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How can you get the job offer you want? And how can you feel confident you’re getting paid what you deserve?

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With so much confusion around salaries for remote roles, these questions are top of mind when you’re on the hunt for a new job. You need to feel confident that you’re making the best decision for your future.

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But in a world where some companies have threatened or committed to cutting salaries for remote employees, how can you build that confidence?

It’s easier than you might think. All it takes is three simple steps:

  1. Learn how companies think about compensation for remote employees
  2. Understand the market for your skills and experience
  3. Look at benefits to understand the full offer

Let’s take a look at each of these in-depth.

1. Learn how companies do the math for remote job offers

All remote salaries are not created equal. There are several common methods companies use to calculate remote salaries, with drastically different results.

As a jobseeker, knowing these different approaches can give you direct insight into how a company thinks about remote work and what your eventual employment offer might look like.

The location-agnostic approach to remote salaries

A location-agnostic approach means that a company doesn’t consider location as a factor when calculating remote salaries. People in the same role are paid the same salary, regardless of where they work from. Wildbit and Basecamp are two leading advocates of this approach.

There’s a slight nuance here, as some companies (like Reddit) have taken a countrywide approach to location-agnostic pay. With this approach, all people in the same role and the same country receive the same pay. This means if you’re a software engineer in the United States, you’d make the same whether you lived in Silicon Valley or Omaha.

The biggest benefits of this approach are that it’s simple and equitable. You’re paid based on the value you bring to the business, regardless of where you choose to live. However, the big tradeoff for companies is that location-agnostic pay is expensive, which can mean less budget to hire additional employees and potentially slower growth.

Location-adjusted pay

As you’d expect, location-adjusted pay is when your salary is determined by your location; your salary is based on the average salary range for your role in your area. This approach aims to compensate employees based upon their value and their expected expenses. It’s a balancing act, aiming for fair pay while limiting the expense to the company.

If you’re interviewing for a role at a company using location-adjusted pay, keep in mind that salaries are ranges, even when limited to a given location. Every company will default to a different part of the salary range. To maximize your offer and hit the high end of that range, come prepared to discuss examples of your experience and skills (if you need somewhere to start, try using a salary calculator based on real market data).

Custom salary formulas

The last common approach to calculating salary is to use a custom formula.

Because these formulas are custom to each company, the best way to demonstrate is with an example like Gitlab. Gitlab’s compensation formula is published in their handbook for everyone to see:

‘Your compensation = SF benchmark x Location Factor x Level Factor x Exchange Rate’

Gitlab starts by using a benchmarked salary based on San Francisco pay data. They then factor in the employee’s location, experience level, and the exchange rate to achieve what they believe to be fair compensation.

If you’re considering taking a role at a company that uses a custom salary formula, ask questions up front to make sure you understand all of the factors involved.

2. Scope out the market to know your value

Once you’ve understood how companies think about setting salaries, you’re ready to start exploring the current market for people with your skills and experience.

At Hired, we've collected real data from interview requests and job placements on our platform. Let’s look at some highlights.

Remote software engineer salaries are top of market

The pace of salary growth varies from market to market. But are remote software engineer salaries keeping up?

The data shows the answer is a resounding yes.

 

Position Market

Average base salary offered at initial interview request

 

YoY Salary Growth

2020

2021

Austin

$139K

$151K

9%

Boston

$144K

$147K

2%

Chicago

$128K

$136K

6%

Fully Remote Position

$152K

$157K

3%

London

£74K

£75K

2%

Los Angeles

$149K

$154K

3%

New York

$152K

$155K

2%

Seattle

$150K

$161K

7%

SF Bay Area

$166K

$168K

1%

Toronto

$116K

$121K

5%

Washington D.C.

$135K

$140K

3%

While some markets saw a higher year-over-year (YoY) growth rate than remote roles, the average initial salary that employers offered remote software engineers was near the top of the list (only exceeded by San Francisco and Seattle).

We can also look at the average salary offers for fully remote roles across different markets that candidates live in. In other words, if you live in Austin or New York and want a remote role, are salaries for remote roles in your area increasing or decreasing?

As you can see below, salaries grew across the board for remote roles. The year-over-year increases range widely, but on average there was a 6% year-over-year salary growth for remote roles.

 

Candidate’s Home City

Average base salary offered at initial interview requests

 

YoY Salary Growth

2020

2021

Atlanta

$145K

$147K

1%

Austin

$139K

$150K

8%

Boston

$144K

$149K

3%

Chicago

$132K

$143K

8%

Dallas/Ft Worth

$133K

$140K

5%

Denver

$136K

$146K

7%

London

£68,918

£73,370

6%

Los Angeles

$141K

$151K

7%

New York

$146K

$152K

4%

Philadelphia

$134K

$143K

7%

San Diego

$141K

$150K

6%

Seattle

$150K

$162K

8%

SF Bay Area

$161K

$168K

5%

Toronto

CAD 109,821

CAD 125,488

14%

Washington D.C.

$141K

$147K

4%

In summary, remote work can be both convenient and lucrative.

Experience is a huge lever in remote salary negotiations

One of the best ways to maximize your offer as a remote software engineer is to lean on your experience. The data shows a clear trend of higher salary offers for more experienced software engineers.

Years of Experience

Average initial salary offer

YoY Salary Growth

2020

2021

1-2

$119,109

$119,564

0%

2-4

$128,266

$132,434

3%

4-6

$142,072

$147,715

5%

6-10

$154,430

$160,015

4%

10-15

$162,827

$169,963

4%

15+

$165,352

$170,134

3%

You can’t fast forward to gain more years of experience immediately, but you can leverage your past experience by highlighting the unique projects or challenges you’ve worked on in the past during the interview process.

Overcoming big challenges or shipping transformative features can expedite your learning curve, giving you another way to max out your offer with a new company. (For more tips on how to negotiate your offer, check out this post.)

3. Consider the whole compensation picture

Salary is a huge factor for jobseekers searching for new roles. But when you’re evaluating an offer from a prospective employer, don’t make the mistake of being short-sighted.

Salary is important, but there are many other factors that will impact your long-term job satisfaction, growth, and overall well-being. To truly maximize your offer as a remote employee, also consider the many non-salary benefits such as:

  • Variable pay and bonus potential. Every role has its own pay structure, but do you know if you’ll get paid more if you’re successful in your role? Bonuses and variable comp can turn a good starting salary into a great one.
  • Equity. Equity gives everyone a stake in the company’s success. If the company is successful, how will you benefit from it? It’s common for tech companies to offer equity in the form of restricted stock units (RSUs), incentive stock options (ISOs), employee stock purchase plans (ESPP), and more. If you need help understanding your equity offer, Carta’s equity 101 series covers the basics well.
  • Flexible work options. Flexibility enables you to shape your work around the rest of your life. To evaluate a new role’s flexibility, ask about things like expected working hours, mandatory meetings, and communication norms. Do you need to be online at certain times? Is it a meeting-heavy company? Have they developed processes to prioritize asynchronous communication and work?
  • Healthcare. Health insurance is an expectation for most employees now, but all healthcare benefits aren’t created equally. When evaluating health, dental, and vision insurance, take a close look at the coverage details and costs involved. Poor insurance can cost you thousands of dollars per year (more if you have a medical emergency), so do your homework up front to maximize this benefit.
  • Parental benefits. Since parental leave isn’t guaranteed in all countries, a generous parental leave policy can be a huge bonus to a job offer. Some companies may also offer other parental benefits, such as fertility benefits, childcare savings accounts, or adoption assistance.
  • Wellbeing benefits. Insurance is a big part of your total wellbeing, but some companies offer supplemental benefits that make a big difference. Partnering with companies like Modern Health allows employers to offer therapy, coaching, and other resources to ensure your overall wellness for the long-term.
  • Home office stipends. It’s becoming increasingly common for employers to offer remote employees ‘work from home’ stipends so they can kit out their home offices with equipment to help them thrive. These stipends can equate to thousands of dollars, making them a valuable piece of your employment offer.
  • Training and development budgets. While you can get on-the-job training at any company, some double down on personal development through providing employees with training and development budgets. Whether it’s a subscription to a platform like General Assembly, Educative.io, or a reimbursement program, these benefits can have a major impact on your career.

Reflections

Many of these things can be difficult to put a number on. But if you don’t do your due diligence to answer these questions before taking a new role, it’s possible you’ll regret it later. Maximizing your offer as a remote engineer isn’t just about money. It’s about you. It’s about finding the role – including all of the aspects above – that maximizes your chances of realizing the satisfaction, growth, and success you’ve been looking for.

To learn more about the tech job search as a remote candidate, register for the Hired Summit. This one-day virtual event exists to help tech candidates connect with the world’s leading companies hiring remote tech talent.

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Episode 02 What top companies are looking for in a great remote technical interview
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Episode 04 How to stand out behind the screen: A guide for remote candidates