Big Tech negotiation
by Josh Doody
Microsoft salary negotiation is unique because the offer you get is often very dependent on the level you’re assigned. Anecdotally, it also seems that one of the more prominent benefits espoused by Microsoft recruiters is the work-life balance at Microsoft is more relaxed than at other big tech firms. This means their offers are sometimes not as strong as other big firms, and they focus more on “fit” as they look for the right people to work with their teams.
The good news is there is often flexibility in Microsoft’s job offers, and that flexibility is found in typical places—base salary, equity, and sign-on bonuses—as well as in the level of the job itself.
If you have a job offer from Microsoft for a technical role like software development engineer or hardware engineer, negotiating it up front is the best way to ensure you maximize your starting salary and set yourself up for long-term success by starting your Microsoft career at the appropriate level of responsibility.
Once you actually get through the Microsoft interview and matching process, you may receive a job offer. Let’s look at an example to see what you can expect.
Microsoft’s offers are pretty standard:
Implicit in the offer is one more key component, which could be crucial for your negotiation:
They may also include other components like a Target Bonus, and they may even share an estimated value of other perks that Microsoft employees get.
They will often roll all these numbers together to describe the offer in terms of “Total Compensation”, which may seem like a big number.
Here’s an example taken from a modified version of a real Microsoft job offer from one of my clients (all numbers are $1,000s):
|Component||Year 1||Year 2||Year 3||Year 4||Total|
Let’s look a little closer at the main components of a Microsoft job offer.
As with most job offers, this is the stable, predictable component that you can use to pay your mortgage or car payment. You can’t know what company performance might look like in the future, so it’s hard to estimate how much of a bonus you’ll get or what your RSUs will be worth when they vest.
Microsoft’s base salary offers tend to be pretty competitive with other big tech firms. If you’re wondering whether the salary you’re offered is competitive, blind and levels.fyi are good places to start.
In my experience, Microsoft will move on base salary by a pretty decent amount. This is somewhat unusual as other big tech firms are often very stubborn on base salary. They’re generally more flexible when you have not disclosed salary history or expectations.
Asking for more base salary can sometimes produce pretty good immediate results.
The equity component of a Microsoft job offer may often begin fairly low relative to base salary, but can often be negotiated up quite a bit relative to the starting point.
In general, it seems that Microsoft takes a more wholistic approach to their job offers, balancing all of the components together to construct the right offer. Equity is one part of their offers, but it doesn’t tend to dominate Microsoft offers like it does at some other big tech companies.
Potentially very flexible relative to the initial-offer baseline, but that’s largely because their equity offers can sometimes start out as a relatively small component of the overall job offer. Occasionally, the equity component can be improved by multiples of the original equity offer. This is partially because Microsoft is flexible on equity, and partially because their equity component often starts relatively small when considered as part of the entire package.
Even if there’s not a sign-on bonus included with your initial offer, there may be one available. sign-on bonuses, like equity, can range from a nice little amount into the mid-to-high five figures (and possibly higher).
I like to think of the sign-on bonus as a way to help bridge the gap between your first paycheck and your first RSU vesting date.
Pretty flexible, although they may split the sign-on bonus into Year 1 and Year 2 payments. In our example above, the sign-on bonus component of the offer is $30,000. It may eventually be negotiated up to $50,000, but the additional $20,000 may be paid out in Year 2 as an incentive to stick around.
Most big tech companies have a pretty straightforward pay structure that is more focused on “level” and less focused on job title. Microsoft seems to focus slightly more on fewer job titles, which often have multiple levels per title.
For example, a Senior Software Development Engineer could be at a Level 63 or Level 64, meaning an engineer could be promoted to “Senior” at a Level 63, and then receive another promotion to Level 64 while retaining the same “Senior” title.
Each level has a pay range associated with it, and the higher levels have higher pay potential and higher performance expectations.
Pretty flexible for the right candidates. For outside candidates, recruiters are often guessing as to which level is appropriate, and they will tend to slot an external hire into the lower level to give them a chance to acclimate to the Microsoft way of working while demonstrating proficiency at the lower level.
This gives them the option of rewarding exceptional candidates with a promotion to the higher-level version of the same job title if they perform well. But candidates can also persuade their recruiter that they should start at a higher level, which typically also means higher starting pay.
The salary negotiation with Microsoft will begin earlier than you might expect.
Your Microsoft recruiter will often ask for your salary history, or at least your current salary if it’s legal where they are. Do not tell them your current salary. If you do, the base salary component of your job offer will probably be slightly above your current salary and it will be challenging to negotiate a substantial increase once they make your job offer.
They will also usually ask for your salary expectations. That request will sound something like this:
So what were you hoping for in terms of compensation if you come aboard here at Microsoft?
Do not tell them your salary expectations because you will essentially be guessing what they might pay someone with your skillset and experience to do the job they need done.
While they might have a good idea of the value of that job to Microsoft’s business, you would only be guessing. You will practically always guess wrong and cost yourself money later on. So just don’t guess.
Learn more What to say when asked for your salary expectations during an interview
How to answer the “What’s your current or expected salary?” question
Consider whether the offer is about what you would expect based on your experience and publicly available data. I recommend using levels.fyi or blind to get a sense of where your offer falls for the job you’re considering.
Here’s why this matters: Microsoft is unique because they typically assign multiple “levels” to a particular job title. For example, you may be offered a job as “Senior Software Development Engineer”, but that could be at a Level 63 (common for candidates brought in from outside Microsoft) or a Level 64 (typically reserved for internal promotions).
If the offer you receive seems low relative to what you expected, it may be that they offered a lower level for that job. If that’s the case, you may consider negotiating by first pushing for a higher level, and then pushing for higher pay within that higher level. By moving to a higher level, you may have more room to work at the upper-end of the pay range.
This is a Microsoft-specific variation on the lowball technique, which can be very effective for highly-qualified candidates.
Of course the expectations for your performance will be higher as well, and that may mean more scrutiny of your work and higher standards for earning performance bonuses. There are trade-offs when pursuing a higher level, but that’s often the best way to negotiate a higher salary.
Learn more More salary negotiation strategy and tactics...
How to negotiate salary: 9 tips from a pro salary negotiator
I offer full-service 1-on-1 support to help Senior Software Engineers and Engineering Managers negotiate the best offer possible and with more confidence and less stress.
Here is one example of the results I've helped others achieve in their negotiations with Microsoft.
Negotiating job offers at Facebook, Amazon, GitHub and Stripe
I was unsure about negotiation strategy and how aggressive to be. I was also experiencing a lot of angst about which opportunity was right for me — which one was a good values fit, which one I would actually be happiest in, what they would actually be willing to pay me and how much that even mattered.
You have a lot of time to overthink things during the negotiation process. Josh helped keep my nervousness to a minimum and helped me feel confident about the tone that I was setting in my interactions with different companies.
I negotiated increases in the offers with three of the four companies. GitHub was the lowest offer, but they came up quite a lot with a $25k signing bonus, a $15k increase in salary, and a $32k annual increase in equity.
The offers got close enough to each other that I could decide based on other more intangible factors. I think without Josh’s help, I wouldn’t have been able to narrow that gap and be able to even think about the ultimately more important factors of where I actually want to work, what I want to devote my efforts to, what I want the next chapter of my career to be oriented around. I was able to choose the opportunity that was the most compelling for me personally.
Senior Software Engineer
I'm Josh Doody, a professional salary negotiation coach who helps Senior Software Engineers and Engineering Managers negotiate job offers from big tech companies. On average, Software Engineers and Engineering Managers improve their first-year compensation by $47,273 with my help.
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