Salary Negotiation Tips for Remote Workers
You're in the late stages of interviews for a remote job—congratulations! But negotiating a salary is already hard enough. How do you do it as a remote worker who won't be positioned in the same place as the company?
Like all things surrounding remote work, your approach will depend on your circumstances and the company's. What works for a salaried US employee living in Rochester and negotiating a remote role at a company based in LA might not be the right game plan for someone living in Santiago considering a full-time contracted position with a company based in Chicago.
But no matter the particular details of your situation, follow the steps below for the most successful negotiation possible.
Salary Negotiation Tips for Remote Workers
1. Know and confirm your worth based on the company's location.
This is a classic negotiation starting point and it's equally relevant when negotiating salary for remote positions.
For this step, just consider worth from the company's perspective. Use resources like Glassdoor, Salary.com, and PayScale to see what companies headquartered or operating in the same places as the company you're interviewing for are paying their employees in similar roles. If your potential employer is looking for a content marketing specialist, how much would it cost them to hire one locally?
If the company is completely remote, check where some of their direct competitors are located and what they are paying their employees. A company developing Slack apps will need to have salaries in line with other companies developing Slack apps if they're going to find and retain their talent, right?
Once you have your rough numbers, see if you can flesh them out a bit by talking to people in your network who have similar jobs or work in the same industry. If they work at the company you're applying to or one of its competitors, better yet.
"I've talked to four similar-titled people and cross-checked pay databases, and the consensus is that this role is normally valued at 60-70k" is more persuasive than "Glassdoor says I should be paid 62k."
2. Consider your cost of living.
If the company is actively recruiting remote workers, they're doing so for at least one of three reasons: first, they believe that people should be able to work from wherever they're most productive; second, they want access to a global talent pool; third, they're trying to save money.
All of those reasons are perfectly valid. You'll have an easier time negotiating with companies driven by one or both of the first two, though, so we'll start with those, and address approaches for budget-strapped companies in steps three and four.
Companies want to be able to compete for your employment in the market you're living in. Yes, the quality of work you provide will be the same whether you're in Hong Kong or Houston, but those cities' markets may not pay you the same, so it's reasonable for companies to benchmark offers around what the local market would compensate for that role.
Ideally, the company you're interviewing with is transparent about their calculations. Best-case scenario, they take an approach like Buffer, a company that makes social media management tools and has a transparent, sensible approach to remote-work compensation. Buffer publishes not just their entire team's salaries, but also the formula they use to arrive at them, and it goes like this:
They start with a benchmark for the talent pool they want to attract (for Buffer, it's 50% of the salary you'd get living in San Francisco).
Then they multiple by it by a cost of living percentage that comes in three sizes: low (75% of SF cost of living), average (80%), and high (100%).
Finally, they multiple that number by the complexity of the role (management, individual contributor, etc.) and level of experience.
Ask your future potential employer how they calculate remote salaries. Have what you think would be a fair final result in mind. For example, if you're applying for a tech company based in Toronto, figure out the difference between the cost of living in the Six compared to where you're located using a COL index. If it's 40% less, figure out what 60% of the comparable salaries you found in step one would be, and have that as your base to build your ideal salary offer.
3. Consider your future cost of living.
If you're working in Warsaw and you're always planning to work in Warsaw, this might not be that relevant for you. But if you're an American living abroad, your remote work salary negotiations need to keep your future plans in mind, especially if you're talking to companies who are looking for remote workers who they can pay less than they'd pay employees based in the States.
It's one thing to make a great salary for where you're living now, and it's another thing to find yourself unable to create the life you want in a year or two because you weren't benchmarking your needs correctly.
Ask yourself the following questions to help determine how to average out your cost of living between your current city and potential future cities:
- Do you have debts denominated in US dollars, like college loans or a mortgage?
- Will you need to go home to visit family or friends?
- Do you plan on moving back to (and retiring in) the States eventually?
If so, ask your future employer if you can weigh your cost of living calculation between where you're currently located and where you were and/or will be located.
If the employer is only interested hiring you at a drastically reduced rate because you're working from Nairobi and they're in San Francisco, and they're unwilling to augment your salary to better reflect your financial needs and obligations, they're probably not the employer for you. More on that in step five.
4. Be ready to negotiate beyond salary, too.
Hopefully, by following steps 1-3, you're left looking at a salary you're happy with. If it's not quite there yet, consider asking for other benefits, and then ask yourself if those more than make up for the gap in compensation. You can ask for:
- Home office set-up reimbursements
- Meal reimbursements
- Internet and co-working space reimbursements
- Work-related travel
- Professional development budget (for conferences and trainings)
- Insurance (including health, vision, and life)
- Retirement savings options
- Equity in the company
- Signing bonus
- More PTO
Also consider whether you'll be a full employee (in the U.S. , that means on a W2) or a contract employee. If it's a contract position, ask whether they can switch it to be full-time, since contract workers in the U.S. are responsible for paying self-employment tax (and covering 100% of their health insurance costs), which eats away at earnings.
5. Walk away if need be.
Yes, employers have access to a global market of remote workers, but it goes both ways: as a remote worker, you have access to a global market of employers, too. Don't settle for one who doesn't value you. If you're unable to net your needs with the company's budget, wish them well and keep looking. The right remote job is out there.
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