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How to Negotiate when Hiring Developers

14 July 2022 , by Adriaan Venter

Negotiating in an interview can be hard, not to mention potentially awkward, for both parties – but this doesn’t have to be the case. When hiring, the challenge lies in striking a balance between attracting top talent for your team, and not breaking the bank. At OfferZen, we see every day how companies successfully navigate these tough conversations. Here are some of the tips we have collected to help you feel more confident.

how to negotiate with developers

As part of my job, working with companies to grow their tech teams using OfferZen, I get to see difficult conversations play out every day. Negotiating salaries during the interview process is one of the most common pains for both companies and candidates, and there are a number of reasons why this is the case:

  • The asymmetrical nature of the relationship between the people having the conversation: In other words, power and knowledge are not distributed very equally – or at least, that is how it gets perceived. Candidates typically know very little about your organisation and its processes, and are expected to share every aspect of themselves with you. Because you are the one that makes the offer, candidates automatically see you as holding more power than them.
  • Both sides think they’re the one with the disadvantage: Operating within the tech industry, where tech talent is in short supply, both employers and candidates feel like they’re the ones at a disadvantage. Candidates think companies have the final say to hire and fire (i.e. their ‘fate rests in their hands’), and companies feel that developers have plenty of other options waiting for them at the door.
  • Money is a taboo subject in society: Typical societal taboos warn against ever even mentioning money. No one wants to be the one who brings it up. However, sweeping it under the rug until the last possible moment is when a miscommunication can cause the most damage.

On top of all of this, you’re trying your best to find and isolate reliable signals about whether or not you’re making a good hire, and simultaneously promoting a positive candidate experience – it’s not easy. Trust me, I see this a lot.

To help address this, we’ll take a look at some practical advice for how to handle these types of conversations in a way that gets A-grade results and promotes a good employer brand.

The things we’ll cover include:

  • Establishing a range, and asking upfront
  • Being flexible
  • Remembering that you have other negotiation options
  • Expecting/encouraging negotiation
  • Always practising good “offer etiquette”

Step 1: Establish a range, and ask upfront

When negotiating salaries, it is best to address it as early in the process as possible. To make this easier, consider giving some thought upfront to what your lower and upper bounds are in terms of the salary you could offer for the position at hand.

Even if you’re not nailing down specific numbers, it’s really important to get an idea of the rough ballpark that the person who you’re hoping to interview is considering as this can save you a lot of time.

No one wants to spend hours interviewing and assessing someone, sending them an offer, and only then discovering that they wouldn’t consider changing jobs for anything less than double what you offered.

The good news is that this kind of situation is super easy to avoid by simply doing some due diligence upfront. There’s nothing wrong with asking somebody in your first communications with them about what their monetary expectations are.

If there’s an obvious mismatch, you can give the candidate this feedback, end things there, and move onto the next profile without wasting anybody’s time.

Step 2: Be flexible

Once you’ve established what an acceptable salary amount would look like with your candidate, you’re set to go ahead with the rest of your interview process.

After you’ve conducted your culture interviews and tech assessment, and it looks like the person is the right fit, you can start putting together an offer. Since you’ve already established some salary alignment, there’s a good chance that they’ll accept. If they don’t, you can start negotiating towards a mutually beneficial agreement.

Note: If their counter-offer is still within the range that you considered upfront, it’s usually a good idea to meet them halfway and end the negotiations right there. Otherwise, you’re setting yourself up for a lot of back-and-forth.

Keep in mind that your primary goal isn’t to get a bargain, but rather to build as high-performing a team as possible.

Saving a bit of money on salaries might feel good for a while, but hiring somebody who feels like a valued contributor from day one can have a greater long-term impact. It’s very easy to point out the potential drawbacks of counter offers, but if a person is looking for an increase that already fits within your established range then it’s easy to argue against the ‘down-sides’.

If someone is looking for more than your upper limit, you can be honest and tell them that – while you’d love them on your team, and are sure they would be a great fit, you can’t offer more than you already have.

Remember to keep the door open should they change their mind, and remember that there is more to the way you package a job offer than ‘just the money’…

Step 3: Remember that you have other negotiation options

If you’re negotiating with a candidate and find yourself in a position where you’re not quite able to match the financial component of their request, remember that money isn’t everything.

Information lies at the heart of any successful negotiation. Knowing what a person values allows you to make your offer more appealing without necessarily adding any additional zeros to your offer.

If you get a sense that the candidate is fixed on their proposed number, try highlighting the other perks that come with working at your company. There are plenty of people in the world who are looking to change jobs not because the pay cheque isn’t as big as they’d like it to be, but rather because they’re looking for more flexibility in their working arrangements.

If you can offer a candidate a package that provides a well-rounded working experience, you’ll probably be able to change their mind about how much money they’re looking for.

Some initial questions to consider when proposing an offer that highlights culture perks:

Is the person potentially needing to move in order to take the job?

Try suggesting a relocation allowance to help that process along.

Is levelling up and learning new skills important to them?

If so, emphasising the existing upskilling opportunities that they can participate in should they accept your offer is probably a good idea. And, if these don’t exist, this might be a really good opportunity to lobby for getting them set up.

Good negotiation requires a great deal of creativity, and thinking beyond rands and cents almost always pays off.

Step 4: Expect/encourage negotiation

Instead of assuming that the offer you made is ‘probably good enough’, take the opportunity to really make sure that you’ve given them something that they consider to be the offer of a lifetime. A real concern that many people have when receiving an offer from a company is that it’s ironclad and they can’t negotiate any of its terms.

There will often be one or two lines in the standard offer that might not be 100% in line with what a person is looking for. Although it’s tempting to say it’s ‘good enough’ and avoid the conversation, our goal (remember?) is building a top performing team. So, it’s clear that we should be aiming to get on the same page and make sure both parties are happy.

The easiest way to accomplish this is to not only expect a person to negotiate, but to actually encourage them to do so.

When you make an offer, get the person on the phone or on the other side of a cup of coffee and read through the offer with them. This allows you to ask them directly: “Are you happy with all of this?”

A simple question can go a long way towards eliminating the negative stereotypes around negotiation, and will signal to the person that you really care about them being happy in the long term.

Remember that a candidate discussing the details of the offer with you is potentially the strongest signal that they are considering it. Don’t punish people for being entrepreneurial, and if there isn’t any wiggle room at all (even after considering non-monetary factors), you can still thank them for how seriously they’re taking the discussion before letting them know that you can’t make any further adjustments.

Step 5: Always practise good “offer etiquette”

Here’s a scenario:

You’ve just read through a technical assessment that is the closest thing to poetry you’ve ever seen committed to GitHub. This person also aced both of their previous interviews, so you’re feeling pretty excited about having them potentially join your team. Before they can start knocking out features, however, there’s still the small detail of them accepting your offer. You want them to start as soon as humanly possible, so you send through the paperwork and tell them confidently (via email) that you need an answer by the end of the next business day. Although you think they shouldn’t need more than a couple of minutes, you ‘generously’ give them 24 hours…

The example above should hopefully seem pretty extreme, but the mistake of insisting on unrealistically aggressive deadlines for people to accept an offer happens every single day.

‘Exploding offers’, as they’re often called, normally function to inject some kind of urgency into the person’s decision making process. But in reality, I see them result in missed opportunities about as many times as they result in accepted offers – and even then, there’s a higher chance that the candidate reneges on your offer, to take up another one they were still busy considering that doesn’t pressure them into a corner. It might raise flags for them, that you’re desperate to hire, or that everyone else in your candidate list has said no and they are your last hope.

In the competitive hiring market, many of the candidates you’re engaging with will be approached by a number of companies. Don’t forget that the goal should be to build an awesome team of people, excited at the prospect of contributing to your mission, and not a group of people who accepted an offer in a hurry because they felt pressured , and now regret ever saying “yes”.

Rather than insisting on what is often a relatively arbitrary deadline by which the person needs to give a concrete answer, inject some empathy into your process and engage with them directly on the topic. One way to do this is to simply tell them that you’re super excited to have them on the team, but you’ve interviewed a few other candidates who were also really good.

For this reason, you need a solid answer over the course of the next couple of days/weeks on whether they will accept your offer, because otherwise you need to make an offer to another person.

Something that I have seen work really well in these kinds of situations has been to ask the person how soon they would be able to give you an answer as they’ll most likely stick to a deadline that they came up with themselves.

Preparation and empathy are key

As a closing thought, two of the biggest contributing factors towards offers that people are excited to accept are preparation and empathy. Dedicate some time up front to figuring out what your salary constraints and non-monetary perks are then, follow through by encouraging and practising good faith negotiations with the explicit goal of putting together an offer that benefits both parties.

Something that a lot of companies have found success with is to build a process where your main aim is that every single person you interview – regardless of whether they are even made an offer at all – walks out of your offices thinking: “Whether I take this job or not, this seems like a great place to work.”

By building a great hiring process like this, you’ll not only increase the number of people that accept your offer on the first go, but you also broadcast to everyone you interview that you are an awesome employer.

Adriaan Venter works with companies on OfferZen to help them level-up their tech hiring. He spends his free time drinking strong coffee, contemplating the mysteries of the universe, and playing games on the internet with friends and strangers alike.

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