An Undergrad's Guide To Salary Negotiation

Note: the information below is based on my personal experiences and some of my friends whom I have talked to recently. This post is focussed on Graduate Software Engineer or SDE-1 roles.

Eventually there comes a point in your career where you will have face questions like:

  • "How much salary do you expect for this role?"
  • "How much salary was/is your past/current employer paying you?"
  • "How much did your friends get in their PPOs?"

To be able to answer these questions you need to be able to:

  • Be aware of the salary trends across different companies for the role that you are applying for.
  • Have a little confidence in yourself, if they are looking to hire you there is always some room to negotiate a higher salary.

Firstly you need to do some research as to how much various companies pay engineers fresh out of college. I mostly use Glassdoor to look these up but you should also try Linkedin's salary insights and Paysa for companies based abroad. Most of these salaries can be average or outdated so consider these numbers as an approximation. You will see roughly 4 base salary brackets:

  • 4-8 lakhs (these will be mostly mass recruiters like Infosys, Dell, I remember seeing one DirectI posting with a 6 lakh salary which was shocking)
  • 8-12 lakhs (this space would be mostly filled by young Indian startups that have acquired some initial funding)
  • 15-20 lakhs (established Indian startups, open source startups, and Giants like Apple, Microsoft, Amazon; got these numbers from Linkedin salary insights)
  • 20+ lakhs (mostly unicorn startups, or established remote open source companies that can pay you in $$$)

Category 1 companies are mostly evil so salary negotiation is out of the question. Since I only have experience of working/interviewing at companies belonging to the other 3 categories I will be talking about them instead. Category 2 companies will probably not be able to give you a higher salary than what they have already offered since they are usually struggling to survive and trying to burn as little money left in their account. You can always try negotiating but there is little hope in this case.

Category 3 and 4 is where you have some room for haggling. Most of these companies will have a solid VC funding or a steady stream of revenues or both and the team size will be small compared to the scale at which they operate, it can be anywhere from 20-300 people in the org, so they try to hire the best engineers and are willing to pay competitive salaries. Salary structure at these companies consists of

  • Base salary (what I have listed above): This is the most important since this will be your steady source of income. You might be asked questions like the ones listed at the start of this post. If you have been interning at such companies and they want to convert you to full time or if you have been interviewed by them and they are interested in offering you a job then you know that you are worth 15+ or 20+ lakhs and can ask for that much. If you have been interning at this place then try asking any of the current employees their salaries (most of them won't tell you but still try) if you are friends with them or interns who might have been offered the job, this will help you make sure that the offer that you are about to receive is the same as your peers. If it isn't, if you were offered a lower salary than your peers without any explainations then this can be a red flag, since the company is not transparent about their salary policy. So try and negotiate and ask them if the 15 can be turned to 16-17 lakhs.
  • Health insurance: You can simply buy your own health insurance and it won't cost you much but if your companies usually offer good plans that can cover you and your family and are around 3-5 lakhs. So it's not really that important but if you are ever stuck between similar offers (assuming that you are interested in the work being done by both companies) you can take insurance as the second most important factor to make the decision.
  • Equity: If your company hasn't gone public yet then this is of zero value. You may never know if your company will go public or be acquired by some other larger company so you will probably never be able to turn these shares into cash. In case you are working for a large conglomerate like Amazon or Google which are already public, the equity that you will be offered will be worth a lot but will have certain restrictions for e.g. you will only be able to cash it out if you work at the company for X number of years. So if you don't see yourself at this company long term then don't really worry about equity.
  • Other benefits like reimbursement for books, courses, gym, etc. With the kind of money that you will be making these won't really matter, treat them like free goodies.

Note: Large conglomerates publicize their compensation packages including all of these benefits and stock options along with the base salary. So in case someone tells you they got a 40 lakh package at Microsoft that actually translates to 18-20 lakhs of base salary + rest in stock options and insurance (got to know this from a friend of mine who got the exact same offer). The same goes for all the other 50 laakh and 1 crore packages that keep hearing about in the news.

So that's it, you should know what you are worth, keep tracking the salary trends in the market and in your network of developers and don't be shy/afraid of negotiating for a better package.

Palash Nigam
Software Developer Intern

OSS developer interested in PL & distributed systems.

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