Data-driven Salary Negotiation

Tara Ojo: [0:00] Thanks so much to team at egghead.io for having me here to speak today. I'm going to be talking about a topic I'm especially interested in, and that's money. You probably know that, when you're at the negotiation stage for either a new job or internal salary change, most companies reduce their offer with the expectation that you will negotiate.

[0:24] That means, if you don't negotiate, they save money, and you lose out. This has been the way things have worked for so long, partly because talking about money and personal salaries can be a bit awkward. Understanding salaries and how they're decided can be confusing. When you take away the ambiguity by focusing on the data available, it can make your life so much easier.

[0:50] When it comes to salary negotiation, we should be researching, planning and being as prepared as possible when the negotiation conversation happens, so that we get the maximum number possible too.

[1:05] Before I dig into the details, let me tell you a little about who I am. My name is Tara Ojo. I am based in the UK in London, and I'm a software engineer. I like to teach. I've taught at coding boot camps and run some workshops too. I also write blog posts and speak on written technology through my experiences in tech.

[1:29] I've been in this type of role for about six years. I've worked across a few different industries, including retail, journalism, education. I found that switching between different industries like these has definitely taught me more about the different factors that can affect the amount of money a company's willing to give you.

[1:52] Industry is definitely one of those factors. For example, those in Fintech earn substantially more than those working on ecommerce sites, for example. Also, your specific role is a factor in some companies. PHP developers can have different salary expectations to JavaScript developers. The list could go on.

[2:13] Your location will have an impact. How much experience you have will have an impact and also your external influence, which not many people mention. If you're good at networking, and you're visible to the wider tech community, that can have an impact too.

[2:31] There's a lot to think about. I remember when I had just finished my grad scheme, I did so much research into all of these factors when I applied for a new role internally. I did the interviews. I got an offer which was great. That was my cue to start negotiating.

[2:50] Following my research, I decided on a number to ask for. Then added extra on top of that, because what the research told me that that's what I should do. I booked a meeting with the tech director at the time to talk about my offer in person.

[3:05] Honestly, I could not sleep the night before, because I was replaying how this conversation was going to go in my head over and over again. This was the first time I'd ever done any type of negotiation. I was sweating [laughs] but trying to keep calm. Essentially, I pulled out the data because I had it printed out.

[3:25] I said something like, "Thank you for your offer. I've done intensive research, gathered feedback, and I should actually be on 40 something." I set that research doc across the desk. He closed the cover. Then he accepted it just like that. He said, "I like that you brought me the data. I'll make that happen."

[3:46] I walked out of his office very happy with a 28.6 percent pay increase. Imagine what that could do to your salary now. I was pretty shocked. The key steps here were the salary research that went into it beforehand, doing some personal benchmarking of my own skills, and then going into that negotiation conversation. That is what I'll be sharing for the remainder of my time with you today.

[4:18] Before you even get to the point of being asked what your salary expectations are, it's a good idea to research the average salary for your type of role. Nowadays, there are lots of online tools and websites out there for comparing salaries. I've personally used tools like PayScale, Hired and Glassdoor. They'll have slightly different options. You just check out a few different ones.

[4:43] Let's look more at PayScale. It has a few different sections that you can fill in to give more accurate results. I filled this in for a software engineer that's been in the business for about three years based in London, and the kind of skills were JavaScript, that full stack. Let's say this person is self-taught, so no degree. What does that give us?

[5:07] When we look at the market range, PayScale says that the range for someone like this is from 33 to 72. The section underneath is to do with bonuses. They're saying that on average, the bonus will be about 4k, which gives us a good starting point.

[5:25] I'll continue with PayScale, taking into account at 33 to 72. Usually, I would cross-reference these numbers with other tools like Hired and Glassdoor, just to see how consistent they are and what the differences are.

[5:43] Taking this range, we wouldn't aim for below average to be honest. I would change my minimum to become 47, unless my current salary is already above the average. Let's say it is. Let's say my current salary is 49. Now, I'd be thinking about salaries between the range of 49 and 72.

[6:07] For a good salary increase option, we still want to reduce this range a little bit because it's quite large. We want to get more specific into the type of company and industry that we'd be working in. If I was at the point where I'd be looking for internal pay increase, this is where I'd turn to colleagues and friends. Disclaimer, that can be a little bit awkward, but it's OK.

[6:34] We need to normalize talking about salary at work. It drives fairness in a more inclusive working environment. I only ask those I have good working relationships with as in the people I trust. I generally ask them, "Would you be interested in sharing your salary information with me, I'll share mine too? It's so I can get a better idea of the kind of salaries that this company offers."

[7:00] I would ask more senior colleagues and those at my level too, and that way, I can get a better idea of what to strive for. Let's say two of the peers that you've asked similar skill level to you are earning in the 50s, so 55 and 52. You've spoken to a junior engineer. They say that they're earning 38. Your tech lead has said they're on 67.

[7:28] This already changes the salary range that you could be asking for. Let's go back to our range. Let's up that to 50. Since I know that my peers are in this area, we could potentially knock down the other ends down to 67 as that's where the tech lead is at. I like to keep things open. We'll leave that aside for now.

[7:50] If you're negotiating a new job offer externally though, it's hard to get this insight. You could try reaching out to people within that company via social media. I have not tried that myself. That's it for salary research. Let's talk about personal benchmarking.

[8:13] Once you have your starting range, you want to figure out where you personally fit in that range. Would you be on the lower end because you're new to the technology that you're using, or you're on the upper end because you're excelling in every area? Let's figure this out by looking at engineering progression frameworks.

[8:31] An engineering progression framework is a document of some format that details the type of skills and expectations that engineers should have at each level of seniority. All the companies actually that I've worked at have had some variation of it, or they've been in the process of creating their own. It's tailored to what they expect from the developers in that company.

[8:56] With that said, there are a lot of similarities between them, which is why it's interesting to also review the public ones. The public ones that I know of which are good are, FT, Wonder, Farewill and Medium. There are a lot more, while most companies will have a variation, if they don't, definitely check these ones out. There's also a website called progression.fyi.

[9:26] That is a site that lists in lots of other public progression frameworks all on the same website. You can compare from different companies too. Definitely check that one out. Let's go through part of the engineering progression framework for Medium. They have a track called Web Client, which is right on my screen.

[9:49] I would start at the most senior level on the track and work my way through. When I hit a stage where I have a comfortable amount of personal examples, I stop there as it means that I've probably already covered one of the other levels. If you find this exercise difficult, it can help to talk to your colleagues and get their feedback on your work.

[10:09] Let's think of this whole process as writing up a business case for a pay rise. Let's say that...This one's quite senior. We don't have any examples that yet.

[10:20] The next one, that's also quite senior. We don't have examples for that one. Let's go down to level three, that one we do have examples for. I'll make sure I have a note of all of the examples that matches that level. Then I'll go through this process for all of the other tracks in the framework to get an average level across the board.

[10:47] One thing I also do is make sure to think about external activities too. Those aren't always included in frameworks like these, but I found it can carry extra weight when it comes to salary. It's great advertising for the company that you work for, especially for hiring. When you're out speaking at Tech conferences, you're showcasing what you do to potential future hires.

[11:10] I've seen that work first-hand. That work can be rewarded too. I find having all of this written down, is a clear idea of the progress I've made in the last, let's say 6 to 12 months and a bigger motivator for deserving a pay rise. If you use Trello to keep track of these, but now I've made it easier to keep track with a simple Google Doc.

[11:35] Looking at these examples, I feel pretty confident in my ability to increase the range a little to match that of my colleagues. Where we were at 50 before, let's add that a little bit. We have lots of information. We have lots of data that we can use to plan for that actual negotiation conversation.

[11:58] Let's look at that. Usually, after passing your interview stages, you'll get an offer or some indication that it's time to negotiate. Since at this point, we have looked at lots of data to understand how much we're worth, we can go into this conversation ready and prepared. The final thing is to have a plan for all of the different scenarios. Let's look at those.

[12:23] The first scenario is that you're really happy with the offer and you would take it. The second one is that it's a little bit below your preferred number. If they're not willing to move, you would also accept that offer too. The third scenario is that it's too low for you to accept, and you would walk away.

[12:43] All of these scenarios have the expectation of the employer coming in with the first offer. Do your best to avoid coming in with an offer first. I have made that mistake myself. [laughs] I definitely regret it. I'm never going to know if they were willing to come in higher had I not said anything at all.

[13:03] Let's put some numbers to these. The first scenario, let's say that anything above 57 is a, "Yes, I will absolutely take it." Anything in scenario two, we will say that 53 to 57, we want to push to increase any offers in there. If they give us an offer below 53, that's a little too low for us. We wouldn't accept it.

[13:29] It's important to have these values in your mind beforehand, so we're not making these decisions in the heat of the moment. You should know exactly what the lowest number you will accept is and be ready to walk away if that number is not met.

[13:42] If you are happy with the first figure they give you, let's say scenario one, they offer you 60k, you can still negotiate as companies usually leave room for that. There's probably more money on the table. Though, if you're in scenarios two or three, that's where we want to go in with the data and negotiate hard. Let's go back to the range from our research.

[14:05] Let's say this time they offer 53k, we want to provide a counter offer leaving room for them to negotiate down. Explain that you've done the research, and you know what your skills are worth. Let's say you ask for 58k instead, going for a value that sits within your best-case scenario. You can even share the data with them if you feel it would be of benefit.

[14:32] You'll eventually get to a number that they will not want to move on. Then, it's up to you to check your scenarios again, and decide whether you're happy to accept it or not. Good luck.

[14:45] Hopefully, you've got some ideas for tackling your salary negotiation discussions and doing that with data. I always come back to this especially with internal promotions and pay rises. Being able to hand that data over to my manager is always a little surprising for them, but also makes their job of writing the business case much easier.

[15:06] Before I go, remember to research salaries, benchmark your personal skills across industry standards, and prepare for that negotiation conversation with the decision makers. I myself am still learning about this process. I've already heard about lots of other things that I'll try in the future.

[15:25] I'd love to hear your tips too. Feel free to share them with me. You can find me on most of the socials Instagram, Twitter, or LinkedIn. That's it. Thank you so much for tuning in.