The technology industry is known for offering some of the most attractive salary packages in the job market. But research has shown that not negotiating your salary can cost you thousands over the course of your career.
“I tell my graduate students that by not negotiating their job at the beginning of their career, they’re leaving anywhere between $1 million and $1.5 million on the table in lost earnings over their lifetime,” Linda Babcock, an economist at Carnegie Mellon University, told NPR.
So how does one navigate this crucial aspect of a new job?
Firstly, we need to look into how salary packages can be structured in the technology industry.
Although Cyprus is not used to jobs with complex salary structures, containing bonuses and variable clauses, they are slowly starting to be adopted. This trend has been accelerated by the relocation of several successful technology startups and mature companies on the island in recent years.
On top of a basic salary, technology companies can offer other incentives such as equity, additional benefits such as healthcare, an annual bonus, a signing bonus, which is especially applicable if you are being asked to leave your current job, and relocation benefits if you are being asked to move to Cyprus for a new role.
For example, a game designer position based in Cyprus offers medical insurance, money for a gym subscription, English lessons to help bridge the language gap, and a full relocation package.
In terms of equity, this can include shares in the company, which can be beneficial to both parties, since they not only increase overall remuneration for the employee but also incentivise them by offering a stake in the company.
“There have been many studies conducted in the past 20 years regarding how employee ownership affects the performance of a firm. The overall conclusion obtained from these studies shows that productivity of the firm increases by 4 per cent to 5 per cent on average every year when ESOPs (employee stock ownership plans) are adopted,” analysts from equity management software company Eqvista say.
Workers who have been headhunted by a technology company or who are at the stage during an interview process where they discussing remuneration must be aware of all of these potential ways of being rewarded for their talent and experience and put them on the table for discussion
Another crucial aspect of the salary negotiation process is understanding how much you are worth the company interested in hiring you and using that as a compass to guide you through the negotiation.
This is tricky but the key thing is to understand the market and how it remunerates people with similar skills, knowledge and experience to your own.
While it is tempting to visit websites such as Glassdoor, a website where current and former employees anonymously review companies and reveal their salaries and job role details, more experienced recruiters advise that the figures available may be out of date or simply inaccurate as they may not take into account equity and bonuses.
“Unfortunately, the best and most up to date information is a moving target but common knowledge among HR professionals,” technology industry insiders Candor have stated.
“The easiest way for you to tap into that is through third-party recruiters,” they added.
An additional thing to consider is one of the easiest to remember but somewhat awkward to execute.
In essence, you must avoid low-balling yourself by falling into the trap of letting the company know how much you would be willing to accept.
Industry insiders advise that it is better to avoid having the salary conversation early into the interview process and revisiting it once the company has signified that they are indeed interested in hiring you.
“Every employer will ask about expected salary and every experienced professional knows not to answer,” Candor says.
“This is a standard part of the hiring dance, don’t be afraid to stand your ground,” they add.
Questions that may be useful to ask at this stage include queries on what the company’s wage range is for the role, how much is the equity (if offered to you) is worth at the moment and if it is expected to appreciate in time, and what the level of the job role is within the company.