Negotiating Compensation

14 minutes, 9 links

You’re reading an excerpt of Land Your Dream Design Job, a book by Dan Shilov. Filled with hard-won, personal insights, it is a comprehensive guide to landing a product design role in a startup, agency, or tech company, and covers the entire design interview process from beginning to end, for experienced and aspriring designers. Purchase the book to support the author and the ad-free Holloway reading experience. You get instant digital access, commentary and future updates, and a high-quality PDF download.

Negotiating Compensation

Start with the end in mind. Before entering a negotiation, think through the factors that are important to you now. You don’t have to have a five-year vision—not many do. But having a solid plan for your next year, what you want to learn, and the type of work you want to be doing will help you meaningfully make trade-offs.

Not a Zero-Sum Pie

When we think of negotiation, it’s not unusual to think of it as a zero-sum game. One player takes most and another is left with less. But that’s a losing proposition. You should reframe a negotiation as a conversation to come up with a win-win situation for both parties. This will lead not only to a good short-term outcome for you but also to long-term goodwill down the road when your next assessment comes.

important A good negotiation should feel like a productive collaboration between two teammates.

Stay enthusiastic about the role throughout the negotiation process as you’re building rapport with the recruiter. Thank them for the concessions as you’re approaching the offer together. Mention that you appreciate their willingness to listen and be flexible. Graciousness goes a long way—don’t miss an opportunity to make the other party feel fabulous. You’ve already built trust throughout the interview process; use the negotiation as a way to further reinforce your goodwill.

In turn, be willing to listen. Empathy is a designer’s master skill. If you can truly understand their issues, and the true issues behind those, you can come up with a creative way to solve the compensation problem while putting them at ease and moving closer toward your end goal.

important Practice negotiating. This is a difficult and crucial conversation. Sometimes you might trip up and not get the right words out during a crucial moment in negotiation. Do a mock interview with a friend. Dedicate a little time here, where the stakes are low. With practice, the negotiation will feel closer to a natural conversation, allowing you to think and respond quickly with empathy and enthusiasm.

Understanding Your Level

Your total comp is determined by a company’s leveling framework. The more senior you are, the more experience you have, the more money you’ll get. At higher senior levels your compensation will be predominantly based on your performance and will be closer tied to your equity.

In certain organizations, being brought on at a certain level sometimes acts as an anchor. That is if you’re starting out at mid-level you may need to prove yourself for a long amount of time before getting promoted to a senior role. That said there is also a risk of coming in at a level that’s too high or setting yourself for a bar that you cannot meet.

After you join the company, the leveling document will be used as objective criteria to evaluate your performance and determine whether you’re not meeting, meeting, or exceeding the criteria set forth. While the common hustle advice is to “fake it ’til you make it”, sometimes there is no making it. Instead you’d be better off in a place that strikes the right balance of playing to your strengths while giving you an opportunity to grow without so much stress that you’re not able to do your job.

Every company will have their own leveling guide which in great detail shows what one needs to do in order to perform at a certain level.

Table: Individual Contributor Design Levels

LevelExperienceExpectations
Associate (L1-L2)Experience primarily comes from academics or bootcamp. This is usually an intern or a co-op position.Just starting out working in design in a professional capacity. Able to take direction.
Mid-level (L3-L4)Usually a university graduate or someone with a few months of experience from previous internships.Strong grasp on fundamentals developing collaboration skills, taking on projects of increasing complexity. Operates at a team level.
Senior (L5-L6)Usually about 7–8 years of work experience.Defines and reframe problems, gets to the heart of the matter, reliably comes up with strong solutions without supervision. Operates at a department level.
Staff or Lead (L7)8+ years of industry experience but at this point the years of experience matter less than impact.Usually leads a team of designers under them, creates new frameworks, comes up with ideas that solve multiple problems. Operates across departments.
Principal (L8)Same as above.Created new brands, potentially defined industry trends, leads the company with other C-level counterparts.

Leveling will differ by company and one company’s L5 is another company’s L4. Resources such as levels.fyi are helpful in understanding how one’s level transfers over from one company to the next. Companies also usually break down role titles into granular levels. These levels are usually not exposed externally (e.g. Product Designer II) but they are important internally as they assign you to a specific band that’s tied to salary.

Figure: Levels FYI Design Levels

Levels FYI design levels

Companies level designers differently but in general they all follow a similar trajectory. Source: Levels.FYI

Make sure you do your research, learn what other companies pay for the band you’ve applied for. Beyond the numbers, peel back the layers. Is there additional know-how you can get on the compensation conversation? Is the company uncompromising on baseline salary but flexible with stock options? Blind is a good resource to look into this info.

You won’t have all perfect info at the end of the day but closing some gaps of this knowledge will put you in a stronger position during the negotiation.

Demonstrate Your Strengths

Negotiation starts when you first start applying, so look for opportunities to reinforce the unique skills and knowledge that you bring to solve a specific pain (or multiple pains) for the company.

storyWhen I was applying through job boards (which is one of the worst ways to apply, by the way), I was able to score an interview at a well-known tech company due to advanced prototyping that I’d done previously. It was demonstrating the work in-person and letting the interviewers use my prototypes on their own that helped land an amazing offer.

Think of negotiation broadly. It’s not something that happens just at the end—a strong start can make a huge difference toward your final comp and leveling. But let’s say you already are at the end—it doesn’t hurt to reiterate the unique value that you bring.

important If you want to get compensated highly, you need to understand a company’s key pain points. Show that your unique strengths can resolve these issues.

Inevitably you will get pushback around cost, but reframing the discussion from cost to an investment for the company will help you steer the conversation in the right direction.

Use Multiple Offers to Your Advantage

If you’re in a lucky position to have multiple offers, be sure to compare and contrast. Talk with the recruiter about matching your highest offer’s salary. At this point you have some advantage here, as a company would hate to lose a qualified candidate to a competitor. Beyond salary, you can negotiate equity or maybe sweeten the deal with a one-time signing bonus.

Understand that interviewing candidates is a long process. They’ve just gone through rounds of writing the job description, reviewing candidates, going through phone screens, and getting designers to spend their time interviewing you and other candidates. Finally, they narrowed it to one offer—yours. This whole process usually takes money and time, and time is the most painful factor. They’d rather not go through a month and a half of work again.

important If you don’t have multiple offers outstanding—don’t let this deter you from negotiating. Even starting the compensation negotiation process already increases your chances of getting a favorable outcome.

Accelerate the Interviewing Process

Sometimes you’ll end up in a position where you’re still interviewing at one company but you’ve already got an offer at another. Be sure to let the company who’s still interviewing you know that you’re already at the offer stage elsewhere. This adds a bit of (valid) pressure on them to accelerate the interviewing process. Ideally, as early in the process as possible, let the other company know that you’re late in the interviewing cycle with someone else. This will help you line up all your offer letters at the end.

What if There Are No Other Offers?

Lastly, you might not have any offers outstanding or anything to match against. You may even be out of a job, so anything will look good right now. Alternatively, you might get an offer from a place where you’d love to work and the starting salary is already high. What do you do? Two things—conditionally agree or restructure your offer based on things critical to you.

Conditionally Agree

The first step in negotiation is understanding the needs of your client. Since you’ll be working closely with a recruiter and they have a quota to fill, you can assure them that you’re serious about the offer by saying you’ll accept it right away if they can get you X. X can be anything that’s important to you and is not just restricted to salary.

Saying no can feel like placing an ultimatum. As we’ve talked about earlier, a negotiation is like a conversation (but with high stakes). If you’re getting close to what you hope you’re getting, you can say no in a non-confrontational way—“Thank you for showing flexibility on salary, this seems appropriate. Could we talk about other things that factor into compensation?”

Again, this will reinforce the image of your flexibility and allows you and the other party to examine compensation in a safe way.

When Your Dream Job Won’t Budge on Comp

You’ve played your cards right, done your homework, and negotiated with multiple offers, but still the company won’t budge. Hey, at least you’ve tried and you’re still ahead of most folks who don’t even ask. You still have a couple of options.

Shift Amount of Salary versus Equity

If you’re negotiating with a startup, the company simply may not have the money to give you a higher salary, as everyone is already taking a pay cut. Potentially, this is an opportunity either to ask for an increase in equity if you think your compensation package isn’t in line or to better understand how subsequent rounds of raising money will affect your compensation.

Finally, as a method of last resort you can also scale down salary in favor of equity or go the reverse route and ask for more cash with a lower equity stake. In doing so, you need to understand how this will impact your future performance reviews. Are you only going to be compensated with raises in extra cash, or can extra equity come into play as well?

Focus on Growth

Regardless of where you are in your career, optimize for growth. Given the choice between a job that pays slightly more and one that helps you grow more—go for the latter. It’s easier to negotiate for a raise or a higher salary when you have the skills and the results to back it up.

So how can you negotiate for growth? Bring up the fact that you’re excited to learn and contribute on key projects. This could be access to key individuals (mentors, for example), specific projects, or teams that can be high impact. These things may cost little to nothing for the company, while giving you long-term potential for your career.

Final Words on Negotiation

When you’re joining a company, you’re not just getting paid—you’re also buying into their culture. Ideally, you’ll end up in a place that has good salary, good work, and good people. The day-to-day will be far more important to your long-term sense of achievement and success. If you’re always stressed about the commute, or if it feels like the co-workers don’t have your back, it will eventually translate to not just worse performance—it will ultimately lead to burnout, forcing you to look for another job.

important Negotiation is a critical skill for designers. It’s not just something you magically get better at during a few critical moments where it counts. We don’t get to practice it as often as we need. Aside from practicing, it helps to learn what to practice. If I had to recommend one book on negotiation, it would be Never Split the Difference. Written by an FBI hostage negotiator, the tactics are made applicable to many areas of life, “in the boardroom or at home.”

Additional Resources

To learn more about design levels and how various companies structure them:

  • Intercom’s individual contributor design levels and design manager levels, in addition to being open available and detailed, have specific objectives and growth tasks tied to each level.

  • Basecamp’s Titles for Designers. Although Basecamp is a small company by startup standards, their design framework is rigorous. Aside from describing what are the different expectations of designers, it also publicly lists the names of designers at those levels.

  • DoorDash’s Head of Design, Helena Seo, shares her thinking and approach toward creating a leveling system at the company.

  • progression.fyi, a collection of open source company ladders, includes some for design, such as BuzzFeed and Zendesk, among many others.

Leaving Your Job on a High Note

You’ve accepted an offer, negotiated it, and now all that’s left is to tell your current company that you’re moving on. First off—congrats! Success in design is often nonlinear. It’s not about going to an expensive university to end up working for a prestigious company. Great designers know that. They’ve oftentimes experienced different cultures, worked with different people, and have seen industries shift. They understand that you can’t learn everything in one place.

Here is how you can quit well, set your current team up for success, and prepare for your next opportunity.

Finishing Strong

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