Software Engineer Salary Negotiation - How to Negotiate a Software Engineer Salary

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Software engineers typically receive competitive compensation and perks, but how do you know your job offer is competitive before accepting?
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In this episode my goal is to cover everything you need to confidently navigate a software engineer's salary negotiation.
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I'll first cover the compensation package structure for most software engineering roles so you know more about the software engineer's base salary, bonus, equity package and sign-up bonuses.
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That way you know exactly what to expect in an offer.
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Then I'm going to walk you through my five recommended steps for negotiating a software engineer job offer that are proven through real software engineer salary negotiations that I've led for my clients.
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That way you can filter out the bad advice out there and use salary negotiation strategies that are actually going to work.
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And I'll close out the episode by highlighting three common mistakes you should avoid in a software engineer salary negotiation.
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That way you don't risk the opportunity and you do actually secure competitive compensation in your career.
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So let's get into it.
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Hey everyone, welcome back to the channel.
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If you're new here.
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My name is Brandon Bramley and I'm the founder and lead negotiator at the salary negotiator dot com.
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I provide professional job offer negotiation coaching courses and tools to help professionals like you navigate the negotiation process and secure competitive compensation.
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I'm not just a career coach or recruiter giving out generic salary negotiation advice.
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There's already enough bad advice floating around online.
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Instead, I personally led hundreds of salary negotiations across various roles, helping my clients secure hundreds of millions more in compensation.
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My background is in strategic negotiations and my goal is to debunk some of the bad advice out there and give you proven negotiation strategies that are actually going to work and help you earn more.
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So if you're a career professional looking to earn competitive pay, subscribe here for actionable tips and, when you're ready to take your negotiation to the next level, visit thesowerynegotiator.
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com coaching, courses (https://www.
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thesalarynegotiator.
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com/courses) and tools (https://www.
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thesalarynegotiator.
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com/salary-negotiation-templates) designed to help you negotiate the best possible offer and give you everything you need for your career.
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Okay now, before we dive into how to negotiate a software engineer salary, let's talk about the compensation components.
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You might see it's really important to understand the difference between your base salary and total compensation.
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Too many engineers focus on only the base salary for a role, but that's just one piece of the puzzle when it comes to pay as a software engineer.
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When considering a new company, you need to look at the whole picture your total monetary take home pay, which is also known as your total compensation.
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This is going to include your base salary, any annual bonuses, the value of your vesting equity each year and any sign-up bonuses.
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Now you might find four core compensation components in a software engineer offer package.
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First, there's your software engineer base salary.
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This is pretty consistent.
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It's your guaranteed pay that you're going to see in every paycheck.
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It's really only going to change if you get promoted or if you have any merit increases, since it's a set rate.
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The second item you might see as a software engineer is you might have an annual performance bonus, which is a percentage of the base salary.
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Usually it's going to range depending on the software engineering level of the role, and it can also be based on your personal or company performance, and it's usually paid out annually.
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So note that it can fluctuate.
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While the software engineer bonus is tied to your base salary, it's usually not negotiable at most companies.
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But if you do negotiate to your base salary, it's usually not negotiable at most companies.
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But if you do negotiate a higher base salary, obviously your bonus is going to increase along with it.
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So keep that in mind.
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Third, you'll hopefully receive an equity grant as a software engineer.
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It's usually going to come in the form of either restricted stock units, rsus, or employee stock options.
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If you're going with a non-public company, rsus represent actual stock, which means you receive shares of the company's stock outright once vested.
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Stock options give you the right to purchase company stock at a predetermined price.
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For example, you have to pay or exercise these options to actually receive the shares.
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They don't come free.
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Software engineer equity grants are also going to have a stock vesting schedule, which means you're going to have to wait for the equity to actually vest according to that schedule before you actually own the shares or the options.
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Most stock vesting periods are going to be three to four years, with the equity vesting in increments.
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Over that time the stock vesting schedule might be evenly distributed or staggered.
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So, for example, nvidia rsu vesting schedule is a four-year period with equal annual vesting 25 invest every year.
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So it's consistent.
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However, you're going to find a staggered approach for the google rsu vesting schedule 38 best in the first year, 32 in the second year and 10 in year four.
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So all companies are going to have their own specific vesting schedules for software engineers.
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So keep that in mind.
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You don't get the full value of equity upfront, but you do share in the value fluctuations over that period.
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So if the stock price goes up, so does the value of your equity as a software engineer.
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But the flip side is also true.
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So if the stock price drops, so does your total compensation, because the equity decreases.
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So there are risks with equity.
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Also, it's important to note that if you leave before the equity fully vests, then you're going to forfeit the unvested portion of your software engineered equity, so keep that in mind.
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Finally, there are sign-on bonuses for software engineers.
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This is a one-time cash payment, typically paid out about 30 days after you start.
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It's usually often designed to offset loss incentives or equity from your previous company or as an incentive to join a new company.
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Software engineer signup bonuses aren't always included in the initial offer, though, so they usually do require salary negotiation.
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So keep that in mind, but know that I've had great success in securing them for the software engineers that I work with, so it is possible.
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I will also say that some companies that offer equity as software engineers might also provide an annual equity refresher, which are usually additional equity grants given to you each year.
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However, these stock refreshers usually aren't always guaranteed and they're going to vary significantly from year to year, so we don't usually include them in our total compensation calculation, but I will say it's worth asking the recruiter if these exist.
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Just note that they're probably going to withhold some of the specific details, and that's normal.
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Now, these four main software engineer salary components your base salary, your bonus, your equity and a sign on bonus are going to make up the total compensation as a software engineer in most job offers.
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To help you visualize this, we have a total compensation calculator on our site.
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It lets you input your base salary, your bonus, percentage, equity grant and sign-on bonus, then shows you the estimated compensation over the vesting period, both in total and on an annual basis.
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You can find our free compensation calculator at thesalarynegotiatorcom and I'll also go ahead and link to it in the episode notes below so you can use this free tool.
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Alright, now that we've covered how Software Engineer's compensation structure works, let's discuss the Software Engineer's salary (https://www.
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thesalarynegotiator.
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com/software-engineer-salary) negotiation steps.
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These are strategies that I've used many times to successfully negotiate software engineer job offers and I'm going to highly recommend you follow to navigate your software engineer salary negotiation once you have an offer in hand.
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So, once you have a job offer in hand, the first step to negotiating is to make sure you fully understand the compensation components and the benefits in the software engineer offer package.
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The biggest takeaway from this is that understanding the software engineer total compensation before negotiating is very important.
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That way, you know exactly how to value the software engineer offer and what to negotiate, including your base salary, your annual bonus, equity and, hopefully, a sign-on bonus.
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The second step is what I call doing your due diligence and asking strategic questions.
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This is where you review the software engineer offer and come back with a list of questions for the recruiter.
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This not only helps you clarify any questions you might have about the offer, but it also allows you to strategically ask questions that will build salary negotiation leverage.
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You can call out things that might not be as competitive as your current company or what competitors offer.
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If you need some ideas, you can grab our list of strategic questions to ask from our templates page or our course (https://www.
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thesalarynegotiator.
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com/job-offer-negotiation-course).
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But don't skip this step, even if you think you understand the offer.
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This step is super important for building negotiation leverage by showing you're doing your research and your due diligence on the offer before sending a software engineer counteroffer.
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It also lets you secure any freebies or items that the recruiter might use as trade-offs later on in the salary negotiation, so make sure you do this.
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The third step is to do the software engineer compensation research and find the base salary and the total compensation ranges for your specific role, location and level at the new company.
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You can use various online resources to find this data, but make sure you use multiple sources and average the results.
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We are essentially trying to understand the compensation ranges so we can see where your initial software engineer offer sits on those ranges and how much more room there is for improvement and negotiation.
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Most companies we've found are going to try to hire software engineers at the lower to mid end of the pay bands, which is completely normal.
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But I'm always going to suggest to push towards the top end of the software engineer pay ranges when you go through the negotiation to see if you can't end up at the top end of the range before you start.
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But just remember this publicly reported data might not always be accurate.
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Software engineers might report higher equity than a new hire would due to stock appreciation or they might have uploaded the compensation incorrectly.
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So if you want help with this, you can use our compensation research comparison tool on our site or you can work with us directly to help build your software engineer counter offer.
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Once you do have the software engineer compensation research (https://www.
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thesalarynegotiator.
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com/resource-center/how-to-negotiate-a-software-engineer-job-offer) done and you've got the answers to all your questions, you're ready to draft a software engineer counter offer.
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This is where we take a database approach and we craft a software engineer counteroffer to send to the recruiting team.
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We're going to present the top end of the range you're targeting based on your research, and call out any items that weren't competitive based on your due diligence and questions.
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I highly suggest doing this by email, because it gives the recruiter everything they need to advocate for you and they can simply send your points to the comp team instead of you hoping that they're going to note down your comments on the call.
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And you also have to realize that the recruiters negotiate offers every day, so they will be ready with tactics to cut you off on a call or steer you in a different direction if you try to counter verbally.
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So stick to email if you can.
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The final step after sending a software engineer counteroffer is to be prepared to handle recruiter pushback.
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Unfortunately, it's almost guaranteed that you'll get some pushback from the recruiter.
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Tech recruiters are trained to deter you from negotiating salary and to get you to accept the initial offer.
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So always be prepared for that pushback and know exactly what to say to overcome those objections, to get them to take your concerns back to the comp team.
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Essentially, you wanna say that you understand their concerns but nicely reiterate yours and ask them to take it back to the comp team for one last look.
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It might take overcoming a few objections, but once they agree to take it back for another look, nine times out of 10, they're gonna come back with a better software engineer offer package.
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We have our full list of objection handling and responses on our templates page (https://www.
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thesalarynegotiator.
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com/store/objection-handling-scripts) and in our course for download.
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If you do need these scripts or you need to know exactly what to say when you encounter this recruiter pushback From here, the recruiter will come back with a better offer that fits your needs or is lower than your ask.
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At that point you can decide if you want to send another software engineer counteroffer to push again or if you're ready to accept the updated offer.
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Just note that negotiating salary is not like how you negotiate in other instances, say for a car dealership, for example.
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Right, there's actually not that much back and forth and you really don't want to send more than two software engineer salary counters, otherwise you're going to risk coming off as aggressive and jeopardize the relationship.
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Okay, the last thing I want to cover is a few software engineer salary negotiation mistakes.
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Before you decide to negotiate a software engineer offer letter, these are very important.
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The main item I recommend against is sharing your salary expectations (https://www.
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thesalarynegotiator.
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com/store/salary-expectations-scripts-and-email-templates) or your current pay with the recruiting team.
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This is usually only going to work against you.
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So try not to do this.
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If you think about it, right, no-transcript, or you're going to run the risk of being down leveled, which is very common for software engineers at tech companies.
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So if you're moving to Amazon, microsoft, meta, google, any of those companies, don't do it, because you will get down level.
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On the flip side, if you throw out a high number, thinking that's going to help you out, think it's going to get you more, they might think shoot, I'm not sure if we can afford this engineer, so let's go with a different candidate instead.
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So it's not a good strategy and it can actually lead to you not getting a job offer.
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So try to stay away from that.
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And remember the recruiter is gonna know exactly what they pay for your software engineering role, so it's silly to think that you need to tell them how much they should pay.
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So you're always gonna want to turn that question back on them to learn more about both the base salary and the total compensation ranges for the role.
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The second mistake to avoid is making sure that you're realistic about what you should ask for in the software engineer counteroffer (https://www.
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thesalarynegotiator.
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com/store/counteroffer-examples).
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Way too often Do I see engineers ask for way too much which just doesn't make sense for the specific role.
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They either get laughed at or, if it comes off as aggressive, and in some cases it can even get an offer rescinded.
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So you want to avoid that and you should always take abased approach as a software engineer to ensure you're asking for realistic compensation that they can actually provide.
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At the end of the day, the company has set compensation bans and they're only going to pay within those bands for specific engineering roles and levels.
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So don't jeopardize your software engineer offer by coming off as too aggressive and asking for unrealistic numbers.
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It's just not a wise way to negotiate.
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And finally, don't be worried about a software engineer salary negotiation, especially if you haven't done this before.
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You might feel nervous, but as long as you follow proven strategies and keep the negotiation professional, there's no reason why you'd risk the software engineer offer If you do it right, you should secure a better software engineer offer package before starting the new role.
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So have the confidence in this, but make sure you're following proven strategies or get professional support if you need help negotiating a software engineer offer.
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That wraps up this episode on software engineer salary negotiation.
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I hope this breakdown of software engineer's compensation structure, our proven software engineer salary negotiation strategies and jr's compensation structure are proven software and jr's salary negotiation strategies and the negotiation mistakes that void are gonna help you feel more confident in these discussions and your negotiations.
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If you are serious about getting the best possible offer at the top end of the pay van, I highly suggest you don't go into the salary negotiation alone.
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Head over to the salary negotiator comm to either work with me directly as your salary negotiation coach or check out my salary negotiation courses (https://www.
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thesalarynegotiator.
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com/salary-negotiation-course) and tools.
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You'll find all the links in the episode notes below that are going to help you negotiate better pay, and if you found this episode helpful, make sure you subscribe, leave a comment and be sure to share it with someone that can use this advice in their career.
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Thanks for tuning in and happy negotiating.