Paid in Full #012: How to negotiate your next raise

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:

Guiding Principle:

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:

Base Salary

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.

Signing Bonuses

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.

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