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Why sharping your negotiation skills becomes more and more topical for tech hiring? Just 2 years ago, the compensation was in the third place among developers’ priorities when picking a job offer. For 2023, the picture is a bit different: first, they consider hourly rates, then — work-life balance, and after that — remote team. But tech companies still need to fit into the limited hiring budget.
In the USA, 85% of candidates who negotiate get higher salaries. So the developers you are going to hire might also actively defend their interests. Be prepared to lead the conversation where you want it to.
If to google “how to negotiate developer’s salary”, you will mostly see advice for developers but not for hiring managers. To remedy the situation, we are explaining how to satisfy the needs arising on the other side.
Negotiating a developer's salary or compensation requires preparation, research, and effective communication skills. We suggest discussing compensation should be the final step in the optimization of a hiring budget. You can easier navigate the negotiation process when you’ve built other chain links in advance.
Before the Interview
Let’s explore how to make an ace job offer and satisfy more aspects a particular developer requires in their future workplace. Thus, you can shrink the necessity to negotiate a developer’s compensation.
Research Salary Information
Begin by gathering information about the average salary range for developers in your location and industry. Websites such as Glassdoor, Payscale, and LinkedIn Salary Insights can be helpful in your research. There, you can evaluate candidates’ experience, skills, and the cost of living in different areas. Researching the talent market is a must. If you appoint a sum that is too below the average market price — you will most likely waste a lot of time and will have to rise your total cost per hire in the end.
A good idea is to double-check how you are distributing your skill gaps between the roles you want to fill. For instance, an Agile Project manager can cope with the tasks of both Scrum Master and Product owner. If your backlog doesn’t remind you of a giant warehouse, hiring a full-stack software developer could be more reasonable than looking for 2 people for back-end and front-end development.
Level Up Your Compensation Package
When you post a vacancy description with a solid social package, you get a wider range of loyal candidates. When your potential team members read your attractive job opening, they “try on a suit” with no flaws. Their desire to join your project grows, and their aspiration to negotiate compensation mitigates.
By investing in talent well-being, you not only attract top tech talent but also invest in tech staff retention and decrease developer turnover rate. Better medical care = shorter sick leaves. Mentoring, code reviews, and other training = a higher quality of your product.
Creating a job offer, include as many benefits to your compensation package as you can, for example:
Well-structured Paid Time Off (PTO) policies;
Medical insurance;
Upskilling coverage;
Flexible or fixed working hours;
Mentoring within the company;
Memorable corporate events.
Creating a stable and motivating working environment can be not so costly as paying everyone a higher hourly rate. Nevertheless, that practice is beneficial for both the developers and the company.
To delegate organizational burden, you can explore how partnership with EOR helps with managing law compliance, tax coverage, and many more HR Ops.
Prepare Bonuses
We have already discussed a competitive compensation package, you might say. Sure, but the ability to portion out the good news is a great psychology hack to attract developers. Once the candidates’ engagement starts to fade during the hiring process, you need to wow them again to fix your winning position in their heads.
We’ve listed some proven loyalty policies to implement.
An annual or quarter performance-based bonus;
Referral programs for recommending new team members;
Free travel vouchers;
Help with relocation;
A corporate babysitter;
A corporate library;
A corporate therapist;
Legal assistance;
Professional certification coverage.
Making such a list once will pay off constantly, as you can use it at every new interview.
Groom Your HR Brand
Ethical communication and quick responses are must-haves throughout the hiring process at any stage of the company life cycle. While your tech team is growing, your HR Brand should grow too.
Keep in mind, that developers actively leave their feedback about hiring process online. Such Indeed reviews, for example, form the job satisfaction rate for your brand. If the company does not keep a history of interactions with a candidate, such a company is considered to be irresponsible and not recommended for employment. Depersonalized hiring impacts even the reputation of tech behemoths. Applicant tracking systems (ATS) could perfectly handle that issue.
What else? Show the seriousness of your intentions and the firm’s stable status, creating a unified branded visual design for all the application forms, messages and test tasks. Prepare a “juicy” presentation about your corporate culture, smooth work processes, and make sketches of career growth.
During the Interview
We don’t recommend aggressive negotiation techniques.
❌ Ultimatums. Do not manipulate time, saying that you have only 10 minutes before the next interview with a more agreeable candidate. It’s better not to compare your vis-à-vis with their competitors anyhow. Don’t think, your motives are unclear to the candidate. While, if you have stronger candidates, you can list the points of growth in 2 cases: you want to share what to master to get a better compensation, and you want to create useful feedback when rejecting a candidate.
❌ Lowball. Making an unreasonably low initial offer will rather repel qualified developers.
❌ Stonewalling. Refusing to engage or provide any concessions during the negotiation process can be used to frustrate the other party or wear them down over time, hoping they will eventually concede.
❌ Bluffing. When you “forget” to mention some responsibilities related to the discussed position, you can gain an advantage in negotiations. However, it erodes trust and harms long-term relationships.
Instead, lead the discussion and remember that you are talking to your potential team member, and will share a mutual working environment soon.
✅ Investigate the Background
The good interviewer is always curious, like a Junior developer who is far from “I saw everything” approach. New talk — new angle of view. It reminds us of speaking Portuguese with the Portuguese and Czech with the Czechs.
To explore the person’s motivation, actively listen, allow telling more, asking interesting questions with open answers. Then, by offering additional bonuses from the list above, you will resonate with a candidate.
Adapt your communication style. For example, if a person is joking, you can respond with an unobtrusive joke when it aligns with a professional tone.
Provide equal conditions for diverse candidates. Start negotiation with the same amount of money for men and women, older and younger developers.
✅ Respect People's Time
Do not postpone the job offer discussion. Find out what are the hourly rates developers expect before they devote their time to coping with test assignments. If the expected rates significantly exceed your planned expenses, maybe, it’s not your candidate. When the difference is not huge, highlight what you offer to compensate for it. Take into account, people can set higher expectations to have a room for maneuver.
Clearly outline all the working conditions to avoid future misunderstandings. For example, tell if you offer a certain compensation size for the probation period, and a bigger one — after. Discuss if the scope of tasks is fixed, and how its change affects compensation.
✅ Sum Up Your Message
At the end of the conversation, make a short conclusion, uniting all the benefits of your job offer in a couple of sentences. When you ask about the candidate’s impressions, the person you want to hire feels you care and gets a more clear picture before considering the offer. Ideally, make a branded offer and send it to the candidate for signature.
What If I Am Not Ready to Negotiate?
Want to hire developers who will consider you an employer of choice, but your tech company budget doesn’t suggest paying sky-high salaries? Here is the good news, with the IT staffing services we provide, you will get a balanced tech team with:
The necessary experience;
Motivation for the long-term partnership;
Competitive hourly rates that fit into your hiring budget.
Job offer negotiation is a sophisticated science. Fortunately, the specialists from Outstaff Your Team have already mastered it to the fullest.
FAQ
What is the best hiring stage to start job offer negotiation when you are hiring a developer?
Include the question about compensation to the form for the candidates who will apply to your job opening. When you are pitching your potential developers, receive the first positive feedback and ask how much they would like to earn. After candidates have shared their expected incomes, warn them if they exceed the upper limit of your budget and tell them about the compensation growth perspectives, depending on the developers’ performance on the project.
What phycological tricks do developers use to negotiate their job offer?
Establishing a higher anchor, developers start with the bigger money amount to get down to the desired compensation during the discussion. The “flinch” technique is when they react to an initial offer with a visible display of surprise or disappointment. They can make strategic pauses to create a sense of discomfort or anticipation. One more method is “take-it-or-leave-it”, telling about another job offers available. This creates a sense of urgency for the hiring manager to approve the candidate faster.
How can I reduce stress during the job offer negotiation?
Keep being positive when negotiating compensation. Remember, it's a discussion, not a confrontation, articulate your reasons calmly and professionally. You can delegate the negotiation to Outstaff Your Team when hiring developers and other tech specialists.
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