Coinbase, a cryptocurrency company doubled its employees in the last year. As the company continues to add team members, it has adopted a somewhat-controversial hiring tactic: it won’t negotiate salary with new hires.
The company says they have adopted this practice because they want to hire top talent. With this goal in mind, they already offer salaries competitive in the marketplace.
Coinbase’s chief people officer LJ Brock explained the company’s philosophy. “This year we’ve continued our commitment to top talent by further increasing our cash and equity compensation – from the 50th percentile amongst our peers to the 75th – across the entire company.”
Brock also suggests that marginalized workers – including women and people of color – won’t have to worry about income disparities they may face when negotiating salary. Specifically, every person who holds the same position in the same location will receive the same salary and equity offer from Coinbase.
Coinbase’s non-negotation policy has earned its share of advocates, who suggest that underrepresented employees lack resources and know-how to advocate for themselves in these negotiations. This income gap can follow them throughout their careers. Coinbase also has had its share of controversy in the recent past, and this step is just the latest in this unique company’s history of radical decisions.
However, Coinbase’s decision is an anomaly in the corporate world. For better or worse, new job offer negotiation is still a common practice that most job candidates will have to maneuver. How can you make sure you’re negotiating a fair and a competitive payment package for yourself?
Determine how much power the person across the table has to negotiate salary.
When you’re in an interview, the person across the table from you may have limited or no power to negotiate the salary offer they’re instructed to give. For instance, if you’re interviewing with a hiring manager, they may not have much wiggle room, if any. An external recruiter, too, may be more concerned with finding the candidate willing to take the lowest salary more than the one who is the best fit for the company.
This is why it’s often a smart idea to wait until the interview to negotiate how much you expect to be paid. This is when you’re more likely to be connecting with your boss or superiors who have more power to negotiate.
Wait for the employer to list a salary figure; never offer one yourself.
It’s never a good idea to start talking about salary. Instead, make sure that you use the interview to convince the employer you’re the best candidate for the position before payment expectations are even on the table. Also, if the interviewer starts asking for your preferred salary early in the interview conversation, politely suggest that you would rather wait to discuss. Again, you want to make sure the employer wants to hire you, and of course, that you want to take the job. If you’re not interested in the position after the interview – which does happen – then negotiating a salary early in the process is a waste of time.
Conduct market research to identify how much a company should be offering.
Some job candidates don’t have any idea how much their salary offer should be. This could be because they’re in a new role or city, and what they were earning before isn’t equivalent.
This is why it’s important to conduct salary research before you walk into a salary negotiation. Good places to start include your network, trade association, and Internet sources like Glassdoor and Payscale. Additionally, you could reach out to employees in similar positions at the company via social media. They may not respond – but 27 percent of respondents in a survey said they would tell a job candidate what they earned, according to HBR.
Consider the entire offer, not just salary.
Remember that the salary isn’t the entire offer. Your benefits, including health insurance, equity, and other factors, also complete the offer. Perhaps the company will also pay you to complete training or earn a certificate. Of course, your negotiation can also include non-money requests that would make the position more appealing for you to take. These include a flexible work schedule or travel.
If you’re choosing between two companies, there are more factors to keep in mind besides just salary, including company culture, mentorship opportunities, growth potential and promotion, and professional development opportunities, among others.
When you’re given an offer, interrogate where the figure came from.
Not every company is open to negotiation, or they can’t meet the offer you came in intending to ask for. But, if they’re coming back with an offer you don’t expect, it is your right to ask to understand where the figure came from.
Jeff Weiss of Vantage Partners explains you can ask questions about how they came up with the number and how they calculated your years of experience.
“There are many companies that don’t want you to negotiate but that doesn’t mean you don’t come back with questions. If an offer is made, there is an opportunity to explore and expand it,” he said.
Equitable Salary Negotiations for All
Eliminating salary negotiations can level the playing field for women and minorities who fall behind White men in earnings throughout their careers. However, most companies are unlikely to adopt a negotiation-free hiring process anytime soon. Instead, job candidates should use these strategies to make sure they’re not settling on a salary too soon.