The Dreaded “What’s Your Expected Compensation?” Question
First Negotiation Round
Yes, there are at least two rounds of salary negotiations: during the initial interview process and when the offer is made. Take advantage of both, as they have different goals.
- First round during the initial interview stage: Ensure you make the cutoff based on salary range while asking for as much as possible.
- Second round when the offer is made: Ask for even more now that they got to know you and like you enough to make an offer.
Recruiters usually handle the first round, and they don’t really care about your salary. Their main focus is to make sure you meet certain requirements, one of which is being within a specific salary range. Your job is to find that range and aim for the top end of it.
Key Points to Remember
- No one will reject you for asking for more money than they are willing to pay. They will simply counter with their current rate and ask if you are okay with that.
- “What are your salary expectations?” is a question that gives you an advantage. Your only job is to give them a number that’s higher than they expect to pay, but not ridiculously high.
- Your mindset should be - if they don’t say “uh our rate is actually less” then you didn’t ask for enough. Always ask for more.
- Position your salary demands as “I’m currently getting
<what you're asking for>and I’d like to stay in that area”. - Let them know you are open to negotiations.
How to Negotiate Salary Offer Example
Assuming the going rate in your area is 130-140K for your type of role:
Interviewer: What’s your expected compensation?
You: Well, currently I’m getting 170K where I work and I’d like to stay in that area. That said, to me an interesting job takes precedence over a few thousand here and there, so I definitely don’t want the number to stand in the way of us talking. Plus, some of the benefits could be as good as cash in hand.
Interviewer: Right, so the maximum we’re ready to pay for this role is 145K, would that work for you? For benefits we offer 4 weeks of vacation, 5% RRSP match, etc.
You: Sure, that sounds great!
I use their question to get the information I need - what are they ready to pay and what are the benefits like. I’ve interviewed over 50 times in the last ~18 months, and not a single time has the interviewer ended the conversation based on the number I give them.
Second Negotiation Round: How to Increase Your Offer
Congratulations on receiving a job offer! Now, let’s work on increasing that number. Always ask for a day or two to think about the offer. Never agree on the spot, as they don’t expect you to. Keep in mind that they’ve just gone through an exhausting interview process and chose you. They want you, so they won’t shut you out immediately if you approach the matter respectfully and politely. The worst they’ll say is “that’s the max we can afford”. Here’s an example of how to approach this:
How to Negotiate a Higher Offer
“I’ve received a job offer from another company for <what your offer says +10% or +10K, whichever is higher>. The thing is, I would really prefer to work for you - the job sounds a lot more interesting, and I think we’re a better fit. Do you think there’s some wiggle room for the compensation?”. Be prepared to answer the question of “what company is that” (just name a company that exists but doesn’t sound exciting, like AT&T or Bank of America, or even better, one of their competitors). This approach has helped several people, including myself, get a higher offer after the initial offer was made.
Handling Questions about the Other Offer Letter
If they ask you to show the offer letter from the other company, consider the following advice:
Many FAANG-type companies consider their offer letters confidential and ask you not to share them. You can use this to deflect the question. It may not get them to match the offer, but it won’t make you look like you were bluffing. Many companies also won’t give you the letter until you verbally accept because they don’t want you to shop it around, so not having a letter isn’t an indicator of dishonesty. Try to get the company to confirm the numbers via email, though some may call you back to confirm. I’ve never provided an offer letter and it has never been an issue (for FAANG as well).
Bonus Round 1: Never Settle for Less Than Market Average
Don’t Take Less Money Than the Market Average
If the average rate for your role is 100K and you’re being offered 70K (looking at you, gaming industry), don’t accept it. Turn them down and make sure they understand that their salary is designed to fish at the bottom of the barrel, and that’s not where you belong.
- Gaming industry: Don’t accept lower pay just because it’s gaming and you’re “basically getting paid for playing games”.
- Companies with extra perks: Don’t accept lower pay because they have a ping pong table or other perks that don’t really compensate for lower salary.
- Oil and gas industry: Don’t accept lower pay because the industry is facing tough times. If anything, your rate should be at least 30% more than the market average.
These are all real examples from my experience.
But What If I Need Money to Pay Rent and Eat?
If you desperately need a job to support yourself or your family, it’s understandable that you might accept a lower offer. In that case, take the job, get paid, and keep looking for a better job as if you don’t have one. When you find a better offer and leave the current job, make sure they know that you’re leaving because the pay is below average. They might try to guilt you, but be honest - you needed money, and they knew you wanted more. They should pay more if they want to retain talent.
True Story
In March, I was offered a 110K job but wanted 140K, so I turned it down. In July, I started a job for 150K. By the end of January, I will have made the same amount of money as if I started in March, but I also got 3 extra months off.
Bonus Round 2: Beware of the “Excellent Career Opportunity” Trap
If they offer you less money than the average but dangle “excellent career opportunity” in front of you, be cautious. Generally, this means that even with a promotion, you’ll still be getting less money than the average for that role. Nobody but you can determine whether the opportunity is worth the pay cut, but don’t think that with promotion will come the big bucks. Most likely, they’ll give you a title, more responsibilities, and only a small salary increase. Having that promotion on your resume is great, but do the math. If you’re getting 20-30K below average annually, that adds up to 60-90K in three years. Is it worth it? Only you can decide, but understand that this is real money you’re paying to get that promotion (if they give it to you).
Bonus Round 3: When It’s Okay to Get Paid Less
Example 1: Time Off
Sometimes it’s acceptable to get paid less. One major example is time off. At my previous company, when I got a job offer from another place, I went to my boss and said, “I’m being offered 25% more than you’re paying me. I’d like to stay here, and I know you can’t increase my salary as much as this, but I was wondering if we could arrange an unlimited vacation situation for me. I want the freedom to work from where I want, when I want, as long as my projects don’t complain about me.” I got my unlimited vacation, and I used it to my advantage. Your time is your most valuable commodity, so don’t sell it for cheap. In this example, I consider myself as “getting paid more” because I took 6-8 months of time off in the next 3 years.
Example 2: Passionate About the Industry
Another example could be an industry that you’re passionate about and isn’t famous for having lots of money. Maybe it’s a company that works on green initiatives or a non-profit that helps feed people in Africa. If you want the job and can afford the pay cut, take it. There’s nothing like knowing you’re helping people.
Bonus Round for Hiring Managers: Normalize Fair Salaries
As a hiring manager, normalize telling people when they ask for less than you’re prepared to pay. These aren’t your money. Your VP or CEO isn’t going to reward you just because you save them 5-20K a year. Your team is ultimately your boss. If they lose trust in you, that’s game over. The easiest way to get them on your side is to be upfront - “Joe, you asked for 80K, but the average wage for this role is 100k, so we’d like to offer you 100K.”
For you, it’s just a number. For them, it might be the difference between being able to put their parents in a nice hospice or needing their spouse to quit work to take care of them. In other words, 20K per year for a company is spare change. For a person, it can change their life. Don’t be insensitive. Be a person who changes people’s lives for the better.
It took me some time to get to these tips, and I hope they can help some of you make more money. I’ve helped multiple acquaintances and myself negotiate their salaries using this. Go get paid. Fight the status quo.