American adults. But that might not reflect the realities of the tech community. Stiff competition for talent and the amount of up-front expenditure needed to attract and recruit top performers makes tech companies more willing to budge, Singh told me.
“By the time Amazon or Facebook is ready to give you an offer, you’ve proven you can do the work.”
“The other interesting thing to know is assessing folks and their performance in tech is much easier than other fields,” Singh said. “Because there are coding interviews [for developers], you actually can tell how someone does. As such, by the time Amazon or Facebook is ready to give you an offer, you’ve proven you can do the work. You’re a much surer bet than, say, the average business analyst, where we really just don’t know how good they are from the interview.”
Andersen added that some large tech companies only negotiate a salary if the candidate has a competing offer, but that’s the exception rather than the rule. She estimated that more than 50 percent of students at UC Berkeley’s School of Information are successful in increasing their compensation through negotiation.
Don’t Ignore the Recruiter’s Motivations
At large tech companies, a candidate may be working with an external recruiter, an internal recruiter, an outside agency or a direct hiring manager, Andersen told me. It’s important to suss this out, as it can help determine how much leverage the recruiter has at the bargaining table — and how badly they want to close the deal.
“Early in the interview process, ask the recruiter, ‘Are you in charge of all hiring for this team?’ Where do you sit? How do you work with the hiring manager? Do you have any tips to work with the hiring manager?’” Andersen said. “Generally speaking, the recruiters want to help you because if they get you to say ‘yes,’ that’s one requisition off their plate.”
Don’t Present Your Counter Offer in Piecemeal Requests
It’s best to present several elements of the counter offer request together — base salary, stock options, et cetera — with the caveat that you have flexibility in how the request is allocated.
“You don’t want to do that thing where you say, ‘Can I have $10,000 more on base comp? Now I want $20,000 more in stock.’ If you go back and forth with a million questions, that’s going to be annoying,” Andersen said.
Don’t Offer Needs-Based Justifications, but Understand Your Needs
The problem with justifying your salary requirements based on personal expenses — childcare costs, a mortgage, school debt or transportation fees — is that the hiring manager with whom you’re interviewing doesn’t always share these concerns, Andersen said.
“Honestly, with needs-based justifications, a lot of times people don’t understand those needs if they don’t also have those needs,” Andersen said. “This harms women, because women can say, ‘I have this childcare need.’ The company might not care.”
Andersen acknowledged, however, that this advice is controversial and employer attitudes — particularly among progressive companies — are changing.
Zee, who has seen clients present needs-based justifications successfully, said you need to look out for yourself because a company won’t make you rich if they don’t have to. Sometimes the best strategy is to read the room. If you feel you have a sympathetic ear, you can be more candid about your living expenses.
“At the end of the day, if the salary is not going to pay the bills, I think you’re going to have to say that to them, ‘Look, if I’m important to you, you need to meet me half way,’” Zee said.
“Because you just can’t agree to something and six months later go into your boss’s office and say, ‘I can’t pay my mortgage,’” she continued. “She’s going to look at you and say, ‘Why did you sign the contract?’ You’re going into this because it’s going to fulfill your emotional and intellectual needs, but also, you need to eat,” Zee said.