Negotiating Your Salary - Hanging Out With Ann

Welcome to Saving Money with Andrew!

Ann (a pseudonym) is one of my favorite people. Honest, funny, and inquisitive, Ann is also one of the most disciplined savers I’ve ever met.

I caught up with Ann after finding out that she successfully negotiated a 75% raise from her new employer. After congratulating her on this coup, I asked her to share her story.

Hi Ann! Tell us a bit about yourself and your career

I'm a mom of three kids ages five and under and I've been working as a software engineer for 10 years, remotely for the last five. I really enjoy solving puzzles in my job. But it’s a job, and I wouldn't do it for free.

Tell us about your recent negotiating success!

In Summer 2021, I was unhappy in my current role. I was doing a lot of technical compliance work, fulfilling requirements that no one really cared about. I worried that my skills would atrophy and I would become a lifer at that company with decent job security but few transferable skills. I needed to make a change.

I reached out to my network and started interviewing. At first, I choked and badly bombed my interviews. I was still employed and not at all desperate, so I could be choosy about where I interviewed. I focused on roles that interested me, and turned down any interviews that required a lot of preparation.

Finally, I was completing interviews with two companies when a friend connected me with an ex-coworker who was working for a company negotiating salaries on behalf of job-seekers. I was skeptical but after an initial meeting and a lot of reference-checking, I paid an initial (small) retainer and agreed to pay them 20% of any increase they could get above my initial offer.[1]

The consultants helped me customize my approach with each company, helping me rehearse conversations with the two recruiters, and advised me on how much to push. The most surprising part of the process was that these negotiations were not just one round and done. Instead, I first tried to get each company to increase their initial offer on their own. Then, I brought in any other offers to try to get them to match or beat any aspects I wanted to improve (salary, benefits, other).

How did I know when to stop? The consultants told me that the magic words were when a company said, "this is our best and final offer." At that point, the (much improved) offer became take it or leave it.

Were you afraid a company might be turned off by negotiation, or even rescind your offer? Were you worried during the process?

As long as you are conducting yourself professionally throughout, any company that would rescind an offer out of pique was not to be trusted anyway. Between the interview process and the negotiation process, the company has already invested a lot of resources in trying to get the offer signed. Any sensible employer wouldn't just throw that all away.

Even with a consultant helping me, salary negotiation still felt fraught and nerve-wracking. But the consultants have done hundreds if not thousands of these conversations, and with more practice and exposure, I overcame my anxiety about the process. I even improved my outcome by starting an interview process with a third company which increased my options and ability to negotiate.

In the end, I had three offers. One was a slight decrease from my current total compensation, one was a 20% increase, and the last one was...a 75% increase! I was interested in all of the roles for different reasons, but was ultimately swayed by the life-changing position I could put my family into with such a large raise.

I paid the negotiation consultants 20% of the increase in the negotiated difference for the first year of compensation and it was some of the best money I've ever spent.

Wow, what an incredible win! What would you say to others thinking about negotiating a job offer?

I think I was really lucky with my line of work and my timing, but I feel I also handled the process well by using the right resources when I needed to. Finding a new role and negotiating your salary takes marketing and sales ability. It’s weird that we expect people to just do that all on their own. It's a perfect area to outsource and bring in experts to help you figure out your strategy. We are used to it for athletes, actors, and even realtors, but not in our own lives. You might not feel you deserve anything more than what's initially offered, but what if you're wrong? Job hunting can be a lonely and daunting process and having more people on your side is incredibly helpful.

But it’s true that things have changed a bit since I negotiated in Summer 2021. It's a different climate now, but I still think most people should consider negotiating job offers. And the tougher job market now may even be all the more reason to seek professional support from people who have many more data points than you do. Differences in salary are a tiny drop in a business’s costs, yet a salary bump can make a big difference to an individual employee. And any employer or hiring manager that gets offended if you try to negotiate your salary is waving a giant red flag.

Have you successfully implemented any other Saving Money with Andrew tips? Do you have a favorite post?

Of course! I switched over to using the Cashback Monitor site for checking cashback options, my husband switched over his phone plan to Ting, and my go-to gift these days for families with new babies is to buy DoorDash gift cards at a discount.

Coming off this big win, are there any words of wisdom you'd like to share with the Saving Money with Andrew readership?

When I look at our household finances and my retirement planning spreadsheets, it's ultimately a few key decisions that have the most impact: where we live, how many kids we have and how they are cared for and educated, and what our income is. It's worth the investment to get more out of those transition points when they come up.

But don’t forget to celebrate! After I signed the new job offer, I made a "lifestyle inflation wishlist" to talk over with my husband. We decided to get one thing off the wishlist to celebrate the new job and wait a year for the other items until I was more secure in the role. I ended up buying a fancy kitchen appliance that I had wanted for a decade, after learning about it from Megan McArdle, and it's been fun to learn how to use it for feeding our family.

Ann’s beloved Thermomix (I am jealous!)

And now, Andrew’s pick(s) of the week:

Nobody Wants to Buy a Fixer-Upper Right Now

Saving Money…on Hermès? His Girlfriend Wanted a $10,000 Birkin Handbag. He Spent 60 Hours Making Her a Replica.

And on a more serious note: What Can We Do About Pandemic-Related Learning Loss?

I hope this has been helpful. If you liked it, please share it on social media! Also, please send me your feedback, requests, and success stories.

[1] For example, if they negotiated a salary of $100,000/year versus an $80,000 offer, Ann would pay 20% of the $20,000 increase for one year, or $4,000.