Everything you need to know about negotiating tech offers
Learn from expert compensation negotiator Josh Doody
One of the most frequently asked questions we receive from the next play community (of now 50,000+ people!) is something along the lines of: “How do I best negotiate the job offer I just received?”
It’s a good question to be asking - acing the negotiation process is one of the highest leverage ways you could possibly spend your time. The upside is potentially life-changing - meaningfully more compensation (equity, cash, title). The downside is typically limited to something like a few hours worth of additional work.
But maximizing your likelihood of successfully negotiating is not particularly straightforward. Startup job offers can be confusing; there is a lot of ambiguity to sift through (job description, equity compensation, benefits) and most people only really go through the process a few times in their lives - it’s quite easy to make mistakes.
And that’s why people turn to Josh Doody.
Josh, who would never say this about himself because he is far too humble, is perhaps the single most knowledgeable person on earth when it comes to all things compensation negotiation.
He’s a Salary Negotiation Coach. On average, people he works with improve their first-year compensation by $47,273. Beyond helping you make sure you are not leaving any money on the table, he also teaches clients everything he knows about compensation and negotiation.
Josh has hundreds of testimonials you could read in detail here but TL;DR we think he’s the best at what he does. If _everyone_ in the next play community could work with Josh, we think people would be a whole lot happier :).
The issue is that there’s only one Josh.
And so, in hopes of spreading his learnings whilst reducing the bottleneck on his time, we have tried to work out the following:
We asked him all the questions we could think of and turned them into an informational interview, which you can read through the remainder of this article. His advice should be useful for people with active job offers, but also people just wanting to level up their knowledge. We hope you enjoy!
We worked with him to see if there’d be a way for him to work with some of the next play community at some sort of discounted rate. We think there’s a solution here – one that’ll work well for anyone actively negotiating a job offer (maybe you just received or are about to receive an offer) or for people who just want to level up their skills. If you would like to explore working with Josh, you can fill out this form and he will follow up with you directly.
As always, if you have any questions please feel free to email us - hi@nextplay.so - hope you enjoy and talk soon! (And if you’re thinking about what’s next, be sure to check out some of our other essays)
Hey Josh - to start, could you tell us a bit about your background.
I studied Computer & Electrical Engineering as an undergrad, and later went back for my MBA—all at University of Florida. I started my career as an Electrical Engineer at a big DoD firm, but wasn’t happy at all and decided to switch to a more business-focused, client-facing career, which I began as a sort of jack of all trades in Client Services for a small SaaS HR IT software company.
While working there, I began consulting and managing projects. Most of those projects were SMB and Enterprise software implementations for HR departments who used our software to help manage annual reviews, employee goal setting, succession planning and, most importantly, compensation planning. So I ended up consulting with companies on how to use our software to plan and implement their compensation function.
Eventually, after feeling like I had left some money on the table by just accepting the initial offer at my first few jobs, I tried negotiating a job offer and got a pretty good result. Then I did it again at my next job and got another good result. Along the way I helped build a 25-person team and became a hiring manager for a small team of extremely productive IT workers. So I suddenly found myself with an extremely well-rounded understanding of how companies pay people and how to negotiate job offers.
Friends and family were aware of my unusual career choices and even that I had negotiated more money a couple of times, so they would reach out occasionally for career or negotiation advice, which I loved providing. After so many fun conversations about those things, I decided to write a book on career management as a passion project. That book eventually became Fearless Salary Negotiation: A step-by-step guide to getting paid what you’re worth.
When I published the book, I had no intention of building a business around it. I was actually building a SaaS at the time, and I figured I would just use the income from book sales to pay my bills while I built out the SaaS. I immediately realized that was silly—to sell enough copies of the book to pay my bills, I would have to build a business around it, and that meant I was trying to build two businesses at the same time.
So I had to choose: The salary negotiation business, or the SaaS? I chose the salary negotiation business because I really enjoyed helping people in that way, and it was extremely rewarding to help people earn more money. So I shuttered the SaaS and went all-in on the salary negotiation business.
About six months later, a strange thing started happening: People who had already read my book started reaching out and asking if I could be hired to help them with their own negotiation. I thought that was weird (why not just read the book?), but figured I might as well give it a shot. Eventually, I asked someone why they hired me even though they had my book, and they said, “Because I just want you to tell me what I should do.”
A lightbulb went off, and I immediately doubled down on coaching and I haven’t looked back since.
How has the tech industry evolved since you have been a part of it? How has the job market changed? What are some of the biggest differences?
I started my business almost over nine years ago, so the industry has gone through some pretty big shifts in that time. When I started, there was pretty much a bottomless need for software engineers, and that need kept growing until just a couple years ago. That’s when two things happened: Money stopped being free, and AI started becoming ubiquitous.
So the demand for software engineers drove a lot of the overall salary increases in tech, and then things sort of plateaued a couple years ago in late 2022. Since then, it feels very much like most companies have leaned down a little bit, and are now in a “wait and see” mode. Meanwhile, AI is definitely affecting software engineering productivity, which is another source of uncertainty in the industry.
The biggest difference I’ve seen in the job market over the past couple of years or so is that there are just fewer jobs and fewer offers going out while there are a lot more people looking for jobs. So the interview and selection processes are far more competitive than they were a couple years ago.
What is your number one piece of advice for someone who just received a job offer and has never negotiated before?
Negotiate your job offer.
This seems sort of trite, but the most likely response to that statement starts with, “But what if…”
And it almost never matters what comes after that. The answer is, “Doesn’t matter. Negotiate it.”
It’s way too low? Negotiate it using an approach that is appropriate for “lowball” situations.
It’s already at your minimum number or “good enough?” Negotiate it—maybe it can be better.
It’s quite a bit above what you were hoping for? Negotiate it. You probably underestimated the value you bring to this role, and the best way to figure out how much you underestimated your value is to negotiate it.
Negotiate it.
What’s the biggest increase you’ve ever seen in an offer due to negotiation? What went right in that situation?
Well, the accurate answer is “more than a million dollars in additional equity from a big tech company”, but I’m not sure how instructive that is. The things that went right are unique to that situation: this client was a unicorn PhD in a nascent, in-demand field and he was literally one of maybe 5-10 people in the world who could do what he did. Obviously, we had to capitalize on all of his unique attributes and how well they aligned with the particular role we were negotiating for, but there isn’t much from that engagement that most people could use to negotiate their job offers.
In general, the things that go right for big results are that the client has a unique alignment with the role we’re negotiating, the client can clearly articulate the value they bring to that role and how that value will translate into real benefits for the company or team they’re joining.
This often looks like a person who has a general skillset that is valuable and they have chosen a specific specialty or niche to focus on, which makes them particularly useful to a specific team in a specific role.
What can the average person expect may happen to their salary after negotiating? What are the 3-5 tactics you recommend exploring?
On average, they can expect their offer to increase. By how much? My clients’ average increase is 16%, but of course that’s going to be skewed a little higher than the typical person negotiating a job offer. I would guess a typical person negotiating a typical offer can expect somewhere around a 10% increase in their offer, give or take.
To give a couple more stats that might help unpack the “on average” part: A little over 90% of the time, my clients see some increase in their offer. A little less than 10% of the time, we don’t see an increase, which means the company actually made their absolute best offer up front.
Obviously, we negotiate hoping to see an increase, but there’s still an upside to negotiating even if it doesn’t yield an increase: By negotiating, you can have peace of mind that you got the absolute best offer and didn’t leave anything on the table.
Some tactics to explore when negotiating your job offer:
Ask for a meaningful improvement of 10-20% more than their initial offer. Some folks will decide to negotiate, but then ask for a trivial increase, which they will often get. But our tendency is to ask for less than we should, which often means leaving money on the table.
Negotiate over email as long as possible. Recruiters are essentially professional comp negotiators—they literally do this all day, every day. In a given day or week, your typical recruiter will negotiate more job offers than any non-recruiter individual might negotiate in their entire career. So stay in email and off the phone as long as you can. Email also has lots of other benefits like giving the candidate a chance to articulate their case in their own words so anyone in the approval chain gets to see their case made on their own behalf rather than a recruiter’s general summary of it.
Ask for one thing at a time, starting with the thing you care the most about. This is in contrast to what I call “the kitchen sink strategy”. That’s where people will ask for lots of things to try to get the most stuff possible, but what that actually does is gives your recruiter a list of things to choose from when making concessions, and they’re almost always going to choose the cheapest things (which are the least valuable to the candidate). Instead, ask for more of the thing that’s most valuable and take it from there.
How aggressive should I be during a negotiation? I am afraid they are going to pull out of the process - how should I think about that?
In general, there’s an aggression range that I recommend staying within: Ask for 10%–20% above their initial offer. Where you should be in that range is dependent on your specific situation, and my general rule of thumb is “The more they need you specifically in this particular role, the more aggressive you should be.”
I call this your “aggression” factor, which is basically a number from 0–10: higher is more aggressive and indicates they are more eager to get you to accept the job. Take your aggression factor and add that number to 10% and that’s how much to counter.
This is obviously very general, but it works well for most people.
Offers are virtually never rescinded because someone negotiates. I have been doing this for almost 10 years, have negotiated hundreds of offers, and I have seen two offers rescinded. The last time it happened was over five years ago, and both instances were small firms with in-house HR people who wore multiple hats and didn’t really know what they were doing in terms of extending and negotiating job offers. Think of a small, local engineering firm with very few employees and a “Head of HR” or something who does everything from payroll to offer negotiation.
I’ve never seen a big tech company rescind an offer due to negotiation.
For most established companies with a dedicated recruiting and hiring function, it’s extremely unlikely they’ll pull an offer because you negotiate. Why? A couple reasons:
By extending the offer, they’re saying they want you to do the job. They want to make this work.
The cost to the company to get to the offer stage is substantial. They spend a lot of time and money to identify, recruit, interview, vet, and offer each candidate they hire. They’re unlikely to just waste all of that time and money in response to a counter offer when they could also just say, “Appreciate that you’re asking for more comp, but we’ve made our best offer and we hope you’ll accept it.”
It’s also important to negotiate the right way. My book and coaching use specific techniques that are designed to be collaborative and get to the best result. I don’t recommend using ultimatums, threats, and other hyper-aggressive tactics. If you do wild things in a negotiation, they might decide you’re not the candidate they want to have in their company long-term. But you have to push really far outside the normal boundaries to trigger that sort of response.
What do you see as the biggest myths people get wrong about job negotiation?
The biggest myth is that if you negotiate they might rescind your job offer. It just doesn’t happen, especially if you use collaborative but aggressive tactics. They just have too much invested to let the right candidate go for something as silly as “they negotiated”.
Another big myth is that you have to have competing offers to negotiate. You don’t.
I make a living by coaching people through negotiations, and most of my earnings are result fees, which are dependent upon negotiating improvements in my clients’ job offers. So I have to be intentional about who I work with—it’s not good for anyone if I allow people to hire me when they won’t get a good result. Yes, I get a fixed fee (a strategy fee), but most of my coaching revenue is from result fees.
I say all that to say: I don’t filter out potential clients based on whether or not they have competing job offers for us to work with. Do they help? Sometimes! But not always, and they’re definitely not a requirement for a successful negotiation.
What are the 3-5 biggest mistakes people make when negotiating their offer?
They’re not aggressive enough. The most common response to the counter offers I suggest for my clients is, “Whoa, I never would’ve asked for that much!” If you’re not asking for at least 10%, you’re not asking for enough.
They ask for too many different things. Earlier, I mentioned “the kitchen sink strategy”, which is a common mistake. People feel that by asking for lots of things, they give themselves a good shot at getting lots of things, but that’s not how it works. Think of your list of possible asks as a prioritized list that you keep based on what you most value in the negotiation. If you offer the entire list to a recruiter, they will also prioritize that list, but they’ll do it according to the cost of giving you each thing. Those lists—your prioritized list of asks, and their prioritized list of costs—will usually be inverses of each other. Now the recruiter can “give” you two or three things from your list, but they’re likely to be the two or three least valuable things to you. This makes things awkward because they’ve given you things you asked for, but you probably haven’t actually gotten what you want. Instead, ask for the one thing you value the most, see how that goes, then consider asking for the second most valuable thing on your list.
They share salary expectations up front. Most recruiters will ask you for your salary expectations and you’ll feel obliged to share that information in order to get your offer. But you don’t have to share that information, and it will almost certainly make your negotiation more difficult if you do.
What would you tell a recruiter who asks you: “What is your target compensation?”
“I don’t really have a number in mind right now. I’m excited for this opportunity and I know I’ll be a valuable addition to the team. I look forward to hearing what you suggest in terms of comp when we get to that stage.”
It’s not in your best interest to share your salary expectations. Don’t do it.
Why? Let me reframe the question so it’s clearer what they’re actually asking you to do:
“We know you don’t know much about this role—what our budget is, how badly we need to fill the role, how many other candidates we’re considering, the business value of the role to our company, and lots of other things—but why don’t you take a wild guess what we’re willing to pay you to do this job?”
You’re almost certainly going to guess wrong. You’ll either guess low and cost yourself money, or you’ll guess too high and possibly disqualify yourself from the process.
Yes, it’s possible their offer will be too low for you to accept and that might “waste everyone’s time”, but unless you’re interviewing for many companies at once, the time you’ll spend interviewing is pretty small. And if you defer the compensation question as long as possible, then your performance in your interviews might actually change their budget for the role as they realize you’re the perfect candidate for them.
If you are interviewing with lots of companies at once such that you really can’t afford to “waste time” interviewing for a role that can’t afford you, then the issue is not solved by “I should share my salary expectations with these companies”, but by “I should be more selective about the companies I’m interviewing with”.
For a lot more on this, here is a detailed article on how to handle this question, why it’s not in your best interest to share this information and a lot more:
How to answer salary expectations questions
How can I figure out my market value? Are there any data sources you use or how does one arrive at this?
Think of a target that consists of concentric circles.
The outermost circle is “the industry”. Look for data points that help you understand broadly what your skillset and experience are in the industry as a whole. That’s your starting point. Your best source for this data is probably a broad search (Google, ChatGPT, etc.).
As you work outside-in, the next (smaller) concentric circle is your market value in your industry and in your particular geographic region and specialty. This is more specific, and you can use this data to fine-tune your initial industry-wide estimate, which was probably pretty broad. Your best source for data is probably colleagues in the industry, people you’ve met at conferences, etc.
The final (smallest) concentric circle is the specific company you’re going to work for. Sometimes you can find data on what they pay people in your industry, or you might know someone who works there or recently worked there who can give you a pretty good idea what they pay people with your skillset and experience. With this level of granular data, you should be able to fine-tune your initial estimate even more to get a pretty good sense of your market value. Your best source of data here is an insider if you can find one.
At all of these layers of abstraction, you may be able to find public data that is somewhere between “totally useless” and “pretty darn reliable”. These sources change a lot over time, but the two that I use most often are levels.fyi and teamblind.com.
For more on the market value estimation process, you can read the “How to estimate your market value” chapter of my book for free.
What would you do in a situation where a hiring manager low balls you?
First, a definition of “lowball offer”. For me, a lowball offer is 15% or more below your minimum acceptable salary, which is the absolute lowest comp you would accept to do this job for this company.
This is a different type of negotiation because the standard “ask for 10-20% more than they offered” strategy probably won’t work.
So instead of just going for a straightforward negotiation, you have to change tactics and push for a much bigger result. In that case, instead of “You offered X and I would be more comfortable if we can settle on Y”, you might say, “You offered X, which is well below what I was hoping for, and which I found disappointing because of how well aligned I am with this role. I wonder if we can improve the offer so I can consider it.”
You might also add a target number “...I wonder if we can improve the offer to something like Z so that I can consider it.”
Often, Z will be more than 20% above their initial offer.
This technique can be effective in some cases. One word of caution: If this does work, then the next offer they make is likely their absolute best offer and there may not be room for further negotiation.
If this technique does not yield an offer above your Minimum Acceptable Salary, then you may need to just invoke that number, “Ok, I understand. I’m afraid I can’t accept this offer for less than [Minimum Acceptable Salary], but if we can get there, then I’m on board.”
How do you go about formulating a counter offer?
There are really two components to a counter offer: What to ask for, and how much to ask for.
For the “what” I suggest identifying the top three or four things that you care about in the offer (base salary, equity, sign-on bonus, and bonus structure are usually the top ones) and ranking them in terms of what is most important to you. You should almost always negotiate on one of those items at a time, so you’ll start with the first one.
There are also some wrinkles here, like it might be better to actually counter on “total comp”, which will often encompass all of those items, especially for big tech-type offers.
Once you’ve determined what you’ll ask for, you have to determine “how much” to ask for.
The main factor I consider when deciding how much to counter is how motivated they are to hire you. I often describe this as “How badly do they need you, specifically, to fill this role?” You can call this your “aggression factor”.
So you’ll calculate your aggression factor on a scale of 0 to 10, then add your aggression factor to 10%, giving you ao final number between 10% and 20%.
Ask for that much more of the thing you have listed first on your list of priorities.
Here is a counter offer calculator that will help you get started.