Consider two graduating PhDs who are transitioning into industry. Both are incredibly busy finishing their research, writing their dissertation, and teaching. Both spend the same amount of time recruiting for industry roles - and both join the same company in a similar role. PhD #1, let’s call her Jane, soon discovers she is being paid less than her peers for the same work and has a boss that won’t promote her. She’s forced to work doubly hard just to achieve parity with her co-workers, or else leave and start over somewhere new, wasting a year. PhD #2, let’s call her Joanne, in contrast, is happy with her job. She is paid similarly to her peers and has a clear path for growth at the company. What did Joanne do better?
We have now advised 71 PhDs to follow this second, better track and we understand what defines these trajectories. We hope this salary negotiation report educates similar individuals how to negotiate salary. The difference between these two individuals is not merit, nor is it about who interviewed better or does better work. The difference is in how they think and negotiate. Joanne understands that she is joining a business. Compensation and promotions are respectfully taken by her self-advocacy, not given by the company. Jane assumes that the company will take care of her once she proves herself and so does not ask for much at the beginning. Joanne sets expectations and gives feedback to her manager for a productive working relationship. This is a virtuous cycle: you ask and your manager sets the higher expectations that enable you to work upwards. Jane is reticent and does not want to damage relationships. This is a vicious cycle: you don’t ask and your manager doesn’t expect more, so you stagnate and it becomes even harder to advance.
This power of setting expectations is evident at the very beginning of your relationship with your employer, in the offer negotiation. You haven’t started work yet, but simply setting higher expectations from the outset enables you to get paid more and begins the positive, virtuous cycle. Here we quantify the impact of negotiating using Ralph by looking at the data from our first 71 PhD clients. Most of them came from computation-heavy PhDs and were transitioning into their first industry role in engineering or data science, or a research role in technology or quantitative finance. Our results reveal just how beneficial it can be to advocate for yourself, and how beneficial a Career Agent can be to advise you through this process of multiple offers and changes. Because while most people know they should negotiate, they don’t know how far to negotiate. Our data gives you insight into just how much you’re worth and how much room there is for offer changes.
High Level Results
On average, our clients have increased their initial offer by 30% through negotiation using our insight and advising. This increase is calculated from changes in base salary, equity, and any annual, signing, or relocation bonus changes. This increase represents an average $75K more in the offer. As expected, having offers from multiple companies resulted in a larger increase from the baseline offer; however, even if clients only had an offer from a single company, they were still able to secure an average 20% increase from their initial offer. Having four offers resulted in a dramatic increase (56%) in the negotiated accepted offer.
Negotiating You Are Likely Not Doing
The majority of our clients (52%) changed their offer twice. This means they negotiated an increase once and then negotiated another increase. Usually this second change would occur after the company said no to any further changes. We were able to advise our clients to keep advocating for themselves and set initial expectations high, resulting in an average total increase of 39%. When the offer changed once, it increased on average 18%. While the majority of this data comes from before COVID-19, we have advised 9 clients during COVID-19 with similar results. Our largest negotiated offer ever was achieved in March 2020 (the story here). Our data from working with 70+ clients is clear: you can negotiate significant (and often multiple) increases in your offer if you know your true, competitive worth.
These results we hope debunk three common misconceptions that hinder a candidates' ability to negotiate a strong starting offer and set the stage for your upward growth.
Misconception #1: Companies pay equally for the same role, level, and location in a new grad offer.
We have seen two candidates with the same role, level, company, and location have a $35,000 base salary difference. We have seen equity range by more than $900,000 in a 4-year package in public company offers. We have data for new grad Google offers that start as low as ~$180K/year and end as high as ~$550K/year.
Even independent of a company's intent, if you don't negotiate you will be paid unequally because the highest paid individuals are always negotiating. The squeaky wheel gets the oil.
Misconception #2: Interviewing with one company at a time is ok.
The factor that affects your compensation the most is having multiple offers at the same time. Companies are a business. They will pay what they have to, not what they can. Our data shows having two offers increases your compensation by 5% and 4 offers increases your compensation by 56%. Companies interview candidates they have no intention of hiring just to see the market. So should you.
Misconception #3: The company increased my offer so I’ve successfully negotiated.
The majority of companies start with a low offer that leaves room for the candidate to negotiate. You should define successfully negotiating as getting a change after the company has said no. This is when the negotiation has actually begun. Otherwise, you have just asked and they conceded. There has been no negotiation. Our data shows that it is rare for an offer not to change after it is initially given: 90% of offers change from the initial offer after negotiating.
Almost all of the negotiation challenges PhDs face come from a lack of information and experience in industry. They don’t know what to expect, don’t have time to research, and assume whatever the company says is correct. As our data shows, there is room for negotiating multiple times to achieve a 30% or greater increase in your initial offer. We hope that by sharing our findings, we can help you educate and advocate for yourself and feel more confident to set high expectations even before you begin working at your company. Ask yourself the question: how do I know I am getting the best offer possible? You might be surprised to know that you are likely worth a lot more than the initial offer you receive.
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