Top 5 Tips for Negotiating Salary with Candidates

The salary negotiation phase can make or break your odds of securing your favorite all-star software engineer on your team. Best case scenario: You arrive at a win-win situation and both of you are excited to dive in and hit the ground running!

Worst case scenario: One of you is disappointed in the offer or desired salary. This means, if you’re unable to agree on a number, you might end up back to square one or you have a newly minted hire who’s less-than-happy to be working for you.

To make sure you’re prepared to handle any curve balls, we spoke with Erik Gunderson, Attorney at Law at Charlton Weeks LLP and a few other tech hiring experts to divulge the most effective negotiation tips.

1. Figure out exactly what your candidate is looking to get out of this.

This is the first step that Gunderson takes when he’s negotiating for business.

“Is there something of value I have to offer? Is there some kind of risk or harm that other side is looking to avoid?” Gunderson says. “What are the stakes—meaning, what happens to the other side if the negotiations fail and we don’t reach any agreement?”

Hammer out these details before you get down to brass tacks at the negotiating table. If you don’t, you’re not fully ready to respond to any possible offers or counteroffers to you.

Rich Kahn, CEO of eZanga.com, would agree with Gunderson and says the first thing he does is first negotiate the issue within himself.

“You want both sides to feel like they're getting what they want out of the situation, so I have to reflect on what the other party needs from me,” Kahn says. The biggest failure in negotiation is not thinking of the other person first. Always remember: good negotiation is compromise.”

"What are the stakes—meaning, what happens to the other side if the negotiations fail and we don’t reach any agreement."

2. Remember, money really isn’t the end-all, be-all.

“Time often matters a lot. Tech professionals are often going to be asked to give up lots of time, both on the job and being available during what would otherwise be personal time,” Gunderson says. “Titles, scope of responsibility, who bears what risks when things go wrong - there are lots of other chits on the table than just money.”

Assuming your favorite candidate comes 100 percent prepared to the negotiation, chances are, she is fully aware of her market value. If your offer is below that, what other incentives can you offer to pique her interest (re: No. 2).

3. Make a list of three potential results.

• Best-reasonable-case.
• Worst-reasonable-case.
• Result you can minimally live with.

Whether or not a result is reasonable depends on No. 1 and what you need from your favorite candidate. If there are certain benchmarks or projects that you can tie to your worst-reasonable-case, all the better for your team.

Once you decide on these, “don’t stop negotiating until you’ve at least reached your worst-reasonable case,” he says. Of course, best-reasonable case is always the goal.

4. Always start with an aggressive initial offer.

Something that’s “a little better for you than the best-reasonable-case result,” Gunderson says. Of course, chances are, your first offer will be countered. “I make it a point to talk often about what value my negotiation partner is going to get out of the deal.”

It’s crucial to keep them engaged and interested.

5. Again, think about what the programmer wants.

All of the experts we spoke with couldn’t emphasize this point enough. While it may be tempting to focus on your gains, the key to a solid negotiation is to step into the shoes of your favorite software engineer candidate.

For example, Nina B. Ries, principal of Ries Law Group in LA, recently negotiated the salary of a tech executive. “We convinced the company that the significant signing bonus they were offering should be added to his annual compensation, reasoning that the company would also benefit from being able to spread those payments out over time,” Ries says.

“Through the power of compounding in his raises over the next few years, he will be able to reap much more than just the lump sum the company was initially willing to offer.”