A person new to the Data Science field details their salary and the negotiation process.
In this post I want to talk money. What I used to make, how the offer/negotiation process went and some tips for doing your own negotiation. When I was looking for my first job fresh out of college I had no idea how much money to expect. I didn't know if it was going to be closer to $40,000 or $100,000. Hopefully this post will not only give you some actual numbers for context but also some strategies for maximizing your next salary.
When my first company offered me $65,000 a year I happily accepted. It was a hell of a lot better than anything I had made as a grad student. I think even today that salary was reasonable for the region. But as many of you probably know, it's abnormal to get raises much higher than 3%. In my case the first raise was pro-rated and was around 1%, then I got 2.9%, and then the third year supposedly had a company-wide salary freeze. I remember sitting in my cubical making salary projections on the 3% a year assumption and being sorely disappointed with how old I would be and still under the 6-figure mark. If you asked my 18 year old self I would have already been a millionaire, so something was seriously wrong!
Spoiler alert: You have to leave your company. You don't have to change fields, but change companies. If you don't believe me, just wait around a few more years until they hire a person with the same or less experience as you from a different company, who doesn't know squat about what you guys do, but makes more money than you. If you're lucky you might get a promotion and can expect 10% salary increase, but that's far from a sure thing. Most people don't have the guts to quit their job and/or are too lazy to continually look for a new one and that's why they will get paid less than they're worth. Don't be that person.
I think the initial $65k was reasonable because I was a risky prospect as a fresh grad. After a year or two of solid performance, you have eliminated that risk and that is worth a lot more than 3%, so shop around. I can't tell you how much to expect, but I have heard anecdotally from multiple people that their biggest career increases came from the first time they switched companies.
I can tell you what happened in my case, however. Your leverage is obviously dependent on your industry and particular details, so your experience may differ. After many dead ends and never hearing back from many, many applications, I ended up getting an offer for $95,000, a full relocation package, a $3,000 sign on bonus, and around $8,000 in "moving/traveling expenses" that ultimately was just cash with no restrictions. For context, this was in the Dallas/Fort Worth area.
I was very happy with this offer. At this point I had quit my job about 4 months prior, went from a salary of around $75,000 to $0, had a mortgage to pay, and no other serious leads. I did have, however, a few long-shot options at really cool companies so I didn't want to just jump in on the first offer. I had learned enough to know that they had already put considerable cost in recruiting me and if they were making me an offer, I was in a good position.
I'm not going to claim to be a negotiation expert because I'm far from it. It's uncomfortable for me. But when dealing with a large organization, you must keep these three things in mind:
You will never have more negotiating power than you do at this moment, so don't waste it.
You will never make so much money per hour as you will through a few minutes of negotiation. A few minutes can equal several thousand dollars, which is like a year or two's raise.
5 or 10 grand more is substantial to you, but is practically trivial to a big organization and this means the manager doesn't have a strong incentive to be aggressively firm.
They may be trained professionals that do this every day, but you still have the upper hand and would be a fool to not try to get more, especially in a high-demand market like in Data Science. A few tips:
Don't Give a Number First!
Never, ever, ever tell them how much you make in your current or previous jobs. Also don't be the first one to say how much you want to make in the position of interest. For God's sake don't give any number that gives them any information of salary. They will try multiple times and explain to you over and over that it will have nothing to do with their offer, they just need to fill out a form, or see if it matches the range of the position, or blah, blah, blah. Just politely say things like, "My income history is private but I'm confident your company will give me a fair offer if it's a good mutual fit."
Do whatever you can to delay the talk of money until after you have received an offer. Every once in awhile you'll get someone that's really forceful in which case you should cut your losses and move on. I remember having to eventually tell one guy, "I'm not comfortable talking about my past salary and if that's a deal breaker then I'm not interested in moving forward." You must realize that this is a tactic they are using to get you as cheap as possible and anything else they tell you is bullshit. They're trying to undermine your negotiating position later in the process. All will probably try it, but you want to avoid the companies that are trying to aggressively bully you. Be strong!
Don't Immediately Accept
Never accept an offer as soon as it's given to you, even if you're happy with it. Do not break out in smiles, giggles, or high-fives. Say, "Hmmm. I appreciate the offer, but will have to review it with my family and get back to you." Don't let them use bullying tactics like pretending the offer has some kind of 24 or 48 hour time limit on it. Arbitrary deadlines are a deliberate psychological tool designed to get you for less.
On the other hand, feel free to immediately reject an offer that is not suitable. Before going into an interview or a discussion that might lead to an offer, you should have two values in your back pocket: 1) the big number you're going to pretend to demand along with a rationale for how you arrived at it and 2) the lowest value you would actually accept. If the offer is lower than your lowest, tell them that you're disappointed with that and were hoping to get closer to the big value because [your rationale here].
They will likely say that's too much for reasons X, Y, and Z and come back with another value. If it's still too low, feel free to counter again. But if you get an offer worth considering always state that you need to review it with your family (because who can disagree with that) and then come up with a response when you're not under pressure.
Ask for MORE
When giving a first counter-offer always ask for substantially more money than you think you will get and have some reasonable analysis for how you got to that value. Furthermore, make your counter-offer to be a number that is oddly specific. Don't say you want $120,000. Say you want $126,450. It's a psychological tool that gives the impression of exactness. You will likely not get this max value, but it sets the post. Better for them to set the first one and you move it further than for you to set the first and them move it lower.
Show you have Options
Make sure you have said on multiple occasions that you're in talks with other companies. This should be true by the way, don't make things up. You don't have to go into details, so it doesn't matter if you just had a screening call that led to nothing, but the image you want to sell is this: You're expecting a lot of money and you're confident you'll get it, but you're so interested in their company that you want to continue the conversation because you're confident the money part can be agreed upon once they see how perfect you are. Be enthusiastic and confident. Do not come off as desperate.
Don't Get the Call, Make the Call
Assuming you're not getting the offer immediately and instead are dealing with a person via the phone days later, don't let a call catch you unprepared. If you're not fully prepared and feeling psychologically strong and confident, tell them it's not the best time and ask if you can call back. The best case scenario is you can call them whenever you're ready and potentially catch them in a less prepared state, but arranging a specific time in the future is also an improvement. This will be a very important conversation, so don't take it on when you're not both expecting it and fully prepared.
I tried to do these things. I deliberately delayed accepting offers because I really did have some interesting lines in at cool companies and wanted to see how things panned out before accepting. It could be my imagination, but I feel like this made them a little uneasy and probably resulted in a higher initial offer than I would have otherwise gotten.
For numbers, I happened to know a friend that got hired on to her first data science job at $104k (with bonuses) and she was fresh out of school. I also knew a family member that's 10 years older than me made around $135k at a major tech company as a software engineer. So I applied the 3% rule to both cases: I added my years of experience to the salary of the first person and subtracted the extra work years from the second person's. The two numbers were close so I averaged them and came up with something like $120k.
I ended up saying I was disappointed with the first number and was hoping to get $121,700. I then detailed why I thought that was fair. Their counter was a flat $100,000, but increased my signing bonus to $15,000 and annual bonuses that averaged ~$9,000/year. Given that I was happy with the first offer, I was definitely happy with this offer and (after reviewing with my family) accepted. I got a 5% raise by doing one simple math calculation and having a 10 minute phone call. Given that merit increases are for a year of work already completed, I would have worked for 2 years before seeing that extra money, and that doesn't include the extra $12,000 up front that I didn't even ask for.
To recap, I got a 25% raise over my old job, a summer off work, a sign-on bonus that more than compensated for my lost salary, home sale assistance that paid for all closing costs/realtor fees (which was about $17,000), and another $8,000 cash in "moving expenses". And for context, right before I quit my prior company I learned that, once again, there would be no merit increases for the previous year's work. This is why it's so important to consider your opportunity costs.