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Welcome back to another issue of Paid in Full. Today we are talking all things compensation and negotiation so you can maximize your compensation for your full-time job.
In July 2019, I set up a meeting with my boss and the HR manager to talk about my pay. My goal was to get a 5% increase on my salary (because that's what Google told me was reasonable). A day before my meeting, I spoke with a colleague who had started on the exact same day as me. He told me he was going to ask for a 50% increase in base salary and stocks in the company. I felt like an idiot!
Negotiating your compensation can be pretty daunting - especially when you are desperately in need of a new role. But leaving money on the table will end up hurting you in the long run. The higher your compensation when coming into a new role, the higher it will go each time you get a promotion or raise. If you are already working in a role and would like to negotiate for more compensation, this issue will be relevant for you too. Here's the guiding principle as we get started:
You don't have because you don't ask
Most people have an idea of what they are worth and what they would like to make. The struggle is building up the courage to actually make the ask. There is often a lot of fear associated with asking for more money. What if we get rejected? What if the company sees you as greedy? What if they withdraw the offer or fire me? These are all reasonable thoughts to have. Just remember that anything you want, you need to ask for. Companies will rarely offer you more money. It's up to you to fight for what you want and to justify it to your company. Never be afraid to ask. Usually the worst case is that they say "no".
What's on the table?
When it comes to negotiating for your true value, doing it alone will likely hurt your chances of getting the result you actually deserve. Many years ago, companies convinced us that talking about our salaries was a massive taboo. This secrecy allowed them to pay employees less and created the perfect environment for pay inequity. We are in 2023! Talking about your salary and compensation (especially anonymously) is becoming the norm. The more data and the more insight you have into what other people are making, the more leverage you will have when you negotiate. By talking to my colleague back in 2019, I was able to get a 20% pay increase instead of the 5% I wanted to ask for. Most people only negotiate their base pay, but that's only the beginning. Here's breakdown of different compensation levers you can negotiate for:
This is the most obvious aspect of compensation and probably the most important. Getting the highest possible base salary matters because this comes bi-weekly as guaranteed income. It's also what banks and institutions look at when qualifying you for loans and mortgages. The difference between $60,000 and $70,000 can be pretty massive when you consider the kind of home you qualify for and can comfortably afford. You want to make sure that you get the maximum possible amount in this area.
Some companies are willing to pay you a bonus just to accept the offer and make the move. If you use tools like Blind, you can actually get insight into how much a company is willing to offer as a sign-on bonus for the job level you are coming in for. You can even get outside perspective from other professionals so you make the best decision for you. The highest bonus I've ever seen someone get is $50,000 USD upon joining the company. This might sound rare but I've come across multiple cases where $10,000 - $30,000 was offered upon signing. Until last year, I didn't even know it was possible from non-software engineers. If accepting a new role means giving up stocks in your current company, you can ask your new company for a signing bonus to make up for the shares you are leaving on the table when you move.
Stipends and Allowances
Stipends can be allocated towards expenses and can help increase your net income as a result. Your phone bill, internet bill, lunches and even rent can be directly covered by your company as part of your negotiation package. This might not seem like the most exciting lever to negotiate with but just remember that the more money you can keep, the better off you will be. By spending less of your post tax money on bills and other expenses, you get to have more disposable income. Next time you are in the negotiation stages, ask if there are allowances for expenses like these.
Many startups and technology companies give you the chance to purchase employee stock options or Restricted Stock Units (RSUs). These essentially allow you to purchase equity in the company at a heavily discounted rate. If a company is pre-IPO, meaning that they are still privately held, you might be able to receive stock options as part of your compensation package. If they are already public or later stage, they might grant you RSUs. Both of these are usually negotiable. As the value of the overall company increases, so does the value of your stocks. But you will likely need to wait a year or more to start truly reaping the benefits. For instance, some employees were able to purchase stock options in companies like Shopify for less than $1 and many of them were able to retire as soon as the Shopify stock hit $100. Others were granted RSUs at $100 and cashed in when Shopify stocks reached an all time high of $1,762 in 2021. This is a pretty special case of course, but even if you do the math on a stock going from $0.10 to $5, you will see why this is worth adding to your compensation package when available.
Not sure where to start gathering information from regarding compensation? Platforms like Blind, Fishbowl, Levels.fyi and Payscale give you the insight you need to be able to negotiate from a place of strength. The one I want to highlight is:
This app is the cheat code for getting access to a community of people who are transparent about everything career related – including compensation. You can get advice from current employees at the companies you're exploring and understand the intricate details of the compensation package. Maybe you have never asked for a sign-on bonus but someone at the company says you can get up to $20,000 as a bonus plus an additional $10,000 in moving costs if you need to relocate. Now you know what to ask for and where to start.
Don't leave money on the table. Go into your negotiation conversations with as much information as possible so you can get the most out of it.
Recommendation of the week:
Join one of the platforms
Most of these platforms are free! I encourage you to create a new account with Blind, Fishbowl, Levels.fyi or any of the others you come across. Start researching what your favourite companies and roles pay. It's fine if you're not in the middle of a negotiation at the moment. As long as you have access to these tools, you will be prepared whenever the time comes.
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P.s. I still have a few invites for my Breakfast Club event happening on June 1 at 8.30am EST in Toronto at the DMZ. If you will be in the city and would like to join, you can RSVP HERE. I'd love to meet you!