On March 18th we joined together to brainstorm and share experiences related to financial negotiations in the professional context. The discussion was moderated and kicked off with an informal presentation by Riva Nathans, Senior Software Engineer. Riva shared with us the result of her own research on the topic, and some of the mechanisms she’s observed in the market.
The following notes are a result of a discussion among a dozen of CyberMagnolia members. It’s our hope that they will provide tips to those looking for specifics, and an inspiration to overcome the fear of negotiating to those who usually shy away from it.
Reframe The Mindset
Money-related discussions are emotionally loaded for most people. We frequently have mixed feelings on the topic which result from the social narratives we’ve been subjected to since childhood. These are the things we can do to try and change our inner narratives about money:
Acknowledge The Narratives
Think back to how your family of origin approached the topic of money. Did your parents share their own salary or raise discussions from work? Did they make any types of statements about the importance of money? If so, do a bit of introspection and see if the attitudes of adults from your past affect your own relationship with the money.
Appreciate The Role Of Money
Treating salary like pocket money that we receive at our employer’s whim happens to more women than we’d like to admit. Very few of us think of ourselves as the providers. This doesn’t seem to be rooted in reality though—casual chats quickly reveal how many women have at some point used their money to support an unemployed spouse, their parents or even elderly grandparents, not to mention their children.
Owning the role of the provider and a financially independent person helps change perspective. Making your negotiation process about your ability to support your loved ones is a powerful way to strengthen your own resolve when it gets stressful.
Focus On Data
A good way to help detach from the emotions and focus on facts in any finance-related discussion is using data. Understand what are the current rates for your type of role in the market you work in. Do solid research (we’ll talk about it in the next step) and treat this discussion as any other merit-based professional conversation that you prepare for.
Accept The Process
There’s an important point you need to acknowledge—negotiating salary is a part of the process of finding a new job or raising to the next level in your current organization. There is an asymmetry of information in the professional context because your employer knows its own budget and salaries of everyone employed at the company, but you usually don’t. In that situation the company is benefiting from the lack of transparency and if they wouldn’t want salary negotiations to be a part of the process, they’d introduce some level to transparency (e.g. by providing official salary ranges.)
Do The Research
Figuring out the value of your work compared to the current market situation is a necessary starting point. Here’s how to make sure you get the most correct data:
Publicly Available Sources
Looking for the latest compensation surveys for your market is a good start. Those are frequently released by employment agencies and both Hays and Reed have released their salary guides for Czech markets for 2021. Since these usually have very low granularity, wide ranges, and unknown samples and methodologies (e.g. what was the participant selection process like, which companies did the participants work for, etc) they should be treated with a grain of salt.
Many people still use Glassdoor as a source of data but not only its records aren’t representative of real salaries (when was the last time you or your friends posted your salary there?), but it doesn’t distinguish between recent and old data points. While it makes sense to have a look at it, don’t take those results at the face value.
We also found Levels.FYI to be a good source to understand different levels and compensation at large companies (unfortunately currently all the data comes from the US), and r/cscareerquestionsEU subreddit threads where people share their salary info for 2021.
The best way to get an accurate understanding of the market rates is by using your own network. While it may not be socially acceptable to ask your colleagues and friends how much they earn, it’s relatively low-pressure to approach a couple of people and ask them “How much should I be earning in your opinion?”. If you select people who are in a position to objectively evaluate the quality of your work, they will be able to provide estimates to the best of their knowledge of the market.
Make sure to reach out to people who are as close to your own situation as possible. It can be a friend who already works in the company you’re interviewing for, a more senior person in the same industry and job role as you, or a colleague from your own company if you’re looking to negotiate a raise. Ask a couple of different people to get a better overview of the estimates.
Talk The Numbers
There are certain points at which you can expect the salary question to pop up. In the Czech market it is commonplace for recruiters to ask for the salary range already in the screening conversation, before you even talk to the team. Be prepared for this moment.
Impact Of Negotiation On The Work Relationships
Bear in mind that the process of negotiation may affect the quality of the relationship with your future managers. Literature describes a phenomenon known as “the social cost of negotiating”—it’s important to know how to phrase the discussion to appear less combative. Make sure to watch Margaret Neale’s (Stanford Graduate School of Business) video about framing negotiation as a problem-solving exercise with the focus on benefits to your counterparts, team, or organization.
One thing to keep in mind—don’t let this issue get in the way of negotiating your salary. US research shows that giving up on negotiation can cost Americans 1 million dollars over the span of their career. Now, a million dollars is a good motivation to overcome the negotiation stress, isn’t it?
When Does It Make Sense To Talk About Numbers
The answer to that question is, unfortunately, “It depends.” While a bulk of negotiation advice states it’s a mistake to reveal your numbers first, there’s some merit to using the “anchoring” technique. Make sure to filter any advice on this topic through the cultural lens—US culture tends to be more accepting of aggressive negotiation, while many European cultures leave little room for it.
If you’re a career changer or for any other reason your CV may be less impressive than your full skillset, then it really makes sense to leave this conversation for the end. Your strong performance in the interview will allow you to present yourself as a solid candidate.
It’s fair to explain that you’d like to fully understand the range of responsibilities and the details of the job before estimating your salary for that particular role. If the person asking for the financial expectations keeps pushing, you can counter by asking “Are you able to share the salary ranges that you have for that position with me?” At that point most people agree to discuss the numbers after the interview round.
Ranges Versus Single Data Point
It appears that providing a range of numbers may be better for the financial outcome as well as the relationship with the other party. It gives an impression of more flexibility and goodwill in the process. Most employers will avoid going below the lowest number (because it’s understood that it’s a no-go for you) and try to hit the middle range.
It makes sense to set the lower bound of the range to a number that you would be happy to accept, and set the upper bound either at 10-20% higher, or if you’re feeling confident in the particular negotiation even a bit more. It seems there’s a lower relationship penalty for setting a more aspirational upper bound as long as the lower bound is reasonable.
Make Sure You Always Have An Alternative
In addition to having solid research to back up your ask, it’s necessary to evaluate your alternative options to establish what’s known as BATNA—Best Alternative To Negotiated Agreement. To put it simply, you need to know what are your options if the negotiation fails. Can you simply stay in the current job and keep looking around? Is there a different offer that you’re reviewing? Knowing that you’ve got options takes the edge off any particular negotiation, and helps you feel more confident about your expectations.
Other Elements Of The Compensation
In most cases change of the job isn’t just about salary, but about the chance to do new and exciting work. If you’re able to be flexible on the money, make sure to discuss other elements of your compensation. Those can include learning budgets (to cover courses, conference attendance, books, etc), extra vacation days, parental benefits, private health care. If any of those are important to you, it makes sense to discuss those benefits during the negotiation phase.
If the offer you’re reviewing comes from a publicly traded company or a startup, it makes sense to discuss stock as part of your compensation package. It’s particularly important to understand vesting cliffs and schedules.
Accepting A Counteroffer
It may happen that when you hand in your resignation your current employer will come back to you with a counteroffer—a promise to raise your salary to keep you in the team. Make sure to think it through before accepting the counter. While everyone’s circumstances differ, the potential relief caused by the thought that you won’t have to go through the stress of changing workplaces frequently isn’t worth it. The original issues that made you decide to job hunt will not be auto resolved, and there may be some negative feelings on both sides.
Finding A Job That Values Your Full Skillset
If you receive a job offer with a salary far below what you feel is fair, and the employer isn’t willing to meet your numbers, it’s perfectly fine to walk away from the offer. It may happen that your skillset is not the right fit for their role, or they are looking for just a fraction of what you can bring to the new team. In that case you will usually be much happier finding a role in which all or the majority of your skills will be an asset to your next employer. This way you won’t risk feeling undervalued and tempted to search for another job in just a few months.
To Sum It Up
Financial negotiations are stressful to most people. It is, however, a skill that can be improved with practice. If you ever feel like it’s just easier to accept whatever the employer offers without thinking it through, remember that every increase makes a lot of difference over your whole lifetime—not just to you, but also your loved ones.
CyberMagnolia is a growing women’s tech collective in the Czech Republic. Our community goes beyond the borders of programming languages, tech stacks or job descriptions. We’re there for each other creating a space in which every member feels confident asking hard questions, seeking advice, and offering to share their knowledge and experience. If you’re one of us — come and join us!